What is Medigap (Medicare Supplement Insurance)?

When you qualify for Medicare Part A and B, you’ll want to read up on what is Medigap. This important supplement insurance helps keep your medical expenses more predictable and in some cases, more affordable. Learn more about this valuable add-on to your medicare coverage. 

How Does Medigap Work?

Medigap is a health insurance policy that you can purchase from a private health insurance company. It helps pay out-of-pocket expenses after your medical providers bill Medicare. You’re only eligible for this insurance if you have what is known as Original Medicare, which is Medicare Part A (hospital coverage) and Part B (medical coverage). 

This supplemental insurance is standardized, meaning no matter what insurance company you purchase a policy from, you’ll experience the same benefits. However, there are 10 different Medigap plans each with its benefits, pricing tiers and coverage options. Regardless of which insurance company you select, the coverage will be the same for that type. The types are indicated with a letter: A-D, F, G and K-N. When shopping, the only difference you’ll experience is the price. 

Also know that not all Medigap coverage types are available in every state. Some states have an additional Medigap policy type called Medicare SELECT. There are state and federal laws for Medigap policies that help protect policyholders.

Who Is Eligible for Medicare Supplement Plans?

Eligibility requirements for Medicare supplement plans vary by state. To qualify, you must live in a state where such policies are offered, be 65 years of age or older or have a disability or end-stage renal disease.

The best time to enroll is when you first qualify for Medicare Part B. You’ll have six months following Medicare enrollment to enroll, which is known as your Medicare Supplement Open Enrollment Period. That’s because during this time, you might qualify for guaranteed issue plans, which means the insurance company won’t use your medical history to determine eligibility. These rules vary by state so be sure to review the specifics for your area.

Medigap vs. Medicare Advantage Plans (Part C): What’s the Difference?

You cannot purchase Medigap coverage if you are enrolled in a Medicare Advantage Plan, also known as Medicare Part C. At the time of Medicare enrollment, you’ll have the option to purchase a Medigap policy or Medicare Advantage Plan. 

The largest difference between the coverage options is that a Medicare Advantage Plan is an all-in-one policy. Insurance companies offer these policies via a contract with Medicare. It is a bundled policy of Part A, Part B and often Part D (prescription drug coverage).

When enrolling in a Medicare Advantage Plan, you’ll need to enroll in Medicare Part A and Part B and pay the Part B premiums, which are $174.70 per month in 2024. Then you might also need to pay additional monthly premiums for the Medicare Advantage Plan. That cost varies but is fairly affordable.

With a Medicare Advantage Plan, you’ll have all the standard Part A and Part B coverages, though you might have different deductibles and copayments. You’ll also get Part D in most areas, which will help with prescription drugs and in some cases, other care like dental, hearing and vision.

Another key difference with Medicare Advantage Plans is that you’ll have a provider network that differs from the standard Medicare providers. It generally has strict requirements for seeing in-network providers and won’t pay any portion of the bill if you see an out-of-network provider.

These plans have a strict out-of-pocket annual maximum of $8,850 for in-network providers and $13,300 for in-network and out-of-network services combined.

What Do Medigap Plans Cover?

Here’s a look at the expenses Medigap plans can help cover.

• Copayments
• Coinsurance
• Deductibles
• Foreign travel emergency care (only available on some plans)

What Is Not Covered by Medigap Plans?

While you’ll have coverage for many expenses left over after Medicare, you’ll still need to be prepared to pay the following expenses out-of-pocket without medical coverage.

• Vision 
• Dental
• Eyeglasses
• Hearing aids
• Private-duty nursing
• Nursing home
• Prescription drug coverage unless enrolled in a Medicare Part D plan or purchased your Medigap insurance plan before 2005

How Much Does Medicare Supplement Insurance Cost?

Coverage costs will vary based on the plan and insurance provider you select as well as the state in which you live. Insurance companies are free to select premium amounts. Comparing plans from various insurers is the best way to get the most coverage at an affordable rate.

Factors that can impact the cost of Medicare Supplement Insurance include:

• Discounts from the insurance company, such as those for non-smokers, married couples and individuals willing to pay via electronic funds transfer
• Whether you must go through medical underwriting or can get a guaranteed issue policy
• If you can get a Medicare SELECT policy where you live. These plans often have lower premiums
• Options for a high-deductible plan

Roughly, you can expect to pay monthly premiums within the following ranges.

• Plan A: $160-$345
• Plan B: $200-$330
• Plan C: $290-$370
• Plan D: $290-$340
• Plan F: $250-$460
• Plan G: $230-$410
• Plan K: $80-$160
• Plan L: $180-$215
• Plan M: $268
• Plan N: $190-$315

How to Buy Medicare Supplement Insurance

Once you know you want a Medicare Supplement Plan, follow these steps to purchase the best policy for your needs and budget.

1. Select a plan type: Review benefits and coverages from each lettered plan. Make sure that you consider future health needs when selecting your plan because changing plans can be complex and in some cases, you can’t make the change.
2. Review pricing and options from various insurance carriers: Shop as many carriers as you can because prices will vary. Just be sure that you’re comparing the same lettered plans from carrier to carrier or your coverage options won’t match.
3. Compare: Once you have a short list of carriers that have affordable rates for you based on your needs, check your State Insurance Department to see if the carriers have complaints against them. This will help you know whether this is a quality carrier. You can also reach out to your State Health Insurance Assistance Program for assistance choosing a high-quality carrier.
4. Reach out to your carrier of choice for a specialized quote: At this point, you’ll have to complete an application. Review the policy language to ensure it meets your needs.
5. Make payment: Pay your monthly premiums to retain your policy year after year.

When to Enroll in a Medigap Policy?

The best time to enroll in a Medigap policy is during your Medigap Open Enrollment Period. You'll have six months from the date you become eligible for Original Medicare to enroll. This is known as your Medigap Open Enrollment Period. It is the best time to enroll because you’ll be eligible for guaranteed coverage, which means you won’t need to go through a medical review and carriers cannot deny you coverage due to a pre-existing condition or ailment.

During your open enrollment period, you’re also most likely to get better prices and will likely have more options. While you might be able to get coverage after this time, it might cost considerably more or some health insurance providers might decline your application, which they can do legally.

Expand Your Healthcare Coverage with Supplemental Insurance

While Medicare provides good coverage, you can make your medical expenses more predictable and affordable with a Medigap plan. Review your options and ensure you sign up within your open enrollment period to guarantee yourself coverage and secure the best rates.

Frequently Asked Questions