Article Topics:

5 Things to Know About Medigap Insurance Policies

Man standing on platform

As Medicare tweaks coverage policies for 2019, one of those policies − Medigap − is drawing the attention of both health care consumers looking for so-called gap insurance, and of cash-strapped states with serious reservations about approving health insurance coverages, which could impact how Medigap coverage is issued. 

Here’s the deal on Medigap policies, with five key issues of focus to guide consumers on ‘Gap’ coverage decisions. 

1. How does Medigap insurance work?

In a word, Medigap insurance, also known as Medicare supplemental insurance, covers costs not paid by Medicare. Usually you buy Medigap insurance from a private health care insurer.

“Medigap or Medicare Supplements, are a way for people who are willing to pay a premium, to spread the risk of their health care coverage to a health insurance provider,” says Wise A. Skillman, the Benefits Guy at C.B.H. & Associates, in Jacksonville, Fla.

CHECK OUT: Chart Outlines Medigap Insurance

The goal is to help Medicare users close the cost gaps that often come with pricier health care services. “Coverage costs for things like co-pays and deductibles can become sizable with serious illness, so Medigap helps protects against those big gap costs,” says Ted Chan, founder of Care Dash, a health care patient review site based in Boston, Mass.

What Medigap doesn’t do is cover the costs of ancillary medical benefits such as vision or dental care.

2. How many Medigap plans are offered?

According to Skillman, there are 10 different Medigap plans available to consumers.

“The different plans go by letters, such as Plan “F” or Plan “G” and so on,” he says. “Plan F is the most comprehensive - it covers everything. Plan G covers everything except for the Part B deductible, while Plan N, covers everything but the Part B deductible and Part B excess charges.” Skillman advises talking to a trusted health insurance professional to choose the best Medigap policy for your unique needs.

State-by-state Medigap plans are largely built off the same blueprint – but not in all states.

“The “lettered” Medigap plans are basically the same in every state except Massachusetts, Minnesota, or Wisconsin which have their own versions/variations of the plans,” Chan adds.

3. How much do Medigap policies cost?

According to Medicare.gov, Medigap policy costs are wide-ranging, and are dependent on the provider that offers the insurance.

“The cost of Medigap policies can vary widely,” Medicare states on its website. There can be big differences in premiums that insurance companies charge for exactly the same coverage.”

When you’re out kicking tires on a Medigap policy, focus on comparing the same Medigap policy offered by various insurers. “For example, compare a Plan A from one company with Plan A from another company,” Medicare advises.

For baseline figures on overall Medigap costs, the range may be wider than you might think, depending on the state you live in the policy you choose. “I would expect to pay between $200 and $600 a month, but it varies by insurer and state,” says Chan.

4. What does the law say about Medigap insurance?

In every U.S. state, Medicare consumers have the right to buy a Medigap policy for six months starting the first day of the month you’re at least 65 and enrolled in Part B. “During this grace period, the insurance company is not allowed to turn you down or charge you more because you have a pre-existing condition,” Chan explains. “This is called "guaranteed issue." 

There are several other situations where guaranteed issue is applicable. “One is if you are on Medicaid Advantage and move, or if the Medicare Advantage plan stops offering services,” Chan adds.

5. What are the primary benefits of Medigap insurance?

Since Medigap insurance covers medical expenses that Medicare doesn’t cover, such as co-pays and deductibles, as well as foreign travel emergencies, the biggest benefit is the coverage, itself. “These are “gaps” in Medicare coverage,” says Chan. “If you get sick and need significant treatment or get hospitalized, these costs can escalate quickly. 

“Long-term facilities such as nursing homes or hospice can generate very large costs,” and Medigap can help cover them,” he says. 

The takeaway is that Health care experts seem to be unanimous in encouraging consumers to do their due diligence and start comparing plan options right away.

“Personally, we suggest people take a close look at Medigap whenever possible,” says Chan. “Medigap is renewable even if you get sick, so it can help protect you financially against chronic illness or a long-term health issue such as cancer. Thus, it's best to think about getting it earlier and keeping it through your less healthy years.”

Since Medigap plans are standard (the only big difference is cost), it’s best to shop around, with a focus on reliable providers who you are confident will cleanly service your plan. 

“Companies like Aetna, Cigna, and BlueCross are reputable insurers and there is little reason to go with an unknown vendor,” Chan advises.

Get Free Health Insurance Quotes

Get Free Health Insurance Quotes

Submit Your Question!