A Medigap policy (also called Medicare Supplement Insurance) is health insurance sold by private insurance companies to fill gaps in the Original Medicare Plan coverage (OMP). It helps pay some of the health care costs that the OMP doesn't cover, such as coinsurance and deductibles. Medigap policies may also cover certain things that Medicare doesn't cover. If you already have a Medicare Advantage plan, you do not need a Medigap policy because your needs should be met by your plan.
Basics of Medicare
Medicare is health insurance for people age 65 or older, under age 65 with certain disabilities, and any age with end-stage kidney disease. Medicare covers many health care services and supplies, but many costs aren't covered. If you're in the OMP and you buy a Medigap policy, both plans pay their share of the Medicare-approved amount for covered health care costs.
Medicare has the following plans:
- Part A Hospital Insurance - helps cover inpatient care in hospitals, skilled nursing facilities, hospice care and some home health care if you meet certain conditions
- Part B Medical Insurance - helps cover medically-necessary services like doctors' services and outpatient care, other medical services that Part A doesn't cover (like physical and occupational therapists) and some home health and preventive services
- Part C Medicare Advantage Plans - private insurers like HMOs and PPOs provide Part A, Part B and, sometimes, Part D coverage to people who enroll
- Part D prescription drug coverage - helps cover prescription drug costs
If you have the OMP, you may want to buy a Medigap policy to help cover out-of-pocket costs. Generally, you must have Medicare Part A and Part B to buy a Medigap policy.
Standardized Medigap Policy
Insurance companies can sell you only a "standardized" Medigap policy. Standardized Medigap policies are identified by letters (Medigap Plans A through L). Each type of Medigap policy offers the same basic benefits, no matter which insurance company sells it. Usually the only difference between Medigap policies sold by different insurance companies is the cost. Medigap policies must follow federal and state laws.
The front of a Medigap policy must clearly identify it as "Medicare Supplement Insurance." These Medigap policies must all have specific benefits so you can compare them easily.
What Is Not Covered
A Medigap policy only covers one person. If you and your spouse both want Medigap coverage, you each must buy separate Medigap policies. Medigap policies don't cover:
- Long-term care (like care in a nursing home)
- Vision or dental care
- Hearing aids
- Private-duty nursing
Most Medicare Supplement or Medigap policies require, as does Medicare, that the covered services be medically necessary, and they pay only up to amounts approved by Medicare.
Any new Medigap policy is guaranteed renewable. This means the insurance company can't cancel your Medigap policy as long as you pay the premium. Although some Medigap policies sold in the past covered prescription drugs, no new Medigap policies are allowed to include prescription drug coverage.
If you want prescription drug coverage, you may want to join a Medicare Prescription Drug Plan (Part D) offered by private companies approved by Medicare.
The best time to buy a Medigap policy is during your Medigap open enrollment period. This period lasts for 6 months and begins on the first day of the month in which you are both age 65 or older and enrolled in Medicare Part B. While the insurance company can't make you wait for your coverage to start, it may be able to make you wait for coverage of a pre-existing condition. A pre-existing condition is a health problem you have before the date a new insurance policy starts.
Questions for Your Attorney
If you are having problems with your Medigap policy, you may want to contact an experienced elder law attorney for advice.
You may want to ask your attorney the following questions:
- How much experience do you have with elder law and Medicare or Medigap cases?
- Do you have references that I can contact, preferably Medigap case clients?