Medicare is the government’s health insurance program for adults age 65 and over, and for those with certain serious chronic medical conditions or disabilities. It offers fairly comprehensive coverage for doctor’s visits, hospital stays, and medications, but it doesn’t cover everything.
You’re still responsible for many out-of-pocket costs, including deductibles, copayments, and coinsurance. That’s where Medicare supplement insurance comes in.
Medicare supplement insurance is an add-on to Medicare parts A and B. It’s also called Medigap insurance, because it fills in for Medicare cost gaps. When you buy Medigap insurance, it’ll cover many of the out-of-pocket costs Medicare won’t pay for, along with a few extras.
No. Medigap isn’t the same as a Medicare Advantage Plan (Part C). Medicare Advantage plans are an alternative to Medicare Parts A and B coverage. Medigap is an add-on to parts A and B.
Medigap comes in an alphabet of plans from A through N. Each policy offers a specific set of benefits. Insurance companies don’t have to carry every single kind of Medigap plan, but they all must at least carry Plan A.
Medicare supplement insurance pays for costs you’d normally be responsible for under Medicare, including:
- Deductibles: the amount you must pay before Medicare coverage kicks in
- Coinsurance: your share of the cost for a medical service
- Copayments: a set percentage of the costs for drugs and some health services
Medigap may also pay for some services Medicare doesn’t cover, including the costs of medical care when you travel outside of the United States.
Any new Medigap policy you buy won’t cover prescription drugs. You’ll need to sign up for Medicare Part D to get prescription coverage.
Your plan also won’t cover:
- dental care
- hearing aids
- long-term care
- private nursing
- routine vision care
You buy Medicare supplement insurance coverage through a private insurance company. Then you’ll pay that company a monthly premium on top of the premium you already pay Medicare.
Each individual must have their own Medicare supplement insurance policy. So, if you’re married, you and your spouse will have to buy separate policies.
When you see your doctor or stay in the hospital, your Medicare part A or B coverage will kick in first. Then, your supplement insurance will cover any leftover costs.
No. You can’t have both Medicare supplement insurance and a Medicare Advantage Plan. Medicare supplement insurance can’t be used to pay for deductibles, copayments, and other fees from a Medicare Advantage Plan.
If you want Medicare Advantage, you’ll need to switch back to a regular Medicare Part A and B plan and end enrollment in any Medicare supplement insurance.
There’s a possibility the private insurance company you choose can deny your request for Medicare supplement insurance if you sign up outside of the open enrollment period. However, once you have a plan, the insurance company has to renew it no matter what health problems you develop.
Insurance companies can’t sell you a Medigap policy if you:
- don’t already have Medicare parts A and B
- have a Medicare Advantage Plan, unless you’re planning to leave that plan
- have Medicaid
Your best option is to sign up during a Medigap open enrollment period. This 6-month period starts the first month you’re covered under Medicare Part B. During this time, you’ll get the best prices and the most coverage options. You may encounter a waiting period for coverage of preexisting conditions.
You can buy Medicare supplement insurance from any licensed private insurance company in your state. To find a policy in your area, check Medicare’s Policy Search.
Costs and coverage can vary quite a bit from plan to plan. Read each policy carefully and compare different plans until you find one that best fits your medical needs and budget.