If you’ve recently signed up for Medicare, you may be wondering what a Medigap policy is. A Medigap policy will help cover some costs associated with your Medicare plan.
There are multiple types of Medigap policies to choose from, so it’s important to do your research and find a plan that fits your personal medical needs.
In this article, we’ll explore more about what Medigap is, how much you’ll pay for Medigap, and when to enroll in a supplemental Medigap policy.
Medigap is supplemental Medicare insurance sold by private companies to help cover original Medicare costs, such as deductibles, copayments, and coinsurance.
In some cases, Medigap will also cover emergency medical fees when you’re traveling outside the United States. A Medigap policy only pays out after both you and Medicare have paid your share of costs for medical services.
There are 10 Medigap plans available: A, B, C, D, F, G, K, L, M, and N.
There are also Medigap plans no longer for sale: plans E, H, I, and J. However, they still offer their original coverage to those who previously purchased them.
Most of these Medigap plans differ in what types of copayment, coinsurance, or other medical fees they will cover.
All Medigap plans cover at least some portion, if not all, of:
- Medicare Part A coinsurance and hospital fees
- Medicare Part A hospice coinsurance or copayment costs
- Medicare Part B coinsurance or copayment costs
- blood transfusion costs, up to the first 3 pints
In addition, some Medigap plans also cover:
- skilled nursing facility costs
- Medicare Part A deductible
- Medicare Part B deductible
- excess Medicare charges
- emergency medical costs during foreign travel
Below, you will find a list of the Medigap policies being offered in 2020, as well as their coverage.
|Part A deductible||No||Yes||Yes||Yes||Yes||Yes||50%||75%||50%||Yes|
|Part A co-insurance and hospital costs||Yes||Yes||Yes||Yes||Yes||Yes||Yes||Yes||Yes||Yes|
|Part A hospice co-insurance or copayments||Yes||Yes||Yes||Yes||Yes||Yes||50%||75%||Yes||Yes|
|Part B deductible||No||No||Yes||No||Yes||No||No||No||No||No|
|Part B co-insurance or co-payment||Yes||Yes||Yes||Yes||Yes||Yes||50%||75%||Yes||Yes|
|Part B excess charges||No||No||No||No||Yes||Yes||No||No||No||No|
|Blood transfusion (up to 3 pints)||Yes||Yes||Yes||Yes||Yes||Yes||50%||75%||Yes||Yes|
|Skilled nursing facility co-insurance||No||No||Yes||Yes||Yes||Yes||50%||75%||Yes||Yes|
|Foreign travel costs||No||No||80%||80%||80%||80%||No||No||80%||80%|
Please note that Medigap is not the same as Medicare Advantage. Medicare Advantage plans offer coverage in addition to what original Medicare offers. Medigap plans only help pay for whatever coverage you already have.
There are some costs associated with both original Medicare and Medigap, which may vary from plan to plan.
Even with a Medigap plan, you’re still responsible for paying your original Medicare premiums, which include:
- $252-458 for Part A, unless you have a premium-free plan
- $144.60+ for Part B, depending on your income
In addition, you may owe a separate premium for your Medigap plan.
Before Medicare or Medigap will pay for your services, you must meet your deductible amounts for parts A and B, which include:
- $1,408 for Part A each benefits period
- $198 for Part B
Some Medigap plans may pay for a portion (or all) of these deductible amounts.
Copayments and coinsurance
After your deductible has been met, Medicare pays out for its portion of the costs. However, you will still owe some copays or coinsurance fees, including:
- $0-704 coinsurance per day for Part A, depending on how many days it is in the benefits period
- 20 percent of the Medicare-approved amount for services for Part B
Depending on the Medigap policy you choose, the copayment and coinsurance amounts listed above will be paid out by Medigap.
Only two Medigap policies, K and L, have limits on how much you’ll pay out-of-pocket.
However, neither Medicare Part A nor Part B have out-of-pocket limits. If you choose a Medigap policy that doesn’t cover at least most, or all, of your Medicare fees, you’ll still have to pay out-of-pocket for these costs.
Medigap policies are supplemental insurance for original Medicare, not additional coverage. While a Medigap policy can help cover some of your Medicare costs, it will not cover:
- prescription drugs
- vision, dental, or hearing
- any other health perks, such as fitness memberships or transportation
Medigap policies are “rated” according to a variety of factors, all of which can influence how much you pay for your plan premium.
Community-rated (no age-rated)
Community-rated Medigap policies charge the same monthly premium regardless of your age. The monthly premium may change because of outside factors such as inflation, but it will never change based on your age.
Issue-age-rated (entry age-rated)
Issue-age-rated Medigap policies charge different premium amounts depending on your age when you purchased the policy. Generally, premiums are less expensive if you purchase a Medigap policy when you’re older.
Attained-age-rated Medigap policies charge higher premiums as you age, and your monthly premium amount is determined based on your age. Unlike issue-age-rated policies, these types become more expensive as you get older.
In other states, if you have a preexisting health condition, you may be charged a higher premium for your Medigap policy.
In addition, although plans E, H, I, and J are no longer sold, they also cover travel-related health care expenses if you’re already enrolled in them.
Before a Medigap policy will pay out for foreign travel emergency costs, you will first need to pay a $250 deductible out-of-pocket. Your Medigap policy will then pay 80 percent of your emergency medical costs, up to a lifetime limit of $50,000.
It’s important to note that a Medigap policy will only pay for these types of fees if the policy begins during the first 60 days of your trip.
There are multiple enrollment periods for Medicare plans, but there are only specific enrollment periods for adding a Medigap policy to your plan. Pay close attention to the following enrollment dates:
- Initial enrollment period. You are eligible to apply for a Medicare plan, and thus add a Medigap policy, during the 3 months before, 3 months after, and month of your 65th birthday.
- Open enrollment period. If you miss initial enrollment, you can apply for a policy during the Medigap open enrollment period. If you’ve already turned 65, this period begins when you enroll in Part B. If you’re turning 65, this period runs until 6 months after you turn 65 and have enrolled in Part B.
Insurance companies aren’t always required to sell you a Medigap policy, especially if you’re under 65.
Once both the initial enrollment period and open enrollment period has passed, you may have a much harder time finding an insurance company that will enroll you. As soon as you enroll in Medicare Part B, you should apply for a Medigap policy if you need one.
Also, keep in mind it’s illegal for someone to sell you a Medigap policy if you have a Medicare Advantage plan.
Tips for helping a loved one choose a Medigap plan
If you’re helping a loved one choose a Medigap policy, here are some things to consider:
- How much additional financial assistance do they need? A Medigap policy isn’t a free policy, so you’ll want to make sure that the benefits of the plan outweigh the costs.
- Do you anticipate needing skilled nursing facility or hospice care? Not all plans offer coverage for these types of services, so make sure to pay close attention to policy benefits.
- Does your loved one travel out of the country often? If so, they may want to find a plan that offers foreign travel emergency healthcare coverage.
- Are there other medical needs that would be better served by a different type of Medicare plan? Consider that there are also plenty of Medicare Advantage plans that may provide more benefits than what a Medigap policy can offer.
There are a lot of options for choosing a Medigap plan but comparing the offerings with what your loved one needs can help you narrow down the best Medigap policy for them.
Medigap policies are a supplemental insurance option for people enrolled in original Medicare that are looking for additional financial coverage.
When you enroll in a Medigap policy, you’ll be covered for certain costs, such as deductibles, copayments, and coinsurance. However, you should still expect to pay some out-of-pocket costs for the services you receive.
To explore Medigap options in your state, visit Medicare.gov to find a policy that works for you.