What is Medigap?
Medigap is Medicare Supplement Insurance that helps fill “gaps” in Original Medicare and is sold by private companies. Medigap plans pay all or part of the remaining costs after Original Medicare pays first, including:
- Deductibles (for example, Part A hospital visit deductible)
- Copayments (for example, $10 or $20 for a doctor’s visit or prescription drug)
- Coinsurance (usually 20% of the approved Medicare cost)
- Some plans cover care received while traveling abroad
Just to Be Clear
- Medicare Supplement insurance and Medigap plans are the same thing!
- Medicare has Parts; Medigap has Plans. And both use letters to name their parts and plans!
- Medigap is optional insurance that you pay for in addition to your Medicare premiums.
What Does Medigap Cover?
All Medigap plans cover the same standardized benefits determined by federal and state laws. There are 10 Medigap plans: Plans A, B, C, D, F, G, K, L, M and N. Different plans cover different Medicare benefits. See what benefits are covered and compare across all 10 Medigap plans.
Once you decided on one or two Medigap plans after reviewing the Medigap Plan Comparison Chart above, you will want to look at the insurance companies who offer the plans and determine their premiums.
Plans with the same letter name offer the same benefits, but premiums can vary from company to company.
Same Benefits, Different Prices?
You may ask if standardized Medigap plans are alike, then:
- Why do the premiums differ between companies?
- Why should anyone sign up with any company but the cheapest one?
Age-based Plan Premiums or How to Determine Your Best Value
When comparing plan premiums, you will see an immediate difference based your age. In Maryland, insurance companies can use age to set costs based on these categories.
- Attained-age-rated: Premiums are initially based on your age when you buy a policy, and they increase as you get older (meaning you pay a different price at age 65 than you do at age 70). These premiums may be the lowest when you first buy them, but they are generally the most expensive over your lifetime.
- Issue-age-rated: Premiums are based on the age you were when you first bought the policy. The younger you are when you buy a Medigap, the cheaper your premium. (Note: Premiums will still increase over time due to inflation, but not due to age).
- Community-rated: Premiums are the same for everyone living in a specific area, regardless of age. These are generally the least expensive over your lifetime.
Factors Used to Determine Costs
There are several factors used by insurance companies to determine Medigap plan premiums including:
- Your age
- Where you live
- Your health status
- Your gender
- If you smoke
- If you are married
- How much the plan is used by the number of current plan insureds (utilization)
3 Ways to Find Medigap Plans in Maryland
- Go to Medicare.gov website and use their tool, Find a Medigap Policy that Works for You.
- Review the Medicare Supplement Rate Guide published by the Maryland Insurance Administration every January and July.
- Contact Montgomery County SHIP and have a counselor do a free plan comparison for you.
Medigap Enrollment Period
You have a six-month Guaranteed Issue Rights that begins the month you are 65 or older and enrolled in Medicare Part B.
During your Guaranteed Issue Rights, Medigap companies must sell you a policy at the best available rate regardless of your health status, and they cannot deny you coverage.
If you miss your Medigap Enrollment, you could experience increases in premiums, exclusions or waiting periods for pre-existing health conditions.
7 Things to Know About Medigap
- Medigap only works with Original Medicare. A Medigap plan works with Original Medicare to help lower your share of costs for approved Part A and Part B services. Medicare pays its share, then your Medigap plan helps pay your share.
- A Medigap plan is different from a Medicare Advantage Plan (Part C). Medicare Advantage plans bundle your Parts A, B, and D into one plan. Most Medicare Advantage plans also offer extra benefits that Medicare doesn’t cover, like vision, hearing, dental, and more.
- You cannot buy a Medigap policy if you have a Medicare Advantage Plan, unless you switch back to Original Medicare
- Extra benefits aren’t included in Medigap plans. Medigap plans don’t typically offer extra benefits like dental, vision, hearing, or even prescription drugs. If you want drug coverage, you can buy a separate Part D Drug Plan.
- You need both Medicare Part A and Part B to buy and keep a Medigap policy. You’ll keep your policy, even if you have health problems, as long as you pay your Medigap policy and Part B premiums.
- The best time to get a policy is during your Medigap Enrollment Period. It’s the 6-month period that starts the month you turn 65 and you first have both Medicare Part A and Part B. During this time, you can buy any Medigap policy sold in your state, even if you have health problems.
- If you’re under 65, you may not be able to buy a Medigap policy, or you may have to pay more.
- After your Medigap Enrollment Period ends, you may not be able to buy a policy. If you’re able to buy one or want to switch policies later, it may cost more.
- You may have Medigap protections, called guaranteed issue rights, in certain situations when insurance companies must offer you certain Medigap policies.
- Medigap insurance is accepted by any doctor, hospital or health care provider who accepts Medicare.