Medigap Insurance

Key Takeaways

• Medigap helps to cover costs not paid by Original Medicare, like copayments and deductibles.
• You must be 65 or older and enrolled in Parts A and B to buy Medigap.
• Medigap plans differ by state, but all are standardized by federal guidelines.
• Plans G and N are the most popular Medigap options among eligible beneficiaries.
• Medigap policies are not renewable if dropped, and premium prices can increase.

What Is Medigap Insurance?

Approximately 20% of Medicare recipients have Medigap insurance, which is health insurance from a private insurance company that helps to pay for costs not covered by Original Medicare. Standardized Medigap plans are approved by the federal government so they should be the same regardless of provider. Medigap plans don't cover the costs of prescription drugs; for that, you need a Medicare Prescription Drug Plan (Part D).

If you decide to buy Medigap insurance, you'll pay monthly Medigap premiums to a private insurance company licensed to sell policies in your state. You can buy Medigap during an open enrollment period after you turn 65.

Understanding How Medigap Insurance Functions

Original Medicare—defined as Parts A and B—doesn't cover all expenses associated with an illness. Medigap policies are designed to help cover all or a portion of those extra charges, depending on the type of coverage.

Around 20% of Medicare beneficiaries get Medigap, according to research from the Kaiser Family Foundation (KFF).

Although private insurance companies offer Medigap coverage, the federal government requires companies to offer standardized policies. These plans are identified by letters, such as Plans A or N.

However, plans can vary by state. For example, different standardized plans may be offered if you reside in Massachusetts, Minnesota, or Wisconsin.

You pay monthly Medigap premiums to a private insurance company licensed to sell policies in your state. You pay this premium in addition to the monthly premium for Medicare Part B. Monthly premiums can change yearly and rise with age.

Important

Shopping for Medigap coverage is straightforward because you merely compare prices and the suitability of the insurance company.

Exploring the Different Types of Medigap Coverage

Those eligible for Medigap in 2024 can access these choices: plans A, B, D, G, G-High Deductible, K, L, M, and N. However, not all plans are offered in every state. Even if a plan is available in your state, not all insurance companies sell policies for that plan.

But if different companies sell the same policy, price is the only difference between policies.

Here's how the 2024 Medigap plans compare.

According to the Congressional Research Service, the most popular plans among those listed here are Plans G and N. The least popular is Plan M.

People eligible for Medigap before Jan. 1, 2020, who did not enroll in a Medigap plan may still be able to buy C, F, and F-High Deductible. These plans pay the Part B deductible. Those who are already enrolled in plans C, F, and F-High Deductible can keep them. However, these plans are no longer available for those eligible after January 2020.

Eligibility and Requirements for Obtaining Medigap

You must be 65 or older to buy Medigap insurance. You must also be enrolled in Part A and Part B and not in a Medicare Advantage plan.

Federally guaranteed issue rights don't extend to those under age 65 who qualify due to disability. However, some states extend these rights beyond 65. Companies may also choose to sell Medigap policies to Medicare recipients under age 65.

The time to buy a Medigap policy is during your 6-month Medigap Open Enrollment Period, according to Medicare. During this period, you have more choices, and private insurers can't use medical underwriting to deny you a policy or charge you more for your Medigap plan.

After this period, you may find buying a policy more expensive or impossible due to any history of health issues.

Once you have a Medigap policy, it is guaranteed renewable, even if you have health problems. In other words, the insurance company cannot cancel the policy so long as the premiums are paid.

Warning

If you drop your Medigap policy, you might not be able to get it again, or get another Medigap policy later.

The Historical Development of Medigap Insurance

Important years in Medigap's history include:

1990: Federal standards are implemented for Medigap, including standardized plans and guaranteed plan renewal.

2003: Medigap plans are barred from offering drug coverage to new beneficiaries.

2008: Insurers are required to offer standardized plans, such as Plan A.

2015: Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) prohibits the sale of first-dollar coverage Medigap plans to newly eligible Medicare beneficiaries, which includes plans C and F.

Is There Anything Medigap Doesn't Cover?

Medigap policies vary, but tend to lack coverage for dental, vision, hearing aids and eyeglasses, long-term care, and private-duty nursing.

Can I Have Medigap and Medicare Advantage (Part C)?

No, having both Medigap and Medicare Advantage (Part C) is not legal. If you want to switch from one plan to the other, that is possible within the first 12 months of coverage.

Who Can I Talk to About Medigap Questions?

If you have additional questions, there are a few options. You can check out this link for a live chat feature or call customer service at 1-800-MEDICARE (1-800-633-4227).