What Is Medigap?: A Complete Guide

US citizens spend more on healthcare every year than any other nation in the world, a figure amounting to over 16% of GDP every year. 

So it’s easy to see that medical services are among the top priorities for Americans. They’re and also among the biggest expenditures for people every year.

Thankfully, the government places considerable emphasis on ensuring that world-class medical facilities and services are available to all its citizens. 

We all know that we can reap the benefits of Medicare after our 65th birthdays, but what is Medigap insurance and why do you need it? 

What Is Medigap?

While Medicare offers affordable health services to many Americans over 65 who might otherwise find themselves left high and dry by the high costs of medical care, it’s not a one-size-fits-all solution for everyone.

If you have needs that extend beyond the realm of Medicare, Medigap can help fill in the ‘gaps’ in your Medicare health insurance. 

This type of policy, also referred to as Medicare supplemental insurance, is a type of health insurance sold by various private insurance companies. Despite this, Medigap isn’t a part of Medicare Advantage, like other private health insurance options.

As soon as you turn 65, you have a six month open enrolment period to sign up for Medigap policies. During this time, you have a guaranteed right to buy a Medigap policy, regardless of your current health status.

You can’t buy a Medigap policy on its own, it only works in conjunction with Medicare. 

What Is the Purpose of Medigap?

Medicare covers a wide range of essential medical services. Yet, it doesn’t account for every eventuality. These are the main things included in Medicare health insurance:

  • Medicare Part A pays for inpatient hospital stays, some home health care services, and care in a nursing facility.
  • Medicare Part B covers a range of doctor’s services, preventive health care, some medical supplies, and outpatient care subject to conditions
  • Medicare Part D is optional and includes the cost of vaccines and prescription drugs some less common vaccinations

Part A and Part B Medicare policies fall under Original Medicare. 

Some of these services are subject to copayments, deductibles, and coinsurance. Medicare can help you pay for these extra things. 

It works as follows:

Medicare pays its portion of your expenses according to what’s covered under original medicare. Then Medigap steps in to pay a share of the difference according to the type of policy you’ve chosen.

In this way, Medigap’s a way to guard against unexpected out-of-pocket expenses for healthcare.  

There are a variety of policies available to suit your needs and budget.

What Is a Medigap Policy?

While private insurers sell Medigap policies, the different types of Medigap policies follow a standard format when it comes to what they can and can’t offer.

You can’t buy a Medigap policy unless you’ve already signed up for Medicare A and B. There are 10 different kinds of gap coverage offered under the umbrella of Medigap. These are Medigap A, B, C, D, F, G, K, L, M, and N and they don’t all work according to the same basic principles.

These plans can vary from state to state. For instance, plans F and G are high-deductible plans in some states, while plans K and L will pay 100% of services once you’ve reached your deductible for the year. 

Plan N pays 100% of your Part B coinsurance except for emergency room visits that don’t lead to admission, and doctor’s room visits.

It’s important to note that Plans C and F are no longer available to new Medicare members.

What’s Included in Medigap Policies?

Although there are numerous Medigap policies to choose from, all of them are federally-regulated. Unlike original Medicare, these Medigap policies offer a lot of flexibility when it comes to choosing the best one for you.

These are the most important things covered by Medigap policies:

  • All the plans cover Part A coinsurance and hospital costs for a year after you’ve used up your Medicare benefits
  • All plans except plans K, L, and N cover 100% of your Part B coinsurance and copayments
  • All plans excluding K and L pay Part B copayments and coinsurance costs, blood transfusions, and Part A hospice care coinsurance
  • Only plans C, D, F, G, M, and N cover coinsurance for skilled nursing facilities
  • Plans B, C, D, F, G, M, and N pay your Part A deductible and only Plans C and F cover part B deductibles
  • Plans F & G pay for Part B excess charges

None of the Medigap plans cover 100% of foreign travel medical expenses although some may cover a percentage of the payment for some services. 

If you live in Wisconsin, Massachusetts, or Minnesota the plans on offer could differ slightly from the standard offering.  

What’s Excluded From Medigap Cover?

You won’t find a Medigap policy that covers prescription drugs, dental care, non-medical caregivers, vision care, eyeglasses, private nurses fees, or long-term care.

Some insurers may limit your treatment options for pre-existing conditions for the first six months of your coverage.

Comparing Medigap Policies

You can buy a Medigap policy from any insurance company that’s licensed to sell one in your state, yet you can’t expect to walk into any private insurer’s office and choose the exact Medigap plan you want.

Although the government regulates what’s offered by the plans, insurers aren’t compelled to offer every available plan. They are bound to offer Medigap plans A, C, and F if they offer any Medigap plans at all.

So, if you want to go with your preferred insurance provided, you might need to compare what’s on offer. It’s important to consider your specific circumstances when choosing a plan. Be sure to include any anticipated future care you might want or need.

The easiest way to compare plans is to view them side by side. For instance, MedicareWire reviews all Medigap plans here

Although they might sometimes offer similar savings, the following are not Medigap plans:

  • Employer or union healthcare plans
  • Medicare prescription drug plans
  • Federal Employees Health Benefits Program
  • Medicare Advantage plans
  • Long-term care insurance
  • Veterans benefits

It’s illegal to buy a Medigap plan if you already have a Medicare Advantage plan. 

It’s important to consider your options carefully before choosing a Medigap plan as it’s difficult to change your mind later on.

Making Changes to Your Medigap Insurance

It’s important to remember that if you drop your Medigap policy, you might not be able to get it back. You can switch from your original Medigap plan, but you’re not guaranteed acceptance unless you meet the following criteria:

  • If you’re eligible due to guaranteed issue rights or a specific circumstance
  • You want to switch within the first six months of your Medigap enrollment period

Guaranteed issue rights include the right to switch policies if your original insurance plan’s discontinued. 

Medicare Advantage vs Medigap

Although they don’t fall under the same banner, Medicare Advantage supplemental insurance plans also offer some of the elements covered by Medigap.

These are some of the things to know about Medigap before you sign up:

  • You must have original Medicare to take out a Medigap insurance
  • You’ll need to pay an additional monthly premium for your policy, on top of your Medicare premiums
  • Medigap policies cover only one person, your spouse will need a seperate policy

If none of these conditions suit you, you might be better off considering a Medicare Advantage version of this type of supplemental health insurance.

Some Medicare Advantage plans have an out-of-pocket maximum that can help you save on additional costs without having to take out a Medigap policy. 

Other things to consider include:

  • The total cost of deductibles, premiums, and other expenses
  • You co-payments towards doctor visits and hospital stays
  • Limits that affect any medical expenses

Work with your insurance provider to calculate the costs of several scenarios before choosing a plan that suits you best.

If you travel regularly, it’s a good idea to choose a Medicare Advantage plan that covers medical costs in foreign countries too. 

Optimize Your Health and Wellbeing

While health insurance is a necessity for people nowadays, you can save yourself a lot of money by staying healthy in the first place.

Whether you’re wondering, ‘What is Medigap?’ or intent on discovering the best diet to give you an energy boost, we can help. 

Our website centers on a wide range of health-related topics for people of all ages. 

Kenneth Bennett Atticus

Atticus Bennett: Atticus, a sports nutritionist, provides dietary advice for athletes, tips for muscle recovery, and nutrition plans to support peak performance.