Medicare Supplement Plans, often called Medigap, are insurance policies that help pay for healthcare costs not covered by Original Medicare. These costs can include copayments, coinsurance, and deductibles. Offered by private companies, these plans vary in price and availability. Understanding how Medigap policies work, what they include, and when to enroll is essential for those navigating healthcare in retirement or approaching Medicare eligibility.
What Is a Medicare Supplement Plan?
A Medicare Supplement Plan is designed to “fill the gaps” left by Medicare Part A and Part B. While Medicare covers a significant portion of healthcare services, it doesn’t cover everything. That’s where Medigap can help. It acts as secondary insurance, paying some or all of the remaining costs after Medicare pays its share. These plans are standardized and regulated at the federal level.
Key Differences Between Medigap and Medicare Advantage
One common source of confusion is the difference between Medigap and Medicare Advantage. Medigap works with Original Medicare, supplementing what Parts A and B don’t pay. Medicare Advantage (Part C), on the other hand, is a private alternative to Original Medicare. Individuals cannot have both at the same time. Choosing between them often depends on personal needs, travel habits, and budget.
Standardized Plan Options and Benefits
Medigap plans are labeled with letters from A to N. Each lettered plan offers a different combination of benefits, but the structure of each is consistent across insurers. For example, Plan G is among the most comprehensive, covering nearly all out-of-pocket costs except the Part B deductible. Some plans may offer coverage for foreign travel emergencies, but none cover prescription drugs.
Cost Structure and Pricing Models
While benefits are standardized, the premiums for Medigap plans can differ depending on factors like age, gender, zip code, and the insurer’s pricing method. Some companies use community-rated pricing, while others use age-related models that increase over time. It’s also worth noting that plan prices may rise due to inflation or changing medical costs, even if coverage stays the same.
Enrollment Periods and Eligibility Rules
The best time to enroll in a Medicare Supplement Plan is during the six-month Medigap Open Enrollment Period, which begins when a person is 65 or older and enrolled in Medicare Part B. During this window, insurance companies cannot deny coverage or charge more due to health conditions. Outside this period, underwriting may apply, and approval is not guaranteed.
Things to Consider Before Choosing a Plan
Before selecting a Medigap plan, it’s important to evaluate current and future healthcare needs. Factors such as travel frequency, provider network preferences, budget, and anticipated medical expenses all play a role. Additionally, Medigap only covers one individual, so couples must purchase separate policies. Reviewing all plan types and comparing insurers can help individuals make more informed decisions.