Medicare Part A and B only cover so much of a person’s medical expenses. Sometimes there are additional out-of-pocket costs that can be sizable for someone living on a fixed income.
A Medigap policy is a Medicare supplement insurance. These policies are sold by private companies, and pay for medical expenses not covered by Medicare, which are:
- Deductibles
- Co-payments
- Coinsurance
- Costs for care received outside of the United States
You pay a monthly premium for a Medigap policy in addition to your Medicare premiums. A Medigap policy covers one person; spouses must buy separate policies. You can buy a Medigap policy from any insurance company that’s licensed in your state to sell one.
Medigap plans are labeled by letter – Plans A, B, C, D, F, G, K, L, M and N. The benefits of each plan are standardized by Medicare, but it important to shop around as these plans are all different prices and cover different expenses.
What Does Medigap Cover?
Here is a list of what a Medigap policy may cover:
Medicare Part A:
- Deductibles, coinsurance and/or co-payments for:
- In-patient hospital
- Hospice care
- Skilled nursing facilities
Medicare Part B:
- Deductibles, coinsurance and/or co-payments for:
- Medically necessary treatment (outpatient)
- Preventative services
Medigap usually does not cover these items:
- Prescription drugs
- Long-term care
- Private-duty nursing
- Vision care / eyeglasses
- Dental care
- Hearing aids
Different companies offer different plans, so be sure to review the coverage offered by each company to pick the best option for your needs.
** It is also important to note that if you have Medicare Part C (Medicare Advantage Plan) that Medigap won’t pay out. If you decide to opt-in to Medicare Part C but you already have a Medigap policy, remember to drop Medigap. You cannot have Medicare Part C and Medigap at the same time.
Here is a side-by-side comparison of 2022 Medigap Coverage:
- X = plan covers 100% of benefit
- % = plan covers that percentage of benefit
Medigap Benefits | Medigap Plans | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
A | B | C | D | F* | G* | K | L | M | N | |
Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used up | X | X | X | X | X | X | X | X | X | X |
Part B coinsurance or copayment | X | X | X | X | X | X | 50% | 75% | X | X*** |
Blood (first 3 pints) | X | X | X | X | X | X | 50% | 75% | X | X |
Part A hospice care coinsurance or copayment | X | X | X | X | X | X | 50% | 75% | X | X |
Skilled nursing facility care coinsurance | X | X | X | X | 50% | 75% | X | X | ||
Part A deductible | X | X | X | X | X | 50% | 75% | 50% | X | |
Part B deductible | X | X | ||||||||
Part B | X | X | ||||||||
Foreign travel exchange (up to plan limits) | 80% | 80% | 80% | 80% | 80% | 80% | ||||
Out-of-pocket limit** | N/A | N/A | N/A | N/A | N/A | N/A | $6,620 in 2022 | $3,310 in 2022 | N/A | N/A |
* Plans F and G also offer a high-deductible plan in some states. With this option, you must pay for Medicare-covered costs (coinsurance, copayments, and deductibles) up to the deductible amount of $2,340 in 2020 ($2,370 in 2021) before your policy pays anything. (Plans C and F aren’t available to people who were newly eligible for Medicare on or after January 1, 2020.)
** For Plans K and L, after you meet your out-of-pocket yearly limit and your yearly Part B deductible, the Medigap plan pays 100% of covered services for the rest of the calendar year.
*** Plan N pays 100% of the Part B coinsurance, except for a copayment of up to $20 for some office visits and up to a $50 copayment for emergency room visits that don’t result in inpatient admission.
Medigap policies are standardized in a different way in Massachusetts, Minnesota and Wisconsin.
Starting January 1, 2020, Medigap plans sold to new enrollees of Medicare will NOT be allowed to cover the Part B deductible – Meaning, plans C and F will not be offered to new enrollees as of January 1, 2020. If you had the plan prior to 2020, you will be able to keep you policy. If you were eligible before 2020 but not yet enrolled, you may still be entitled to opening one of those plans.
How Do You Qualify For A Medigap Policy?
- You are age 65 or older
- You have both Part A and Part B (Original) Medicare
- You are not enrolled Medicare Advantage (Part C)
Open enrollment for Medigap is six months from the first day of the month of your 65th birthday. During this time, you can buy any Medigap policy at the same price a person in good health pays. If you try to buy a Medigap policy outside of this enrollment period, there is no guarantee that you’ll be able to get coverage. If you do end up getting covered, your rates could be higher.
Additionally, if you purchase a Medigap plan during Medicare open enrollment, you don’t need a medical screening. If you choose to wait and buy a Medigap plan outside of open enrollment, a medical screening and physician’s statement might be required.
A slight majority of states require insurers to offer at least one kind of Medigap policy to some Medicare recipients who are under age 65. Twenty-five states require that Medigap policies be offered to all Medicare recipients. Medigap policies are not available to end-stage renal disease patients in California, Massachusetts, and Vermont.
Remember: If you ever drop your Medigap policy, you might not be able to get it back.
How Do You Get A Medigap Policy?
You can start your search on Medigap policies available in your area here.
You can contact your State Insurance Department.
You can contact your State Health Insurance Assistance Program.
Kate writes about retirement benefits for retirementinsurance.org. She has a Masters Degree in Social Work (MSW). She has over a decade of experience in assisting elderly and disabled populations navigate governmental and private programs to obtain the monetary assistance they need to lead better lives. As she watched her parents begin their own retirement journeys and navigate similar systems to obtain Social Security, Medicare and other retirement benefits, she gleaned a further personal knowledge about the topic and is eager to share what she has learned with others.