Medigap Overview

Do you know what a Medigap Policy is? These are policies offered by private insurance companies. However, there are not like the plans under Medicare Advantage Plans (the HMOs and PPOs). The basic Medigap policy reinforces your Original Medicare coverage to assist you with payment of your out-of-pocket costs, such as coinsurance, deductible, and copayments. We sometimes call this coverage “Medicare Supplement Insurance.”

If you opt for Medigap supplemental health insurance, you have many plans from which to select. However, there variances in fees from plan to plan can be substantial for comparable benefits. There are federal and state laws outlining policies Medigap policies must adhere to. These laws exist for your protection. A Medigap policy must be clearly identified as a ‘Medicare Supplement Insurance’ policy right on the front page of the policy itself. Medigap policies can cover only one individual. Thus, spouses must purchase their own policies.

Don’t get confused. These are NOT Medigap policies:

  • Benefits Program
  • Employer’s or union’s plans
  • Indian Health Service, Tribal and Urban plans
  • Long-term care insurance policies
  • Medicare Advantage Plans like an HMO or PPO
  • Medicare Prescription Drug Plans
  • Medicaid
  • TRICARE
  • Veterans’ benefits

What exactly is covered by a basic Medigap Policy?

The only coverage a Medigap insurance company is permitted to offer to you is a “standardized” Medigap policy. Each standardized Medigap policy must offer identical benefits, regardless of the company offering coverage. Each policy is delineated by letters. The policies run from letter A through L. All Medigap insurance companies offering any coverage whatsoever, must also offer Plan A. However, the other lettered policies may not be available in all states. Be aware that not all plans will include basic benefits.

Medigap Benefits

  • At-home Recovery (Up to Plan Limits)
  • Blood (First 3 Pints)
  • Foreign Travel Emergency (Up to Plan Limits)
  • Hospice Care Coinsurance or Copayment
  • Medicare Part A Deductible
  • Medicare Part B Deductible
  • Medicare Part B Excess Charges
  • Medicare Part A Coinsurance and all costs after hospital benefits are exhausted
  • Medicare Part B Coinsurance or Copayment for other than preventive services
  • Medicare Preventive Care Part B Coinsurance
  • Preventive Care Not Covered by Medicare (up to $120)
  • Skilled Nursing Facility Care Coinsurance

What is not covered by a Medigap Policy?

The following are not covered:

  • Eyeglasses
  • Hearing aids
  • Long-term care (care in a nursing home)
  • Private-duty nursing
  • Vision or dental care

Can I enroll in a Medigap Policy at any time?

You need to complete your enrollment during the open enrollment period, which starts of the first day of the month you are both enrolled in Medicare Part B and 65 years of age. The period lasts six months from that date.

If you attempt to enroll during that period, the insurance company cannot:

  • Refuse you coverage of any plan it offers
  • Delay start of coverage
  • Adjust fees for a Medigap policy based on health problems
  • There are instances in which a ‘pre-existing condition’ permits Medigap insurance companies to make you wait for a period of up to six months for coverage of that condition. Do your research, and make sure to ask whether you will be required to wait due to a pre-existing condition. You are not required to wait under all Medigap plans.

The insurance company will be required to reduce the waiting period or eliminate it altogether if:

  • Your Medigap policy was purchased during an open enrollment period

If you purchased your policy after open enrollment you may still be entitled to reduced or eliminated waiting period if but you had health coverage that passes Medicare’s ‘Creditable Coverage’ criteria, which includes most types of health care insurance coverage.

Need to know if your basic health coverage is creditable coverage? Call Medigap insurance company or your State Insurance Department.

Your coverage cannot be considered creditable if you have had a break in coverage lasting more than 63 days in a row immediately before you buy your policy.

My open enrollment period has lapsed. What can I do now?

If you are out of your “open enrollment period,” no insurance company is required to extend you a policy. They are also permitted to increase your fees for any policy they do offer you. There are two exceptions to those scenarios. One, your private health care coverage has ended. Two, you were in a Medicare Advantage Plan. If you missed your open enrollment period, you will need to provide proof of your rights. Be prepared to provide copies of any letters, notices, or claim denials as proof of your continued health care coverage.

Please note:

  • Your name must appear on all paperwork
  • Retain and provide all postmarked envelopes from the insurance company in which the papers came. This helps you prove your dates of coverage.

If you missed your open enrollment period and want to sign up for Medigap insurance now, consider these tips:

  • Apply before your current health coverage ends.
  • To guard against a break in coverage, begin your Medigap coverage the day after your current policy ends.
  • Investigate a Medicare Advantage Plan which may offer additional benefits.

Once I have Medigap, can my insurance company stop coverage?

If your Medigap policy was purchased after 1992, the insurance company cannot drop you as a client. Policies purchased after this time are guaranteed renewable.

The only conditions under which the insurance company can drop you are:

  • You fail to pay your premium.
  • You misrepresented facts on your Medigap policy application.
  • The insurance company itself becomes insolvent or files bankruptcy.

Any policy purchased prior to 1992 could be at risk to be non-renewed. Prior to 1992, no laws were in place mandating that Medigap policies be guaranteed renewable. If the insurance company acquires state approval to cancel your Medigap policy bought prior to 1992, it can do so. If this were to occur, you have the legal right to purchase another Medigap policy from a different provider.