Supplementing original Medicare with a Medigap policy can ease the pain of medical bills.

4 minute read

Once you become eligible to enroll in Medicare at age 65, you may think you’ll never pay another medical bill. However, the government insurance program doesn’t cover everything, which is why many people purchase Medicare supplement insurance, also known as Medigap.

Medigap insurance supplements Medicare by filling in the “gaps” of Medicare Part A and Part B coverage such as copayments, coinsurance, and deductibles. Depending on your needs, you can select one of many Medigap plans – standardized plans that you purchase from a private insurer – on the Medicare Plan Finder.

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1. Medigap pays costs not covered by Medicare

Medigap pays costs not covered by Medicare

Medicare Part A is free for most people and covers inpatient hospital stays, short-term home health care, short-term skilled nursing and hospice care.

Medicare Part B covers medically necessary and preventive services and has a standard monthly premium of $170.10 for 2022 for most people. However, both Medicare Part A and Part B have deductibles you must pay before coverage kicks in.

Medicare Part A has a deductible of $1,556 for each benefit period. The deductible for Part B is $233, and you must pay 20% for doctor services, outpatient therapy, and durable medical equipment such as canes, crutches, walkers, kidney machines, and other items that help with daily living activities after you meet the deductible.

Depending on which Medigap plan you purchase, a Medigap policy can help pay remaining costs so you’re not stuck paying for costs not included in Part A and Part B coverage.

Find out: 8 Things to Know About Medicare Open Enrollment

2. You must have both Part A and Part B to get Medigap

You must have both Part A and Part B to get Medigap

You must have both Medicare Part A and Part B in order to purchase a Medigap policy. Medicare doesn’t cover any costs associated with purchasing a Medigap plan, and you must still pay the monthly premium for Medicare Part B in addition to the Medigap premium.

Monthly Medigap insurance coverage and premium amounts vary, depending on what’s included in the policy and the state where you live.

Find out: 5 Medicare Myths About Long-Term Care

3. Medigap is different from a Medicare Advantage Plan

Medigap is different from a Medicare Advantage Plan

Don’t confuse Medigap with a Medicare Advantage Plan, another type of Medicare-related insurance. Medicare Advantage Plan must also be purchased from a private insurer and includes Medicare Parts A and B, along with additional coverage to pay for services that Medicare doesn’t cover. Just like with Medigap, you can find a Medicare Advantage Plan on the Medicare Plan Finder.

However, if you’re thinking you’ll be better covered by purchasing both types of plans, that won’t work: Medigap and Medicare Advantage Plans can’t work together, according to Medicare. That’s because Medicare Advantage Plans are a way to get Medicare benefits, but a Medigap policy only “supplements” Original Medicare benefits.

It’s illegal for anyone to sell you a Medigap policy if you have a Medicare Advantage Plan unless you’re switching back to Original Medicare.

Find out: Watch Out for These 5 Signs of Health Insurance Open Enrollment Scams

4. New Medigap policies don’t cover prescription drugs

New Medigap policies don’t cover prescription drugs

Some Medigap policies sold in the past used to cover prescription drug costs. However, that’s no longer the case. “Medigap policies sold after January 1, 2006 aren’t allowed to include prescription drug coverage,” according to Medicare. “If you want prescription drug coverage, you can join a Medicare Prescription Drug Plan (Part D).

Find out: How Medicare Part D can Save You Big Bucks on Medications

5. Medigap policies are guaranteed renewable

Medigap policies are guaranteed renewable

A Medigap policy is guaranteed renewable despite any health issues you may have. As long as you pay the premium on your Medigap plan, the insurance company isn’t allowed to cancel the policy.

Find out: 6 Surprise Costs That can Drain Your Retirement Savings 

6. Medigap policies won’t pay for everything

Medigap policies won’t pay for everything

Most Medigap policies don’t cover long-term care, vision care, hearing aids, or private-duty nursing. If you want long-term care coverage as you age, you may want to purchase a long-term care insurance policy to cover long-term skilled nursing, assisted living, or home health costs.

7. Enrollment timing matters

Enrollment timing matters

The best time to buy a Medigap policy is during your six-month Medigap open enrollment period, which begins automatically the month you’re age 65 and enrolled in Medicare Part B. If you don’t purchase a Medigap policy during Medigap open enrollment, you may not be able to buy one later, according to Medicare.

You’ll also generally have better choices among policies and pricing during the Medigap open enrollment period. “During that time you can buy any Medigap policy sold in your state, even if you have health problems,” according to Medicare.

8. Medigap approval isn’t guaranteed

Medigap approval isn’t guaranteed

As with many other types of insurance, most Medigap insurance companies use underwriting guidelines to determine whether your application is approved and the premium rate. However, applying during Medigap open enrollment has a big advantage when it comes to cost.

If you buy a policy during Medigap open enrollment – even if you have health problems – you can buy the same Medigap policy at the same premium charged to buyers in good health.

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About the Author

Deb Hipp

Deb Hipp

Deb Hipp is a full-time freelance writer based in Kansas City, Mo. Deb went from being unable to get approved for a credit card or loan 20 years ago to having excellent credit today and becoming a homeowner. Deb learned her lessons about money the hard way. Now she wants to share them to help you pay down debt, fix your credit and quit being broke all the time. Deb's personal finance and credit articles have been published at Credit Karma and The Huffington Post.

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