Supplemental Health Insurance: Medigap

Published In Government Programs

September 6th, 2015

Medicare is the federal program that pays for medical services provided to individuals who have reached the age of 65. Medicare only covers eligible services, which are typically those provided or ordered by a doctor to help a patient recover from an injury or illness. Medicare does not pay for services that are not medically necessary or for services that help patients manage a long-term condition from which recovery is not expected.

Even if a service is covered by Medicare, the patient may be required to pay part of the cost. Some seniors insure themselves against the portion of a bill that Medicare does not pay by purchasing “Medigap” coverage.

Tip: For basic information about Medicare, how it works, and what it covers, see Understanding Your Elderly Parents’ Medicare Coverage. For important information about what Medicare does not cover, see Don’t Be Blindsided: What Medicare Won’t Cover.

What is Medigap?

Medigap is the informal name given to Medicare Supplement Insurance policies. The policies are sold by private insurance companies. The policies pay for copayments, coinsurance, and deductibles that are not covered by Medicare.

As a general rule, a Medigap policy does not cover services unless Medicare pays its share of those services. In other words, if a service is not covered by Medicare, it will not be covered by a typical Medigap policy. Only the portion of a covered service that is not paid by Medicare is covered by Medigap insurance.

Some policies make an exception for certain expenses that Medicare does not cover, such as medical care that you receive when you travel outside the United States. Those exceptions are usually quite limited. You should not expect a Medigap policy to pay for dental care, eye care or eyeglasses, long-term assisted living care, or other services that Medicare does not cover.

Does Medigap pay for prescription drugs?

Under the law that applies to policies sold after January 1, 2006, Medigap does not pay for prescription drugs. You can get prescription drug coverage by joining a Medicare Prescription Drug Plan (Medicare Part D).

If you have a Medigap policy issued before 2006 that has prescription drug coverage, you can choose to drop the drug coverage without dropping the entire policy. If you do that, you have 63 days to enroll in Medicare Part D. If you wait more than 63 days, a penalty may be assessed for your late enrollment.

Who is eligible for Medigap?

If you are eligible for Medicare, you will probably be able to buy Medigap coverage. However, you must have both Medicare Part A and Medicare Part B as a condition of obtaining Medigap insurance.

If you have a Medicare Medical Savings Account (MSA) plan, you cannot buy Medigap coverage. If you have a Medicare Advantage Plan, you can buy Medigap coverage, but to avoid duplicating your coverage you should leave the Medicare Advantage Plan before you purchase Medigap coverage.

Can my insurer drop my Medigap coverage?

Renewal of your Medigap coverage is guaranteed as long as you continue to pay the premium. Your insurer cannot end or fail to renew your insurance policy as long as your premium payments are current.

How can I learn more about Medigap?

The United States government has helpful information online if you want to explore Medigap coverage in more detail. You might want to visit the following pages:

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