Supplemental or "Medigap" Insurance

KIPDA

Medicare will not cover all of your healthcare costs. Deductibles, copayments and medical charges beyond Medicare’s approved limits can add up quickly. That is why approximately 2/3 of all Medicare recipients purchase a supplemental or “Medigap” policy. “Medigap” means that these health insurance policies are intended to fill in the “gaps” in Medicare coverage—the charges you would have to pay out of pocket.

Medigap policies are standardized in most states, so you can easily compare policies and prices as you shop. (Policies are categorized as Plans A through J—from least to most comprehensive.) Insurance companies must follow federal guidelines that require each policy to include certain core benefits—such as co-payments and extended hospital coverage. For a higher premium, you can also purchase more comprehensive coverage for such items as prescription drugs, preventative care, and the amount of your deductible. In some states, you can also opt for a “Medicare Select” policy, costing less than standard policies, but including restricted choice of physicians and hospitals. Medigap coverage is parallel to Medicare—that is, if an item isn’t covered at all by Medicare, Medigap policies won’t cover it either. For example, Medigap policies do not cover long-term care, vision or dental care, hearing aids, or private duty nursing.

Before deciding to purchase a Medigap policy, it is important to assess your needs, and to decide which features are right for you. Read each policy carefully to be certain of what exactly is covered, as well as what restrictions or exclusions exist. (For example, not all plans cover home health care or emergency health care during travel in a foreign country.) For a convenient comparison of policies in your state, go to “Medigap Compare” on the U.S. government’s www.medicare.gov website.

Not everyone needs Medigap insurance. If you are enrolled in the Medicare Managed Plan, you do not need a Medigap policy, and it is illegal for a company to sell you one. If you meet (or are close to meeting) the financial criteria for Medicaid, you also do not need a supplemental policy.

Medigap policies are guaranteed renewable, which means they cannot be cancelled unless you fail to pay the premium. The best time to purchase a Medigap supplemental policy is within six months of enrolling in Medicare
Part B. During this time period, you cannot be denied coverage due to preexisting health conditions. If you do not purchase a policy during the initial enrollment period, you may not be accepted later on by the company you choose—or you may have to pay more.

On the other hand, don’t be pressured into rushing as you select a plan. Weigh the benefits of various policies, and be clear on what is covered, and what the premiums will be. Work with an agent who comes highly recommended and who is familiar with Medigap policies.

For more information about Medicare supplemental insurance, or with help selecting a policy, contact your state’s Health Insurance Counseling and Advocacy Project office or State Health Insurance Assistance Program.
These agencies provide free, confidential advice to Medicare beneficiaries and their families. You can locate your state’s insurance assistance program by calling the Eldercare Locator at 1-800-677-1116 or online at www.eldercare.gov.