What is a Medigap Policy?
Medigap policies are sold by private insurance companies, but are not like Medicare Advantage Plans (HMOs, PPOs). It is sometimes called “Medicare Supplement Insurance.” A basic Medigap policy works with Original Medicare coverage to help pay some of your out-of-pocket costs like co-payments, coinsurance, and the yearly Medicare deductible.
There are many Medigap supplemental health insurance plans from which to pick. There can be big differences in the charges of various plans for the same basic benefits. Medigap policies must follow the Federal and State laws that are designed to protect you. Insurance companies must clearly identify their policies as ‘Medicare Supplement Insurance’ on the front of the policy. A Medigap policy can only cover one person. If you are married both you and your spouse must buy separate policies.
The following are NOT Medigap policies:
- Medicare Advantage Plans like an HMO or PPO
- Medicare Prescription Drug Plans
- Employer’s or union’s plans
- Benefits Program
- Veterans’ benefits
- Long-term care insurance policies
- Indian Health Service, Tribal and Urban plans
What does a basic Medigap Policy cover?
Medigap insurance companies can only sell you a “standardized” Medigap policy. Letters A through N identify the different policies. Each standardized Medigap policy must offer the same basic benefits, no matter which insurance company sells it. Every insurance company must make Medigap Plan ‘A’ available if it offers any other Medigap policy. Not all Medigap policies may be available in your state. Not all plans include all basic benefits.
- Medicare Part A Coinsurance
- Hospital costs up to an additional 365 days after Medicare benefits are used up
- Medicare Part B Coinsurance or Co-payment
- Blood (First 3 Pints)
- Part A Hospice Care Coinsurance or Co-payment
- Skilled Nursing Facility Care Coinsurance
- Medicare Part A Deductible
- Medicare Part B Deductible
- Medicare Part B Excess Charges
- Foreign Travel Emergency (Up to Plan Limits)
- At-home Recovery (Up to Plan Limits)
- Medicare Preventive Care Part B Coinsurance
- Preventive Care Not Covered by Medicare (up to $120)
Medigap policies do not cover:
- Long-term care (care in a nursing home)
- Vision or dental care
- Hearing aids
- Private-duty nursing.
When do I enroll in a Medigap Policy?
It is highly recommended that you purchase your Medigap policy during open enrollment. Your open enrollment period begins on the first day of the month in which you are both age 65 or older and enrolled in Medicare Part B. This period will last for six months. During that 6 month period an insurance company cannot:
- Refuse to sell you any plan it offers
- Make you wait for coverage to start
- Charge you more for a Medigap policy if you have a health problem
- In some cases Medigap insurance companies can make you wait, up to six months, for coverage of a ‘pre-existing condition.’ Be sure and do your homework and ask if you will be required to wait due to a pre-existing condition. Not all Medigap plans require you to wait.
The supplemental health insurance company must shorten or eliminate any waiting period if:
- You bought your Medigap during an open enrollment period
- You buy your policy after open enrollment, but you had health coverage that will pass Medicare’s ‘Creditable Coverage’ criteria, which includes most types of health care insurance coverage. To find out if your basic health coverage is creditable coverage, call a Medigap insurance company or your State Insurance Department
- For coverage to be creditable you cannot have had a break in coverage that lasted more than 63 days in a row immediately before you buy your policy.
What do I do if the open enrollment period has passed?
Once you are past your “open enrollment” period, the insurance companies do not have to sell you a policy. In addition they are allowed to charge you extra for the policy. There are some exceptions to that; for example, your private health care coverage ended or you were in a Medicare Advantage Plan. If you have decided to not sign up for a basic Medigap policy during open enrollment, you will need to have copies of the following paperwork to prove your guaranteed issues rights:
- A copy of any letters, notices, and/or claim denials as proof of continued health care coverage
- All paperwork must have your name on it
- All postmarked envelopes from the insurance company in which the papers came, this helps prove dates of coverage
Other words of advice…
If you did not get a Medigap insurance policy during open enrollment and are thinking of one now:
- Apply before your current health coverage ends
- You can choose to start your Medigap coverage the day after your current policy ends. This will prevent a break in your health coverage
- Consider looking into a Medicare Advantage Plan which may offer additional benefits
Can my Medigap insurance company drop me?
If you bought your Medigap policy after 1992, in most cases the Medigap insurance company can’t drop you because the Medigap policy is guaranteed renewable. This means your insurance company can’t drop you unless one of the following happens:
- You stop paying your premium.
- You weren’t truthful about something on the Medigap policy application.
- The insurance company becomes bankrupt or insolvent.
However, if you bought your Medigap policy before 1992, it might not be guaranteed renewable. At the time these Medigap policies were sold, state laws might not have required that these Medigap policies be guaranteed renewable. This means the Medigap insurance company can refuse to renew the Medigap policy, as long as it gets the state’s approval to cancel your Medigap policy. However, if this does happen, you have the right to buy another Medigap policy.