Medicare provides health insurance coverage for millions of Americans, but for some people, including those who anticipate increased health challenges in the future, the program’s coverage limits can be a concern. As a result, some Medicare recipients choose to purchase Medicare supplement insurance plans to add to the coverage they already receive through Original Medicare. These Medicare Supplement, or Medigap, plans can help cover some of the costs that Original Medicare Part A and Part B do not.

What is Medigap Insurance?
Medigap is supplemental insurance coverage that is purchased from a private insurer to reduce out-of-pocket expenses that may be left over after Original Medicare’s coverage is exhausted. It is paid for through a monthly premium to the private insurance company and can be used to cover expenses that Original Medicare does not cover or to make up the difference in coverage expenses that are left after Medicare coverage pays its share.

These expenses can include things like deductibles, coinsurance, and copayments, but they may also include things like coverage for medical expenses incurred outside of the United States. Each Medigap plan will have its own limitations and coverage exceptions. Medigap plans are standardized by the federal government and identified by letters. Your benefits and monthly premium will depend on the plan you purchase, so compare your options to find the policy that fits your needs.

What Does Medigap Insurance Cost?
Medigap plans are standardized in most states and are named A through N. Each plan will cover different expenses at differing levels. Your monthly premium expenses for a Medigap plan are typically related to the benefits provided by that particular plan, but costs can vary.

Your eligibility and costs may depend on when you purchase a Medigap plan. When you turn 65 years old and are enrolled in Medicare Part B, you have a six month Medigap Initial Enrollment Period. During this period of time, you have a guaranteed issue tright to purchase any Medigap plan sold in your state regardless of any pre-existing conditions. If you forgo obtaining supplemental insurance through a Medigap plan during this time period and want to purchase a Medigap plan later, you will likely be subject to medical underwriting and can be charged more or turned down from a plan.

Are There Restrictions on Medigap Plans?
In order to be eligible to purchase Medigap insurance, there are a number of restrictions in place and obligations that must be met. Medigap is supplemental insurance for Medicare recipients with Original Medicare Part A and B coverage. Most Medigap plans are available for Medicare recipients 65 years of age or older. If you are receiving Medicare benefits under the age of 65 due to disability, you may not be able to purchase a Medigap plan until you turn 65. Check the plans available in your state.

You cannot have both Medigap insurance and a Medicare Advantage plan at the same time, and it is illegal for a provider to sell someone a Medicare Advantage plan when the person has Medigap coverage. As is the case with Medicare, Medigap is also individual coverage, so if you have a spouse, he or she will need to purchase a policy separately.

Your Medigap provider must also be licensed to sell policies in your state. Finally, Medigap policies purchased after 2006 are not eligible to cover prescription medications. If you want prescription drug coverage through a Medicare insurance product, you will need to enroll in a stand-alone Part D Prescription Drug Plan.

Do You Need a Medigap Policy?
Many Medicare recipients are concerned about their out-of-pocket costs with Original Medicare Part A and Part B insurance. Life can be unpredictable, and if you experience a medical crisis or you could be responsible for coinsurance that may threaten your financial security. While Original Medicare provides health insurance coverage for a large number of possible and common healthcare expenses, your circumstances may change. Many Medicare recipients choose to purchase a Medigap policy when they are first eligible to make sure they cannot be turned down later based on a pre-existing condition.

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Medicare Part A