What is a Medicare Supplement (Medigap)?

Medicare supplemental insurance policies are secondary to Original Medicare, and sometimes referred to as Medigap Plans. They range from Plan A through Plan N, with plans varying by state. We recommend Medigap for people who are new to Medicare and want to see doctors without a referral. 

You’re able to see any medical doctor in the United States that accepts Original Medicare as payment and Medigap Plans help pay for some or all of the costs that Original Medicare Part A and Part B don’t not cover. In other words, Medicare is the primary payer and Medigap is the secondary payer. Medigap Plans are standardized and regulated by the government, so all plans with the same letter will have the same coverage no matter which insurance company you select. Premiums will vary from one carrier to another, as will ancillary benefits, like vision, gym, hearing, and more, so you’ll want to shop around for the best rate and plan based on your needs. 

Because Medigap Plans don’t cover prescription drugs you will want to add a stand-alone drug plan also known as Part D.

How Much Does a Medicare Supplement (Medigap) Cost?

Cost will be based on the type of coverage you’re looking for. Medicare Supplement Plans have premiums that can vary from $60 a month to more than $300 a month. Typically plans with lower monthly premiums will have higher out-of-pocket costs and deductibles, while higher premium plans will have lower out-of-pocket costs associated.

Additionally, there are other factors that determine your premium:

• Plan: There are 10 types of plans (A, B, C, D, F, G, K, L, M, and N) available but vary by state. Plans with higher coverage will cost more. For example, plan A doesn’t cover as much as plan F, so plan F will cost more.
• Insurance company: Although all Medicare supplements are standardized and regulated by the government, their monthly cost will vary from one company to another. For example, one company may charge $138 per month for plan G, while another company charges $160 per month; the supplemental coverage offered by both companies for their plan G will be identical. The price difference is based on the company. 
• Geographic area: Rates will vary based on your geographic location. One part of the country may have lower rates than others. 
• Age: The rate for your plan will vary depending on how they factor in age. Some plans may charge you a rate based on the age you are when you buy the plan, some charge everyone the same, and others charge based on your current age. 

One last thing to keep in mind. The yearly Medicare part B* deductible in 2020 is $198 per calendar year and most supplement plans do not cover it. In other words, you’ll have to meet that deductible first before your supplement plan covers any medical expenses.

*As of January 1, 2020 people new to Medicare can’t buy plans that cover the Medicare Part B deductible. This means that Medicare Supplement Plans C and F will no longer be available to new Medicare enrollees. However, if you already have a Plan C, Plan F, or high-deductible Plan F, you can keep it. If you were eligible for Medicare before January 1, 2020, you also may be able to buy Medicare Supplement Plan C, F, or high-deductible Plan F.

How Do I Sign up for a Medigap Plan?

You’ll need to have your Medicare part A and B in place and find out which Medigap Plans are available in your area. You can technically sign up for a Medigap Plan any time of the year, but you may be subject to health underwriting and could be denied eligibility if you do not meet their requirements. That is why it’s so important you don’t miss your open enrollment period.

• Your open enrollment period: This period automatically starts the month you turn 65 and are enrolled in Medicare Part B (Medical Insurance). It can’t be changed or repeated. This is your 6-month Medigap Open Enrollment Period. During this period you can buy any Medigap policy sold in your state, regardless of any health concerns, and your pricing will generally be better. After this enrollment period, you may not be able to buy a Medigap policy. If you are able to buy one, it may cost more due to past or present health problems.
  • What happens if I am past 65 and have employer or union coverage?: If you currently have employer or union coverage you may want to wait to enroll in part B. When your employer or union coverage ends, you’ll want to sign up for part B. This is when your 6 month open enrollment period begins. If you enrolled in part B while you still had coverage, your open enrollment period would have started then. If more than 6 months have passed, you’ve missed your open enrollment period. 
  • What if I’m under 65 years old?: Federal law doesn’t require private insurance companies to sell medicare supplement policies to people under 65. Some states do offer them to people under 65, but they may cost more.
• Outside Open Enrollment Period: If you apply for Medigap coverage after your open enrollment period, there’s no guarantee that an insurance company will sell you a Medigap policy if you don’t meet the medical underwriting requirements, unless you qualify through special circumstances.
• Switching plans: People sometimes choose to change plans due to cost, benefits, or the insurance company. In most cases, you won’t have a right under federal law to switch Medigap policies, unless one of these applies:
  • You’re eligible under a specific circumstance or guaranteed issue right. We always recommend you consult with a specialist in your area as guaranteed issue rights can vary from state to state and carrier to carrier.
  • You’re within your 6-month Medigap open enrollment period.

What happens if I don’t sign up for a supplement plan?

You will not be penalized for not signing up for a supplement plan, unlike you would be if you don’t sign up for Part B and Part D. Signing up for a Medigap Plan is totally optional.

Why should I sign up for a Medicare Supplement?

You will have peace of mind knowing you can see any medical provider in the United States that accepts Medicare. 

We’re on your side

Still have questions or need assistance with getting a Medigap quote? You’re not alone. AHIC is here to walk you through the process of applying for Medicare or shopping for the plan that’s right for you. Our services are free for you and we’ll be here to help for the lifetime of your policy.