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Medicare pays for a large number of health care needs, be they supplies or services. Medicare does not, however, pay for everything. Medicare recipients may want to consider buying supplemental health insurance such as a Medigap insurance plan . This type of insurance plan will pick up where Medicare leaves off. Medigap insurance plans vary. The appropriate one for you depends on your needs and the Medicare insurance plan you have. Compare your Medicare insurance plan, which may be original Medicare or a Medicare replacement insurance plan, such as an HMO or PPO. Then pick a Medigap insurance plan (sometimes called a supplemental insurance plan) which will fill the gaps and meet your needs. If you have a Medicare replacement insurance plan (sometimes called a Medicare Advantage plan) you cannot use a Medigap insurance plan. Compare the costs for all.
 

Medigap insurance plans are sold through private companies and cover the costs Original Medicare does not, including copayments, coinsurance, deductibles, and more. Some Medigap insurance plans will even cover medical care when you travel outside the United States. It is also important to consider your future medical needs when picking a Medigap insurance plan. It is possible you might not be able to change insurance plans.

With Original Medicare and a Medigap insurance plan combined, Medicare pays their approved amount first and then your supplemental insurance plan pays their part. You monthly premium will depend on the insurance plan you pick. There are a number of different Medigap insurance plans that are standardized and identified by letters (keep in mind standardization is different in Massachusetts, Minnesota, and Wisconsin). There are rules for Medigap insurance plans that are governed by both state and Federal law. For example, the insurance must be identified as Medicare Supplement Insurance, and you can only be sold one of the standardized insurance plans. Insurance plans offer the same basic benefits but many have additional benefits.

Once you have decided on the standardized insurance plan you want, you will then need to find a company that sells Medigap insurance plans in your state. There are numerous companies. You can call the State Health Insurance Assistance Program for information on which companies offer insurance plans in your state. They may well have a rate comparison shopping guide—be sure to ask about one.

After you find out which standardized option is best for you, what they cover, how insurance companies determine what to charge you, and who offers the most appropriate insurance plan in your state, you should call insurance companies. Call several of them.

You will find that costs vary between different companies. You should confirm that the companies are reliable. Call your State Insurance Department to find out if your state keeps records regarding complaints. If they do, they may be able to share these complaints with you.

Research how financially strong a company is at the library or online. There are various rating agencies that can help (Standard & Poor’s, A.M. Best and thestreet.com). It is also wise to consult people you know who have a plan and ask how they feel about the company they have.

Before calling the insurance companies ensure that you are within the Medigap Open Enrollment Period, or the Annual Election Period. When you start calling, you should also have some specific questions in mind and take notes on the answers:

• Is the company licensed in your state?
• Do they sell the specific insurance plan you want? Not all companies sell every insurance plan, so be sure they have the appropriate insurance plan.
• Do they use underwriting for the Medigap insurance plan you want? After your six month open enrollment, companies offering Medigap insurance plans may use medical underwriting. The term “medical underwriting” refers to an insurance company taking considering various factors to determine if you are eligible for a insurance plan and what premiums you are charged for that insurance plan. Rules for how this works regarding Medigap insurance plans vary.
• Do they have a waiting period for pre-existing conditions? If so, is this acceptable for your medical needs?
• How is the insurance plan you want priced? Is it affected by age, community, or attained age ratings? Issue-age rating refers to a insurance plan price based on your age when you join. Community-age rated refers to an insurance plan where the average age of those in the insurance plan is used to determine the premium. Attained-age refers to insurance plans that increase as you age. These often start low but can eventually become higher than other insurance plans.
• What is the insurance plan premium at your age? How often does the insurance plan increase as you age?
• Has the premium for the insurance plan increased over the past three years for inflation or any other reason? If so, by how much?
• Does the company offer any discounts or additional benefits (innovative benefits)?
• Is there any charge to process claims automatically?

Also, be sure to check for fraudulent or illegal practices. No one should try to pressure you into buying or changing a insurance plan or company. They should also never sell you a Medigap insurance plan when you have one already (unless you let them know in writing that you insurance plan to cancel your existing insurance plan). In most situations, they should not try to sell you a Medigap insurance plan if you have Medicaid. If you have a Medicare Advantage plan they should not sell you a Medigap insurance plan unless the Advantage plan ends before the Medigap insurance plan begins.

Be wary of anyone who says or insinuates that a Medigap insurance plan is part of Medicare or any other government program. If they are selling you a Medigap insurance plan they do not work for Medicare. You may find some who use letters or symbols that seem similar to government agencies such as the Social Security Administration, U.S. Department of Health & Human Services, and others. The Federal government doesn’t recommend specific insurance plans or companies. There may also be insurance plans that cannot be sold in your state.

They are also not allowed to sell a Medicare Advantage Plan if you want to stay in Original Medicare and buy a Medigap insurance plan. Medicare Advantage Plans are not identical to Original Medicare and if you have a Medicare Advantage Plan you cannot enroll in a Medigap insurance plan. If you get a Medicare Advantage Plan, you will be disenrolled in Original Medicare.