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Medicare Supplemental Insurance (Medigap)

What is it? What does it cover? When and how do I qualify? Where do I get it?

Medigap policies are sold by private insurance companies but are not like Medicare Advantage Plans (HMOs, PPOs). It is sometimes called "Medicare Supplement Insurance" and works with your Medicare coverage to help pay some of your out-of-pocket costs like copayments, coinsurance, and yearly Medicare deductible.

There are many Medigap Supplemental health insurance plans from which to pick. There can be big differences in what the various plans charge for the same basic benefits. Medigap policies must follow 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.

Medigap policies do not cover:

• Long-term care (care in a nursing home)
• Vision or dental care
• Hearing aids
• Eyeglasses
• Private-duty nursing.

The following are NOT Medigap policies:

• Medicare Advantage Plans like an HMO or PPO
• Medicare Prescription Drug Plans
• Medicaid
• Employer's or union's plans
• Benefits Program
• TRICARE
• Veterans' benefits
• Long-term care insurance policies
• Indian Health Service, Tribal and Urban plans

Medicare Medigap Insurance Providers

Medigap supplemental insurance companies set their own monthly premiums. How they choose to set their prices can have an affect on how much you will pay now and in the future. The company can choose to base their charges on:

1. Community-rated: No matter how old you are, the policy costs the same. With this structure, younger people may pay more and older people may pay less.
2. Issue-age-rated: the charges are related to your age at the time of purchase - which means you will be charged the same amount as others in your community who are the same age.
3. Attained-age-rated: The charges automatically go up in price as you age.

Your can most likely count on the cost of your Medigap insurance going up each year because of inflation and rising health care costs. Some companies increase their rates faster than others.

Keep in mind that companies do not have to sell you a Medigap policy except during open enrollment or when you can show continued coverage. It may be difficult to change a policy that you are unhappy with before open enrollment. Before you buy a policy, take your time to compare your options, and premiums. The following is a list of questions you should answer before you choose your plan:

• How much can you afford to spend on monthly premiums for Medigap?
• How does the plan's premium compare to other plans for the same benefits?
• What benefits do you really need? Don't buy more benefits than you need, you can save money if you don't buy coverage for benefits you do not have trouble covering, for example Part B deductibles.
• How hard is it to file claims? Can the doctor file for you?
• Is there a waiting period to cover pre-existing conditions? If so, how long is it? And do you have any previous coverage that applies toward reducing the waiting period?

When To Enroll In MediGap

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. It will last for six months and during the period an insurance company cannot:

• Refuse to sell you any plan it sells
• 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 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.

MediGap - Open Enrollment

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 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 envelope 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

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