What is Medicare Supplement (Medigap) Insurance?
A Medicare Supplement insurance policy (also known as Medigap) is health insurance offered by private insurance companies to help cover some of the out-of-pocket costs that Original Medicare doesn’t pay—such as copayments, coinsurance, and deductibles.
When you have both Original Medicare and a Supplemental policy, Medicare pays its share of approved healthcare costs, and your Medigap policy helps cover the rest.
It’s important to note that Supplemental Insurance (Medigap) is not the same as a Medicare Advantage Plan. Medicare Advantage is an alternative way to receive your Medicare benefits, while a Supplemental Insurance policy helps supplement your Original Medicare coverage. "Medicare Advantage" and "Original Medicare" are two different kinds of policies.
Original Medicare refers to the Medicare as it was created under Lyndon Baines Johnson in 1965, whereas Medicare Advantage refers to a separate kind of policy that was created under Bill Clinton's administration in 1997.
Original Medicare is healthcare managed by the Centers for Medicare and Medicaid Services (CMS), which is a governmental agency, and Medicare Advantage plans are fully managed by private insurance companies, such as United Healthcare or Humana.
What you need to know about Medicare Supplement policies
- You must have Medicare Part A and Part B.
- If you have a Medicare Advantage Plan, you can switch to a Medicare Supplement insurance policy during certain enrollment periods or if you meet certain criteria (underwriting may apply), but make sure you can leave the Medicare Advantage Plan before your Medicare Supplement insurance policy begins.
- You pay the private insurance company a monthly premium for your Medicare Supplement insurance policy in addition to the monthly Part B premium that you pay to Medicare.
- A Medigap policy only covers one person. If you and your spouse both want Medigap coverage, you'll each have to buy separate policies.
- You can buy a Medicare Supplement insurance policy from any insurance company that's licensed in your state to sell one.
- Any standardized Medicare Supplement insurance policy is guaranteed renewable even if you have health problems. This means the insurance company can't cancel your Medicare Supplement insurance policy as long as you pay the premium.
- Medicare Supplement insurance policies sold after January 1, 2006 aren't allowed to include prescription drug coverage. If you want prescription drug coverage, you can join a Medicare Prescription Drug Plan (Part D).
- It's illegal for anyone to sell you a Medigap policy if you have a Medicare Advantage Plan, unless you're switching back to Original Medicare.
Information obtained from www.medicare.gov
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