Medigap

Medigap (also Medicare supplement insurance or Medicare supplemental insurance) refers to various private health insurance plans sold to supplement Medicare in the United States. Medigap insurance provides coverage for many of the co-pays and some of the co-insurance related to Medicare-covered hospital, skilled nursing facility, home health care, ambulance, durable medical equipment, and doctor charges. Medigap's name is derived from the notion that it exists to cover the difference or "gap" between the expenses reimbursed to providers by Medicare Parts A and B for the preceding named services and the total amount allowed to be charged for those services by the United States Centers for Medicare and Medicaid Services (CMS). As of 2006, 18% of Medicare beneficiaries were covered by a Medigap policy. Public-option Part C Medicare Advantage health plans and private employee retiree insurance provides a similar supplemental role for almost all other Medicare beneficiaries not dual eligible for Medicaid.

Medicare eligibility starts for most Americans when they turn 65 years old. Those who have been on Social Security eligibility for 24 months can also qualify for Medicare Part A and Part B. A person must be enrolled in part A and B of Medicare before they can enroll in a Medigap plan. When a person turns 65 - or if they are older and new to Medicare Part B - they become eligible for Medigap open enrollment. This period starts on the first day of the month you turn 65 and lasts for 6 months. During this period, a person can buy any Medigap plan regardless of their health.

This is different than if someone is losing group coverage or retiring. When this occurs the person is eligible to exercise his or her "Guarantee Issue" right. With a Medigap guarantee issue right a person can buy a Medigap Plan A, B, C, F, K, or L that’s sold by any insurance company in their state. In addition, the insurance company cannot deny or raise the premium due to past or current health conditions. Also, the insurance company must cover any pre-existing conditions. Instead of exercising the guarantee issue right a person can opt to go through the underwriting process in order to buy a *plan G or N. Once a person is outside their open enrollment period and or guarantee issue they can change their Medigap plan but they will be subject to health underwriting by the insurance company they are applying with.

It is also important to know that monthly premiums apply, and plans may not be cancelled by the insurer for any reason other than non-payment of premiums/membership dues. Furthermore, a single Medigap plan may cover only one person. Finally, Medigap insurance is not compatible with a Medicare Advantage plan. You cannot have both a Medicare supplement and a Medicare Advantage plan at the same time. You can only have a Medigap plan if you are still on Medicare Part A and Part B and have not replaced your coverage with a Medicare Advantage Part C coverage.

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