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What is Medigap Insurance?

by: admin

What is Medigap insurance? The definition of Medigap is often stated as an insurance plan that fills the “gaps” in basic benefits of Original Medicare or the Medicare Part A and Part B. It is also known as Medicare Supplement plans or Medicare Supplemental insurance plans. It is an additional health insurance that you purchase from a private insurance company.

If you are someone who frequently needs medical attention, you know that you have a share of expenses from Original Medicare in the form of deductibles, coinsurance, and copayments. With a Medicare Supplement insurance, you may be able to save money because it will pay all or part of the out-of-pocket costs. Its main purpose is to pay for the costs that Medicare left for you to shoulder.

How do Medicare Supplement plans work?

Here’s how Medicare Supplement works with your Original Medicare:

Doctor – The doctor provides services and bills Medicare.

Medicare – Medicare pays 80% of the Medicare-approved medical services. The excess will be forwarded to Medigap.

Medigap – Receives the bill from Medicare then pays the bill according to the coverage of the Medigap plan.

How does Medicare supplements pay for Medicare Part B bills?

Generally, Medigap insurance company are the ones who will get your Medicare Part B claim information directly from Medicare. Then they will pay the doctor directly of the amount due.

If your Medicare insurance company doesn’t have this service, you should:

Ask your doctor if they participate in Medicare (participating doctors accept assignment for all Medicare-covered services).

If your doctors participate in Medicare – Medigap company will pay the doctor directly if you request.

If your doctor does not participate but accepts Medicare – You may pay the coinsurance at the time of service, then the Medigap insurance company will pay you directly according to policy limits.

get medigap quotes to minimize deductibles copayments and coinsurance

The Ten Standardized Plans

Medicare Supplements offer ten standardized plans labeled in letters. There is Medigap Plan A, Plan B, Plan C, F, G, K, L, M, and N. Although the names are similar, Medicare Part A, Part B, and Part C are different from Medigap Plan A, Plan B, and Plan C. Since each plan are standardized, the same letter Medigap policies provide the same set of benefits across different companies. Insurance companies selling Medigap must offer at least Medigap Plan A and are not required to sell all the plans.

Each of the Medicare Supplements offers different levels of benefits or percentage of coverage. Some plans offer additional benefits aside from the basic ones. Hence, comparing Medicare Supplement plans are essential to help you find the right one for you.

How much is the cost of Medigap Insurance?

YoYou have to pay a monthly premium when you buy a Medigap policy. This premium is different from the Medicare Part B premium that you pay to Medicare.

Private insurance companies have the power to demand different premiums. Insurance companies can charge their policy premium in three different ways:

  • Community-rated – Premiums of Medigap plans with this system are charged the same regardless of the age.
  • Issue-Age-Rated – Premiums are based on the age when you first enroll in Medigap.
  • Attained-age-rated – Plans with this system also base their premium on the age when you first bought a policy but will increase as you get older.

Since the main difference between the same letter plan is the monthly premium, it is best to shop around different insurance companies to find the best value for your money.

You can learn more about Medicare Supplement costs here.

Who is eligible to apply in Medicare Supplemental Insurance plans?

To become eligible to enroll in a Medigap plan, you should:

• Have both Medicare Part A and Part B (you need Original Medicare because Medigap plans are intended to work together with Medicare)

• Age 65 or above (insurance companies are allowed to sell Medicare supplement to those Medicare beneficiaries under age 65, but they are not required)

When can I enroll or buy a Medigap policy?

You can enroll in a Medigap insurance once you become eligible, but the best time to apply is during your Medigap Open Enrollment Period. It is a six-month period from the time you turn 65 and have Medicare part B.

Buying a Medigap Plan during this period is very crucial especially if you have pre existing conditions. That is because it is one of the limited time when you can obtain Guarantee Issue Rights.

What type of doctors can I visit with Medigap?

You can see or visit any doctor as long as he or she accepts Medicare.  There is no network of physicians that you should worry except if you have Medicare SELECT plan.

Read our post about doctors who accept Medigap.

What do Medicare supplemental insurance cover?

The core or basic benefits of Medicare Supplements are:

 Medicare Part A coinsurance and coverage for hospital services

• Medicare Part B coinsurance or copayment

• Blood transfusions (first three pints)

• Hospice care coinsurance or copayment

1. Medicare Part A Coinsurance and Hospital Costs

Medicare supplement will cover your daily coinsurance from day 61 up to an additional 365 days after Medicare benefits are used up.

2. Medicare Part A Hospice care copayment or coinsurance

Medigap will cover all or part of coinsurance in Hospice care and also the 5% copayment for the inpatient respite care.

3. Medicare Part B coinsurance or copayment

Medigap will cover all or part of Medicare Part B for an unlimited amount of Medicare-approved outpatient care

4. Three Pints of Blood

Medigap will pay for your initial blood supply when you need to undergo a blood transfusion. Without a plan, it would cost you about a whopping $1200 for the three pints of blood.

Also, fortunately, Original Medicare will take over paying for the rest of the blood you might need.

Notes to remember:

The most limited Medicare supplement plan is the Plan A. It has all the core or basic Medigap coverage and is available in all states.

Not all of the plans provide 100% coverage of the basic benefits. Plan K covers 50% and Plan L covers only 75%  of the core benefits until you reach a certain separate deductible.

Every insurance companies should make all the core plans available to be able to sell Medicare supplement plans.

Some plans have extra benefits or additional coverage aside from the ones enumerated above.

What does Medigap Plan Cover list infographic

What does Medicare Supplement Plan cover? (Click to enlarge)

Medigap Plan’s other benefits

Some Medigap plans offer additional benefits aside from the core benefits. Like the core, plans that have these additional features provide them at different levels or percentage. These are the other and maybe optional benefits of Medigap:

1. Skilled nursing facility care coinsurance

Certain types of Medigap plans will pay all or part of your Skilled Nursing facility stay. These facilities provide intensive physical and behavioral rehabilitation after you had a severe medical condition.

Who will benefit from this feature?

• Those who are already healthy to stay in a hospital but are still weak to return to normal day to day life at home.

• Those who still need to recover from a joint replacement surgery, or any other medical conditions that require time for recovery and rehabilitation.

• And other issues such as difficulty to go to the hospital without needing an intermediate assistance, still looking for caregivers, and those who are in need of oxygen therapy.

2. Part A deductible

There are types of Medigap plans that won’t let you pay out-of-pocket such as Part A deductible which is worth $1340.

Who will benefit from this feature?

• Those who got admitted or in need of hospital care but did not exceed or exceeded the Part A deductible of $1340.

3. Part B deductible

There are types of Medigap plans that will pay for Part B deductible, which is $183 for the year 2018.

Who will benefit from this?

• Those who want to save $183 which can be used to cover other bills instead.

4. Part B excess charge

There are doctors who do not use the Medicare-approved prices but participates in Medicare. They are allowed to charge you a 15% more than the approved rate.

Who will benefit from this?

• Those who want the widest options of doctors who also participate in Medicare.

• If your doctor doesn’t accept Medicare assignments.

5. Foreign emergency care

Medicare alone, don’t provide coverage when you travel outside the US. Medicare supplements, on the other hand, can travel with you and pay up to 80% of your emergency medical costs in other countries.

Who will benefit from this?

• Those who travel to other countries and those who don’t want to get a separate travel insurance.

You can see other types of Medigap plan that provide foreign medical coverage in our Medicare supplement comparison table.

What is not covered by Medicare Supplements?

Medigap Supplements don’t cover long term care (like custodial care in nursing homes), private-duty nursing, dental care, vision care, eyeglasses, hearing aids. Medigap don’t have prescription drug coverage.

What Medigap does not cover? (Click to enlarge)

Medigap is not…

These coverage are different from Medicare supplement policies:

• Medicare Advantage Plans (Part C), HMO or PPO

• Medicaid

• Medicare Prescription Drug Plans (Medicare Part D)


• Long term care insurance policies

• Employer or union plans

• Federal Employees Health Benefits program

• Qualified health plans sold in Health Insurance Marketplace

• Indian Health Service, Tribal and Urban Health Plans

Can I switch to another Medicare Supplement plan?

Yes, you can anytime! But you may have to answer medical questions or underwriting process if you do it outside your Medigap open enrollment period.

Learn more about switching to another Medicare supplement here.

Can I switch from Medicare Advantage plan to Medicare Supplement plan?

Yes, you can switch from Medicare Advantage plan to Medigap plan. However, the circumstances to which you can enjoy a guaranteed issue are limited. If you opted to switch to Medigap insurance, you may have to answer some medical questions or undergo a medical underwriting. Acceptance not guaranteed or if you did get accepted, you will be charged with a higher monthly premium.

What is Medigap in three “Waiver States”?

In  Minnesota, Massachusetts, and Wisconsin, Medicare supplement plans are standardized differently than most states.

See how the plans differ in the said three states, click the name of the state below.


If you still have questions and are in need of clarifications, we at FreeMedsuppQuotes are happy to help you.  You can explore other important topics of Medigap in this website or let one of us contact you to schedule a free discussion about Medicare supplement plans for your convenience.

Request a personalized quotes and find out which Medigap insurance provider offer the best rate trend history, ratings and pricing. Get your Medicare Supplement quotes here.

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