What is Medicare Supplement Insurance?

A Medicare Supplement Insurance (Medigap) policy, sold by private companies, can help pay some of the health care costs that original Medicare doesn’t cover, like copayments, coinsurance, and deductibles.  These extra costs can run into a lot of extra money when you use your medical insurance.

A Medigap policy is different from a Medicare Advantage Plan.  Those plans are ways to get Medicare benefits, while a Medigap policy only supplements your Original Medicare benefits.  The Supplements are a way to make sure you do not pay little or nothing as far as deductibles.

8 things to know about Medigap policies

  1. You must have Medicare Part A and Part B.
  2. If you have a Medicare Advantage Plan, you can apply for a Medigap policy, but make sure you can leave the Medicare Advantage Plan before your Medigap policy begins.
  3. You pay the private insurance company a monthly premium for your Medigap policy in addition to the monthly Part B premium that you pay to Medicare.
  4. A Medigap policy only covers one person. If you and your spouse both want Medigap coverage, you’ll each have to buy separate policies.
  5. You can buy a Medigap policy from any insurance company that’s licensed in your state to sell one.
  6. Any standardized Medigap policy is guaranteed renewable even if you have health problems. This means the insurance company can’t cancel your Medigap policy as long as you pay the premium.
  7. Some Medigap policies sold in the past cover prescription drugs, but Medigap 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 Part D plan.
  8. It’s illegal for anyone to sell you a Medigap policy if you have a Medicare Medical Savings Plan.

Insurance plans that aren’t Medigap

Some types of insurance aren’t Medigap plans, they include:

  • Medicare Advantage Plans (like an HMO, PPO, or Private Fee-for-Service Plan)
  • Medicare Prescription Drug Plans
  • Medicaid
  • Employer or union plans, including the Federal Employees Health Benefits Program (FEHBP)
  • TRICARE
  • Veterans’ benefits
  • Long-term care insurance policies
  • Indian Health Service, Tribal, and Urban Indian Health plans

Dropping your entire Medigap policy (not just the drug coverage)

If you decide to drop your entire Medigap policy, you need to be careful about the timing. For example, you may want a completely different Medigap policy—not just your old Medigap policy without the prescription drug coverage. Or you might decide to switch to a Medicare Advantage Plan that offers prescription drug coverage.

You have to pay a late enrollment penalty  when you join a new Medicare drug plan if:

  • You drop your entire Medigap policy and the drug coverage wasn’t creditable prescription drug coverage, or
  • You go 63 days or more in a row before your new Medicare drug coverage begin.

Medicare Supplement plans are usually your best option for coverage

Medicare supplement plans are usually the best option for coverage.  Plans like F or G provide coverage with no co-pays.  It is best to meet with an agent who gives medicare supplement advice and choose the best option for you.  You can call 205-417-5027 and set up an appointment for Carla Fowler to come to your home to review medicare options.

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