Medigap
Plans

Medicare is a popular health insurance program that aims to lower the cost of health care for Americans 65 and older or who have specific disabilities and health conditions. As popular and successful as this program is, there are still many out-of-pocket costs that you have to pay. Since these costs can add up quickly, people usually choose one of two products to help reduce and cap these costs. Medicare Advantage is one option, and Medicare Supplement Insurance is the other. Medicare Supplement Insurance is the elder statesman of private Medicare insurance plans. This guide will review all the details of these plans, including the options available, eligibility requirements, and enrollment windows.

The History of Medigap Plans

Medicare Supplement plans, which are also called Medigap plans, have been around as long as the Original Medicare program – since 1966. They were specifically designed to help cover the “gaps” in Original Medicare. These are the areas where you are expected to pay out of pocket, and they include:

Part A deductible
Part A co-insurance
Part B deductible
Part B co-insurance
Part B excess charges
Emergency foreign travel coverage

Since some of these gaps are avoidable, for instance, excess charges or foreign emergency travel, insurance companies offer different types of Medigap coverage. These types are known as plans, and they are standardized by law in 47 states. The other three states have their own rules but the same principles. There are currently ten standardized Medigap plans, and they are identified by a letter: A, B, C, D, F, G, K, L, M, and N. Each one of these plans covers a slightly different mix of your out of pocket costs. This allows you a lot of choice and flexibility since one size doesn’t fit all. Even though there are ten standardized plans, three are more popular than others: Plans F, G, and N. We will review these three in detail.

Medigap Plan F

This is the most comprehensive plan available. It covers all of the gaps in Original Medicare. It will pay 100% of your out-of-pocket costs for every Medicare-covered service or procedure from “day one.” There are no deductibles. It also provides emergency coverage outside the United States. It will cover up to 80% of the cost. This plan is no longer available to new Medicare Beneficiaries. If you become eligible for Medicare after December 31, 2019, you can’t enroll in this plan. However, if you were eligible before then, you will always have the right to enroll in Plan F, even if you delayed your actual enrollment into Medicare Part B after December 31, 2019 (probably because you were still working).

Medigap Plan G

This is now the most comprehensive Medicare Supplement plan available. It is essentially the replacement for Plan F. Every Medicare-eligible person can enroll in Plan G, including those who became eligible before December 31, 2019; those beneficiaries have a choice between Plan F and G. The only gap in Medicare that Plan G doesn’t cover is the Part B deductible. You have to meet the Part B deductible when you have Plan G each year. Once you’ve done that, the plan will cover all of your out-of-pocket costs, just like Plan F. Plan G also provides coverage for emergencies outside the United States

Medigap Plan N

Plan N works differently than Plans F and G. It is a little more complicated. Still, it works more like traditional health insurance in that you will pay some co-payments with Plan N. Specifically; you will pay up to $20 when you see Part B providers and up to $50 if you visit the emergency room. If you are admitted to the hospital, the $50 co-payment is waived. The other difference is that Plan N doesn’t cover Part B excess charges, which means that this is slightly less comprehensive than Plan G. However, excess amounts are pretty rare; they’re also avoidable, so many people aren’t worried about leaving this gap open. People often choose Plan N because it usually has a lower monthly premium than Plan F or G. It is considered a good value. In addition, Plan N also covers you for emergencies when you’re traveling internationally.

When is the best time to enroll in Medigap Plans?

We’ve just seen that you usually have to be at least 65 years old to enroll in a Medigap plan. While you can theoretically enroll in one at any time at or after age 65, there is an ideal time to do so. The best time to enroll in Medicare Supplement Insurance is during your Medigap Open Enrollment period. This enrollment period lasts for six months and begins when you are BOTH:

Enrolled in Part B, and
65 years old or older

This means that your Open Enrollment Period can’t start before you turn 65, even if you enter Medicare early due to disability or illness. It also means that it can’t begin until you’re in Part B, even if you delay taking Part B for many years because you worked past age 65.

You want to enroll during this six-month window because you’ll be able to choose any Medigap Plan available in your state and get coverage on a Guaranteed Issue basis. This means that you can’t be turned down or charged a higher premium because of preexisting conditions. This is a crucial benefit because this is the only time you are guaranteed to get this coverage.

If you pass on this option and then decide you want Medigap coverage later after your Open Enrollment Period has passed, you can still apply for it, but your acceptance is not guaranteed. As a part of your application, you’ll have to answer health questions. The insurance company will do a health history investigation. You may be declined or charged a higher premium because of your health status. For this reason, it is best to get Medicare Supplement Insurance coverage when you’re first eligible for it during your Open Enrollment Period. It’s important to note that this is the case even if you already have Medigap coverage. If you want to switch plans, say from one insurance company to another, you’ll still be subject to these health questions. You can still be declined or charged a higher premium, so you should choose your first Medigap plan with an eye to keeping it forever since there’s no guarantee you’ll be able to switch later.

There are some limited cases where you can enroll in a Medigap plan on a Guaranteed Issue basis outside of your Open Enrollment Period. However, these cases require changes in your life circumstances to be eligible. For instance, you can gain a Guaranteed Issue period if you are enrolled in a Medicare Advantage plan and move your primary residence to a new county or state where you have new Medicare Advantage options available. This move triggers a Special Enrollment Period with Medigap Guaranteed Issue rights.

Other, less common reasons to qualify for Medigap Guaranteed Issue periods include:

When your Medicare Advantage plan loses its contract with CMS or decides not to renew it
When your Medigap plan goes bankrupt
When you’ve been on your first Medicare Advantage for less than 12 months, this is called a Trial Right; a few other conditions need to be satisfied to take advantage of this one.

As you can see, these situations are often outside of your control, except moving your residence. Not everyone is willing to move to a new county or state, so you shouldn’t assume that you’ll qualify for a special Guaranteed Issue Period after your Open Enrollment Period. That’s why it’s best to enroll in Medigap during your initial Open Enrollment Period.
Finding the right Medigap plan can be intimidating, so it can be helpful to work with an independent insurance agent. An independent agent can not only help you compare quotes for plans in your area but can also help you determine whether you’re eligible for a Special Enrollment Period. They can also help you enroll in the plan of your choice. If you’d like some independent help with Medigap plans, contact San Antonio Medicare Advisors and request a free consultation today.

Medigap Plans and Prescription Drug Coverage

Modern Medicare Supplement Insurance plans, those available since 2006, do not provide coverage for prescription medications. Instead, if you choose Medigap coverage, you’ll also need to enroll in a standalone Part D prescription drug plan. This is a different plan, also offered by private insurance companies, that helps pay for the cost of your medications. You will want to enroll in one as soon as you become eligible for Medicare because you’ll be subject to a late enrollment penalty if you delay your enrollment. This is a crucial difference between Medigap and Medicare Advantage; most Medicare Advantage plans come with Part D drug coverage built-in.

Eligibility for Medigap Plans

To be eligible for Medicare Supplement Insurance, you must be enrolled in Part A and B of Original Medicare. You must continue to pay your Part B premium. Original Medicare remains your primary insurance; Medigap is a secondary, or supplemental, coverage, so it’s essential to make sure your primary coverage stays in force.
It’s essential to keep in mind that most states require you to be at least age 65 to enroll in Medicare Supplement Insurance. Most states allow insurance companies to exclude people younger than 65. However, some states will enable you to get this coverage earlier.

Medigap Plans