Medicare Supplement Insurance, also known as Medigap that helps fill “gaps” in Original Medicare and is sold by private companies. Original Medicare pays for much, but not all, of the cost for covered health care services and supplies. A Medicare Supplement Insurance (Medigap) policy can help pay some of the remaining health care costs, like (Medicare.gov):
A. How does the coverage work:
- Medicare will pay its share of the Medicare-approved amount for covered health care costs.
- Then, your Medigap policy pays its share.
- In most Medicare Supplement policies, the insurance company will get your Part B claim information directly from Medicare. Then, they pay the doctor directly. Some insurance companies also provide this service for Part A claims (Medicare.gov).
B. Medigap policies are standardized
Every Medigap policy must follow federal and state laws designed to protect you, and it must be clearly identified as “Medicare Supplement Insurance.” Insurance companies can sell you only a “standardized” policy identified in most states by letters.
All policies offer the same basic benefits but some offer additional benefits, so you can choose which one meets your needs. In Massachusetts, Minnesota, and Wisconsin, Medigap policies are standardized in a different way.
Each insurance company decides which Medigap policies it wants to sell, although state laws might affect which ones they offer. Insurance companies that sell Medigap policies (Medicare.gov):
- Don’t have to offer every Medigap plan
A Medicare Supplement plan is not a Medicare Advantage Plan. A Medicare Advantage plan works differently.
You must purchase a Prescription Drug Plan separately.
When selecting a Medicare Supplement Plans (Medigap) premiums are based several parameters:
- Attained Age Pricing – Premiums are low for younger buyers but go up as you get older and can eventually become the most expensive.
- Issue Age Pricing –Premiums are low for younger buyers and won’t change as you get older.
- Community Pricing –Premiums are the same no matter how old you are. Premiums may go up because of inflation and other factors (Medicare.gov).
Medicare.gov (2020). What’s Medicare Supplement Insurance (Medigap)
Retrieved from https://www.medicare.gov/supplements-other-insurance/whats-medicare-supplement-insurance-medigap
Medicare.gov (2020). How to compare Medigap policies
Retrieved from https://www.medicare.gov/supplements-other-insurance/how-to-compare-medigap-policies