A Medicare Supplement Insurance Plan — sometimes called Medicare Gap or a Medigap plan — is used in conjunction with Medicare. Any caregiver that accepts Medicare will take a Supplement because they only need to bill Medicare.
At that point, Medicare pays its part (generally 80% of Medicare-covered benefits) and sends the remainder of the bill to the Supplement provider to pay its part (generally 20%). It is important to note that a Supplement plan does not include Prescription Drug Coverage (Part D, PDP). Those who add fail to add a PDP first eligible, but add the plan at a later date, may be subject to paying a penalty when they do get a PDP (exceptions apply).
Medigap insurance is designed to cover the gaps in Original Medicare. Medigap insurance is offered by private insurance companies and is available in a wide range of plans. They are all required to offer a set of basic benefits, but some Medigap policies are designed to offer more. Original Medicare pays for a sizable portion of the healthcare services you need, but you are responsible for paying some portion, including copays, deductibles, and coinsurance.
Medigap insurance can help pay the out-of-pocket costs, up to set policy limits. Some policies will cover a portion of the cost of treatment if you become ill while out of the country. Medigap insurance is officially called “Medicare Supplemental Insurance.”
Am I Eligible for a Medigap Plan?
To be eligible, you must have Medicare Part A and Medicare Part B and will need to pay a monthly premium for the Medigap insurance. These policies cover an individual, not a couple, so both spouses must have a policy. Suppose you currently have a Medicare Advantage Plan (Medicare Part C). In that case, you are not eligible for Medigap insurance unless you choose to change your plan to Original Medicare, which includes Medicare Part A and Part B.
Choosing the right Medicare insurance can be challenging. Every person has unique needs, and the plan you choose matters. For assistance in buying the right Medigap policy, you can speak with a local insurance agent who can explain your options, the cost, what each policy covers, whether you are eligible for Medigap insurance, or what changes could be made to become eligible.
*Disclaimer: This page has not been reviewed or endorsed by Medicare.gov or any member of the Centers for Medicare & Medicaid Services (CMS).