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What is Medigap insurance? Get the real facts and learn the truth behind three common myths about this misunderstood Medicare supplement.

By Andrea Bonner
Updated September 30, 2020

Key Takeaways:

  • Medigap coverage helps you pay for the out-of-pocket costs of Medicare.

  • The best time to sign up for a Medigap plan is when you're first eligible for Medicare.

  • Medigap plans are offered by private insurance companies. The coverage is standardized, but the prices aren't.

  • There are 10 different Medigap plans you can choose from. An insurance agent who specializes in Medigap can help you find your best option.

If you are a senior, you've likely heard of Medigap insurance. But what, exactly, is Medigap? Is it the same as a Medicare Supplement? And is Medigap insurance worth the cost?

Find out the facts behind Medigap so that come enrollment time, you'll be able to confidently select the coverage you want at a price you can afford.

Myth #1: Medigap Insurance Gives You Extra Coverage

Medigap plans — also called Medicare Supplement — are insurance plans offered by private insurance companies that help you cover the out-of-pocket costs of Medicare. Those costs include deductibles, copayments, and coinsurance.

But Medigap doesn't cover anything that's not already included in Original Medicare (Part A and Part B). In fact, you must already be enrolled in Original Medicare if you want to buy a Medigap policy. With Medigap insurance, you're not getting "extra coverage." You're getting help with the costs of your Original Medicare coverage.

If you do want coverage for services that Medicare Parts A and B don't cover, you must purchase that coverage separately. There are multiple ways you could do this:

  • If you want prescription drug coverage, you'd have to enroll in Medicare Part D in addition to your Medigap plan.

  • You could opt for a Medicare Advantage plan — a plan offered by a private insurance company that replaces your Part A and B coverage and Medigap plan, and adds extra benefits like prescription drugs, vision, or hearing.

Myth #2: You Can Choose Any Medigap Plan

There are 10 different Medigap plans (A, B, C, D, F, G, K, L, M, and N) each with different combinations of coverage and costs. But because Medigap plans are offered by private insurance companies, not all plans are available in all geographic locations.

It's more accurate to say that you can choose any Medigap plan that's offered in your area. Plus, insurance companies can choose which Medigap plans they offer — they don't have to offer all 10. However, if a company offers Medigap plans at all, they are required by law to offer at least Plan A.

There are a few other limitations on the type of Medigap plan you can choose:

  • If you are new to Medicare beginning in 2020, you cannot choose Medigap Plans C or F. Why? These plans cover the Medicare Part B deductible. In 2015, Congress passed a law that Medigap plans are no longer allowed to cover that deductible.

  • If you don't sign up for a Medigap plan when you're first eligible (during your Initial Enrollment Period), you may be subject to medical underwriting. This means that an insurance company can review your medical history. Based on that, they can refuse to offer you a plan, or offer you a plan at a higher cost

Tip: Your Initial Enrollment Period begins three months before the month you turn 65, includes your birthday month and ends three months after your birthday month.

  • If you are already enrolled in a Medigap plan, but move to an area where that plan isn't available, you'll have to choose a different plan.

find a Medicare plan that fits your lifestyle

Myth #3: You Should Just Choose the Most Popular Medigap Plan

For busy seniors, it can be tempting to avoid the research and simply opt for the Medigap plan you've heard the most about, or the plans your friends or family members have. Just because a plan is popular doesn't mean that it's the best Medigap plan for you in terms of coverage or cost. If you find it daunting to explore all of the options, an insurance agent specializing in Medigap can make the process easier.

According to the nonprofit AHIP's (American's Health Insurance Plans) "State of Medigap 2019 report," the most popular Medigap plans across the U.S. according to enrollment are:

  • Plan F: 55% (no longer available)

  • Plan G: 13%

  • Plan N: 10%

  • Plan C: 6% (no longer available)

In 2020, you can choose from eight different Medigap plans (remember, Plans C and F are no longer available to new enrollees). In most states, the coverage of each plan is standardized. For example, Insurer #1 offers the exact same plan A as Insurer #2, #3, #4, and so on. The exceptions are Massachusetts, Minnesota, and Wisconsin.

Since Medigap plans are offered by private insurance companies, monthly premium pricing varies. The monthly premium ranges listed below are what a senior in Memphis, Tennessee could expect. The monthly premium ranges are in addition to the standard Part B premium ($144.60) and Part B deductible ($198):

Plan

Premium Range

Skilled Nursing Facility Coverage

Part A Deductible (What you pay)

Part B Coinsurance (What you pay)

Foreign Travel

A

$68-$172

X

$1,408

$0

X

B

$91-$214

X

$0

$0

X

D

$95-$263

$0

$0

G

$87-$215

$0

$0

G (high deductible)

$22-$62

$0 after $2,340 deductible

K

$44-$114

$704

10% of costs until $5,880, then $0

X

L

$82-$160

$352

5% of costs until $2,940, then $0

X

M

$86-$152

$704

$0

N

$73-$371

$0

$0, plus $20 for some office visits and $50 for some emergency services


So, what is Medigap? The answer is simple — an insurance plan that helps you cover the out-of-pocket costs of Medicare. It's the details that are tricky.

But if you keep in mind the basics — like your budget and your health conditions — you'll be able to determine whether a Medigap plan is right for you, and if so, which one.

Andrea Bonner is a healthcare writer with more than 10 years of experience covering senior health. She is from the Raleigh-Durham area in North Carolina.