Medicare Supplement (Medigap)

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What it is

Medicare Supplement insurance, also called Medigap, is sold by private insurance companies. It works alongside Original Medicare (Part A and Part B) and helps pay some of the costs that Original Medicare leaves to you, such as deductibles, copayments and coinsurance.

How it works

• You need to have both Medicare Part A and Part B to buy a Medigap policy.
• A Medigap policy covers one person. Spouses each need their own policy.
• You pay a monthly premium to the insurance company for the policy, in addition to your Part B premium.
• In most states, Medigap policies are standardized and identified by letters. Policies with the same letter offer the same basic benefits no matter which company sells them. Massachusetts, Minnesota and Wisconsin standardize their policies in a different way.
• Medigap policies sold today do not include prescription drug coverage. People who want drug coverage usually add a separate Medicare Part D plan.
• Medigap policies are for people who have Original Medicare. They do not work with Medicare Advantage plans.

When you can buy a policy

Your Medigap Open Enrollment Period lasts six months. It starts the first month you have Medicare Part B and are 65 or older. During this period an insurance company cannot use your health history to refuse to sell you a policy or to charge you more for it.

After this period ends, insurance companies in many states can use medical underwriting, which means you may be turned down or charged more. The rules vary by state.

Questions to ask

• Which Medigap plan letters are sold in my state?
• What does each plan letter pay for, and what does it leave to me?
• How does the insurance company set its premiums, and how can they change over time?
• Am I still in my Medigap Open Enrollment Period?