Key Takeaways

• Medigap plans help cover out-of-pocket costs in Original Medicare, but they do not cover everything, including prescription drugs or dental care.

• Enrollment timing is critical since the best rates and guaranteed coverage are only available during your Medigap Open Enrollment Period.

What Are Medigap Plans and Why Do They Matter?

If you’re enrolled in Medicare, you’ve probably noticed that it doesn’t cover everything. That’s where Medigap plans come in. These supplemental insurance plans are designed to help you manage out-of-pocket costs like copayments, coinsurance, and deductibles. Medigap policies only work with Original Medicare (Part A and Part B), meaning they aren’t compatible with Medicare Advantage plans.

Understanding how these plans work is essential to avoid unexpected costs and coverage gaps. Here’s what you need to know.

1. Medigap Helps Cover Your Out-of-Pocket Costs

Original Medicare covers hospital and medical services, but you’re still responsible for certain expenses. Medigap policies step in to pay for some or all of these costs, depending on the plan you choose. Some of the common expenses Medigap can help with include:

• Medicare Part A coinsurance and hospital costs after you use up your Medicare-covered days

• Medicare Part B coinsurance or copayments for doctor visits and outpatient care

• Blood transfusions, covering the first three pints

• Skilled nursing facility coinsurance if you need extended care

• Medicare Part A deductible, which applies to hospital stays

2. Medigap Plans Don’t Cover Everything

While these plans reduce many out-of-pocket costs, they don’t cover every possible expense. You’ll still need to pay for services that fall outside of their coverage, such as:

• Prescription drugs (you’ll need a separate Medicare Part D plan for that)

• Dental, vision, and hearing care, which are not covered under Medigap

• Long-term care services, like nursing home stays beyond Medicare limits

• Private-duty nursing, which Medicare and Medigap do not include

3. You Have a Limited Window to Get the Best Medigap Plan

The best time to buy a Medigap policy is during your Medigap Open Enrollment Period. This period lasts for six months and begins the month you are both 65 or older and enrolled in Medicare Part B. During this time:

• You can buy any Medigap plan available in your state.

• You cannot be denied coverage or charged higher premiums based on health conditions.

• Once this window closes, insurers can use medical underwriting, meaning they may deny coverage or charge you more based on pre-existing conditions.

4. Medigap Plans Are Standardized

No matter where you live, Medigap plans are standardized across most states. This means that Plan G in one state offers the same benefits as Plan G in another. However, premiums vary depending on the insurance company, your location, and your age.

There are 10 standardized Medigap plans labeled A through N, each offering different levels of coverage. Some plans cover more out-of-pocket costs, while others offer lower premiums with fewer benefits.

5. Medigap Policies Are Private Insurance, But They Work With Medicare

Even though Medigap policies are sold by private insurance companies, they only supplement Medicare and do not replace it. You must stay enrolled in Medicare Part A and Part B to use a Medigap policy.

It’s important to remember:

• Medigap plans do not cover Medicare Advantage (Part C) costs.

• If you switch from Medigap to a Medicare Advantage plan, you may not be able to get your Medigap policy back later.

• Premiums are paid separately from your Medicare Part B premium.

6. Medigap Premiums Can Increase Over Time

While Medigap plans offer predictable costs, your monthly premiums may increase as you age. Insurance companies use different pricing methods to set rates:

• Community-rated: Everyone pays the same premium, regardless of age.

• Issue-age-rated: Premiums are based on your age when you buy the policy but won’t increase due to aging.

• Attained-age-rated: Premiums start lower but increase as you age, making them more expensive over time.

Knowing how your policy is priced can help you plan for future costs.

7. Not All States Follow the Same Medigap Rules

While most states follow federal Medigap rules, some states have additional protections. For example:

• Some states allow guaranteed issue rights beyond the standard Open Enrollment Period, meaning you can buy a policy without health underwriting at specific times.

• Certain states have unique Medigap plans, such as Massachusetts, Minnesota, and Wisconsin, which standardize Medigap differently from other states.

• Some states offer Medigap to those under 65, but availability and pricing vary.

If you move to a different state, you may need to review your Medigap options to ensure continued coverage.

What You Should Keep in Mind Moving Forward

Choosing a Medigap plan can help protect you from high out-of-pocket costs, but it’s important to make an informed decision. Enrolling at the right time, understanding coverage limits, and being aware of premium pricing methods can all impact your long-term healthcare expenses.

If you have questions about Medigap options or need help choosing a plan that fits your needs, get in touch with a licensed agent listed on this website for professional advice.​​​​​​​