What You Should
Know About
Medicare Supplement Insurance Plans

Medicare Supplement Insurance Plans are also known as Medigap policies.

What You Need to Know about Medicare Supplement Insurance Plans

What do Medigap policies cover?

Medicare doesn’t pay for any of the costs for you to purchase a Medicare Supplement insurance plan. You have to pay the premiums to the insurance company for a Medigap policy.

In most Medigap policies, the Medicare Supplement insurance company will get your Original Part B claim information directly from Medicare and will pay your doctor directly. Some Medigap insurance companies also provide this service for Original Medicare Part A claims.

If your Medicare Supplement insurance company doesn’t provide this service, ask your doctors if they “participate” in Medicare, or if they “accept assignment” for all Medicare beneficiaries. If your doctor accepts assignment or participates in Medicare, the Medigap insurance company is required to pay your doctor directly when you request.

 

What are the costs of Medigap policies?

When it comes to the cost of a Medicare Supplement insurance plan, insurance companies may charge different monthly premiums for the same exact policy. As you shop for a policy, be sure you’re comparing the same policy. For example, compare Plan G from one company with Plan G from another company.

Each insurance company determines how it will set the price or premium of the Medigap policy. It’s important to ask how an insurance company prices its policies because how they set the price impacts how much you pay now and in the future.

Medicare Supplement insurance policies can be priced or what is known as “rated” in three main ways:

Community (also known as no-age rated)

  • How it’s priced:
    Generally, everyone is charged the same monthly premium for the Medigap policy, regardless of age.
  • What this pricing may mean for you:
    Your premium may go up due to inflation but not because of your age.

Issue-Age (also known as entry age-rated)

  • How it’s priced:
    The Premiums are based on your age when you are issued the Medicare policy.
  • What this pricing may mean for you:
    Your premium is lower the younger you are when you buy it and won’t change as you get older. Premiums may go up due to inflation and other factors, but not because of your age.

Attained Age

  • How it’s priced:
    The premium is based on your age, so your premium will go up as you get older.
  • What this pricing may mean for you:
    Premiums are low for younger buyers, but go up as they age. This pricing is initially the least expensive but can become the most expensive

 

How do I compare Medigap policies?

All Medigap policies follow federal and state laws that are designed to protect you and must be clearly identified as “Medicare Supplement Insurance.” Insurance companies can only sell you a “standard” policy identified in most states by letters. (Massachusetts, Minnesota, and Wisconsin Medigap policies are standardized differently.)

All policies share the same basic benefits, but some offer additional benefits, so you can choose which one meets your needs. Each insurance company is different in that it decides which Medigap policies it wants to sell; however, state laws may also affect which ones they offer.

Insurance companies that sell Medigap policies:

  • Don’t have to offer every Medigap plan
  • Must offer Medigap Plan A if they offer any Medigap policy
  • Must also offer Plan C or Plan F if they offer any plan.

The chart below shows basic information on the different benefits Medigap policies cover.

As of Jan.1, 2020, Medigap plans sold to new people with Medicare aren’t allowed to cover the Part B deductible. Therefore, Plan C and F are not available to people new to medicare starting on Jan. 1, 2020. If you already have either of these 2 plans (or the higher deductible version of Plan F) or are covered by one of these plans before Jan. 1, 2020, you’ll be able to keep your plan. If you were eligible for Medicare before Jan. 1, 2020, but not enrolled, you may be eligible to buy one of these plans.

 

How do I Switch Medigap policies?

There are 4 reasons why you may want to switch Medigap policies.

    1. You’re paying for benefits you don’t need
    2. You need more benefits
    3. You want to change insurance companies
    4. You want a policy that costs less

In most cases, under federal law, you won’t have a right to switch Medigap policies unless one of these applies:

  • You’re eligible under a specific circumstance or guaranteed issue rights.
  • You’re within your 6-month Medigap open enrollment period

To switch, call your new insurance company and apply for your new Medigap policy. If your application is accepted, call your current insurance company and ask for your coverage of the old policy to end. They will walk you through how to submit a request to end coverage.

Medigap free-look period

When you switch, you have 30 days to decide if you’d like to keep the new Medigap policy, in what is called your “free look period” It starts when you get your new Medigap policy and you’ll need to pay both premiums for one month. Don’t cancel your first  Medigap policy until you’ve decided to keep the second Medigap policy. On the Application for the new policy, you’ll have to promise that you’ll cancel your first policy.

When can I buy Medigap policies?

When you’re first eligible

Your 6-month Medigap Open Enrollment Period is your best time to buy a Medigap policy. Generally, you will get better prices and more choices among policies. You can also buy any Medigap policy sold in your state, regardless if you have health problems. Your Open Enrollment Period automatically starts the first month you have Medicare Part B (Medical Insurance), and you’re 65 or older. It cannot be changed or repeated. You may not be able to buy a Medigap policy after this enrollment period. If you are able to buy one, it may cost more due to past or present health problems.

During Open Enrollment

Generally, insurance companies are allowed to use medical underwriting to decide whether to accept your application and how much to charge you. However, regardless of your health problems, during your Medigap open enrollment period, you can buy any policy the company sells for the same price as people with good health.

Depending on your situation, buying a Medigap policy differs.
    • Those 65 or older– Your Medigap Open Enrollment period starts when you enroll in Part B and cannot be changed or repeated. Most of the time, it makes sense to enroll in Part B when you’re first eligible; otherwise, you may have to pay a Part B late enrollment penalty.
    • Turning 65– The best time to buy a Medigap policy is the 6-month period that starts the first day of the month you turn 65 and enrolled in Part B. After this enrollment period, your option to buy a Medigap policy may be limited and may cost you more.
    • Those Under 65– Federal law doesn’t require insurance companies to sell Medigap policies to those under 65. You may not be able to buy a Medigap policy until you turn 65; however, some states require Medigap insurance companies to sell you a Medigap policy, even if you’re under 65. But if you are able to buy one, it may cost you more.
    • You have group health coverage through an employer or union– Depending on whether you or your spouse are currently working and you have group health insurance through an employer or union, you may want to wait to enroll in Part B. (Employer plans often have similar coverage to Medigap.)When your group health coverage ends, you’ll get a chance to enroll in Part B without the late enrollment penalty. Your Medigap open enrollment period starts when you enroll in Part B; if you enrolled in part B while you still were under the employer coverage, your Medigap open enrollment period would start. Unless you bought a Medigap policy before you needed it, it’s possible to miss your enrollment period entirely.
Outside Open Enrollment

Unless you’re eligible due to one of the situations below, there’s no guarantee that an insurance company will sell you a Medigap policy if you don’t meet the medical underwriting requirements outside your open enrollment period.

In some states, you may be able to buy another type of Medigap policy called Medicare SELECT. If you buy a Medicare SELECT policy, you have rights to change your mind within 12 months and switch to a standard Medigap policy.

Situations for eligibility outside open enrollment.

    • You’re under 65 and are eligible for Medicare because of a disability or End-Stage Renal Disease (ESRD) – If you have ESRD, you may not be able to choose your desired, or any, Medigap policy until you turn 65. Federal law doesn’t require insurance companies to sell Medigap policies to those under 65. States that require at least one kind of Medigap policy to be offered to people with Medicare and under 65 are: Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, New Hampshire, New Jersey, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Vermont, and Wisconsin.
    • You have health problems – During the Medigap open enrollment period, an insurance company can’t use medical underwriting. Meaning an insurance company cannot do any of these things based on your health problems.
      • Refuse to sell you a Medigap policy it offers.
      • Make you wait for coverage to start (except as explained below).
      • Charge you more for a Medigap policy.
    • You have a pre-existing condition – if you have a pre-existing condition, the insurance company may make you wait for coverage.
      In some cases, the insurance company can refuse to cover your out-of-pocket costs up to 6 months for pre-existing health problems. After this “pre-existing condition waiting period,” the Medigap policy will cover the pre-existing condition. Coverage for a pre-existing condition can be excluded if it was treated or diagnosed within 6 months of when coverage of the Medigap policy starts. After 6 months, Medigap will cover the excluded conditions.
      Even if your Medigap policy won’t cover your out-of-pocket costs, when you get Medicare-covered services, Original Medicare will still cover the condition, but you’re responsible for the coinsurance or copayment.
    • You have a pre-existing condition and are replacing “creditable coverage” –  If you buy a Medigap policy during your Medigap open enrollment period to replace “creditable coverage (Medigap),” it’s possible to avoid or shorten your waiting period for a preexisting condition.
      If you have had 6 months or more of continuous prior creditable coverage, the Medigap insurance company cannot make you wait for health care coverages that count as creditable coverage, but they’ll only count if the break in coverage doesn’t exceed 63 days.
    • You have other insurance – If you have group health insurance through an employer or union, your Medigap open enrollment period starts when you enroll for Part B.
    • You have a guaranteed issue right – If you have a Medigap policy when you have a guaranteed issue right (or “Medigap protections”), the insurance company cannot use a pre-existing condition waiting period.

Medigap & Medicare Advantage Plans

Medigap policies can’t work with Medicare Advantage plans. If you have a Medicare Supplement insurance plan, or Medigap policy, and join a Medicare Advantage Plan (Part C), you may want to drop your Medigap policy. Your Medicare Supplement insurance plan can’t be used to pay your Medicare Advantage copayments, deductibles, or premiums.

If you decide to cancel your Medicare Supplement insurance plan, contact Medicare Pathways Customer Service.

If you leave the Medicare Advantage plan, you might not be able to get the same, or in some cases, any Medigap policy back unless you have a “trial right.”

It’s also important to note that if you have a Medicare Advantage plan, it’s illegal for anyone to sell you a Medigap policy unless you’re switching back to Original Medicare Part A & Part B. (If this happens to you, please contact us immediately and we will provide you with the information you need to contact your State Insurance Department.)

If you want to switch to Original Medicare Part A & Part B and purchase a Medicare Supplement insurance plan, contact your Medicare Pathways agent, and we will help you with your Medicare Advantage plan to see if you’re able to disenroll.

If you join a Medicare Advantage plan for the first time, and you aren’t happy with the plan, you will have special rights under federal law to purchase a Medigap policy. You have these rights if you return to Original Medicare Part A & Part B within 12-months of joining.

If you had a Medigap policy before you joined, you may be able to get the same policy back if the company still sells it. If it is not available, you can purchase another Medigap policy that is available in your area.

If you don’t drop your Medicare Advantage Plan and return to Original Medicare Part A & Part B within 12-months of joining, usually, you must keep your Medicare Advantage plan for the rest of the year. You can disenroll or change plans during the Open Enrollment Period or if you qualify for a Special Enrollment Period. Depending on the type of Special Enrollment Period, you may or may not have the right to buy a Medigap policy.

Medigap & Medicare Part D Prescription Drug plans

You cannot have both a Medicare Prescription Drug Plan and have a Medigap policy with drug coverage.

If you join a Medicare Prescription Drug Plan and your Medigap policy covers prescription drugs, you’ll need to call your Medigap insurance company. They will then remove the prescription drug coverage from your Medigap policy and adjust your premium. Even though you haven’t changed Medigap policies, once removed, you cannot get the drug coverage back.

An insurance company might offer Medigap policies and Medicare Drug Plans. If you join a Medigap policy and a Medicare drug plan from the same company, you may make 2 separate premium payments for coverage. Contact your insurance company for more details.

Your Medigap company is required to send you a notice every year concerning if the prescription drug coverage in your Medigap policy is creditable. It’s best to keep these notices in the event you decide to join a Medicare drug plan later on.

Medigap policy with creditable drug coverage

If your Medigap policy includes creditable prescription drug coverage, you can only join a Medicare Prescription Drug plan between October 15 – December 7. Unless, you lose your Medigap policy, in which case, you can join a Medicare drug plan at the time you lose your Medigap policy.

Medigap policy without creditable drug coverage 

If you have a Medigap policy that doesn’t include creditable prescription drug coverage and decide to join a Medicare Prescription Drug Plan later, you will probably have to pay a late enrollment penalty. This means you will pay a higher monthly premium than if you joined when you were first eligible.

The penalty amount increases for every month you wait to join a Medicare drug plan, and you will most likely have to pay this penalty for a long as you have a Medicare drug plan.

 

Dropping or losing Medigap

Dropping your Medigap policy

If you want to drop your Medigap policy, you must contact your insurance company in order to cancel it.

Losing Medigap Coverage

In most cases, your Medigap insurance company cannot drop you because the Medigap policy is a guaranteed renewable policy. This means your insurance company cannot drop you unless:

  • You stop paying your premiums
  • You weren’t truthful on the Medigap policy application
  • The insurance company becomes bankrupt or insolvent

If your policy predates 1992, it might not be guaranteed renewable. Meaning, the Medicare insurance company can refuse to renew the Medigap policy. But, to cancel your Medigap policy, the insurance company must get the state’s approval. If this happens, you have the right to buy another Medigap policy.

Guaranteed issue rights

Guaranteed Issue Rights (or Medigap Protections) are rights you have in certain situations when insurance companies must offer you certain Medigap policies. In these situations, insurance companies:

  • Must sell you a Medigap policy.
  • Must cover all your pre-existing health conditions
  • Can’t charge you more for a Medigap policy because of past or present health problems.

In most cases, you have guaranteed issue rights when your other health coverages either change or you lose the other health care coverage. In other cases, you have what is called a “trial right” to try a Medicare Advantage Plan (Part C) but still buy a Medigap policy if you change your mind.


You have a guaranteed issue right in these situations:
_

  • You’re in a Medicare Advantage Plan, and your plan is leaving Medicare or stops giving care in your area, or you move out of the plan’s service area.
     

    You have a right to buy
    Medigap Plan A, B, C*, D*, F*, G*, K, or L that’s sold by any insurance company in your state. You only have this right if you switch to Original Medicare rather than joining another Medicare Advantage plan.

    You can/must apply for a Medigap policy:

    • As early as 60 days before the date your coverage will end.
    • No later than 63 days after your coverage has ended.

(Medigap coverage cannot begin until your Medicare Advantage Plan coverage ends)

 

  • You have Original Medicare and an employer group health plan (including retiree or COBRA coverage) or union coverage that pays after Medicare pays and that plan is ending.

    _
    You have a right to buy

    Medigap Plan A, B, C*, D*, F*, G*, K, or L that’s sold by any insurance company in your state.

    (for those with COBRA coverage, you can either buy a Medigap policy right away or when the COBRA coverage ends)

    You can/must apply for a Medigap policy no later than 63 days after the latest of these 3 dates:

    • Date the coverage ends.
    • Date on the notice telling you coverage is ending.
    • Date on the claim denial (if this is the only way you know your coverage has ended)

Note: Your rights may be extended an additional 12 months under certain circumstances.

 

  • You have Original Medicare and a Medicare SELECT policy and move out of the Medicare SELECT policy’s service area.
    _

    You have a right to buy
    Medigap Plan A, B, C*, D*, F*, G*, K, or L that’s sold by any insurance company in your state.

    You can/must apply for a Medigap policy:

    • As early as 60 days before the date your coverage will end.
    • No later than 63 days after your coverage has ended.
  • You joined a Medicare Advantage Plan or Program of All-inclusive Care for the Elderly (PACE) when you were first eligible for Medicare Part A at 65, and within the first year of joining, you decide you want to switch to Original Medicare (Trial Right).

    _
    You have the right to buy
    Any Medigap policy sold by any insurance company in your state.

    You can/must apply for a Medigap policy:

    • As early as 60 days before the date your coverage will end.
    • No later than 63 days after your coverage has ended.

Note: Your rights may be extended an additional 12 months under certain circumstances.

 

  • You dropped a Medigap policy to join a Medicare Advantage Plan (or to switch to a Medicare SELECT policy) for the first time, you’ve had the plan less than a year, and want to switch back (Trial Right)

    _
    You have the right to buy
    The Medigap policy you had before switching to the Medicare Advantage Plan or Medicare SELECT policy if the insurance company you had before still sells it. If your previous Medigap policy is not available, you can buy a Medigap Plan A, B, C*, D*, F*, G*, K, or L that’s sold by any insurance company in your state.

    You can/must apply for a Medigap policy:

    • As early as 60 days before the date your coverage will end.
    • No later than 63 days after your coverage has ended.

Note: Your rights may be extended an additional 12 months under certain circumstances.
_

  • Your Medigap insurance company goes bankrupt and you lose your coverage or your Medigap policy coverage otherwise ends through no fault of your own.
    _–_

    You have the right to buy
    Medigap Plan A, B, C*, D*, F*, G*, K, or L that’s sold by any insurance company in your state.

    You can/must apply for a Medigap policy:

    • No later than 63 days after your coverage has ended.
  • You leave a Medicare Advantage Plan or drop a Medigap policy because the company hasn’t followed the rules, or has misled you.

    You have the right to buy
    Medigap Plan A, B, C*, D*, F*, G*, K, or L that’s sold by any insurance company in your state.

    You can/must apply for a Medigap policy:

    • No later than 63 days after your coverage has ended.

* After Jan. 1, 2020, Plans C and F will no longer be offered to people who are new to Medicare. However, if you were eligible for Medicare before Jan 1, 2020, but not yet enrolled, you may still be able to buy Plans C or F. People eligible for Medicare on or after Jan. 1, 2020 can buy Plans D and G instead of Plans C and F.

Note: In the event more than one of the situations above applies to you, you can choose the guaranteed issue that gives you the best choice.


Can I buy a Medigap policy if I lose my health care coverage?

In case you have a guaranteed issue right to buy a Medigap policy, make sure you keep:

  • A copy of any letters, notices, emails, and/or claim denials that have your name on them as proof of your coverage being terminated.
  • The postmarked envelope these papers come in as proof of when it was mailed.

You may be asked to present these documents with your Medigap application to prove you have a guaranteed issue right.

If you have a Medicare Advantage Plan but plan to return to Original Medicare, you can apply for a Medigap policy before your coverage ends. As long as you are leaving the plan the Medigap insurance plan can sell it to you. To have continuous coverage, ask that the new policy take effect no later than when your Medicare Advantage enrollment ends.

 

Medigap & Travel

Your Medigap policy may cover healthcare services or supplies that you get outside of the U.S.

If you have Medigap Plan C, D, E, F, G, H, I, J, M, or N your plan:

  • Covers foreign travel emergency care if it starts in the first 60 days of your trip and if Medicare doesn’t cover the care.
  • Will pay 80% of the billed charges for certain medically necessary emergency coverage.
    _
    Before traveling outside the U.S., talk with your Medigap plan or insurance agent to get more information about your coverage.

Illegal Medigap Practices

Be aware of illegal Medigap practices, like if someone attempts to:

  • Pressure you into buying a Medigap policy
  • Lie to you to get you to switch to a new company or policy
  • Sell you a second Medigap policy when they know you already have one (excepting  when you state, in writing, that you plan to cancel your existing policy)
  • Sell you a Medigap policy when they know you already have Medicaid (except in certain situations)
  • Sell you a Medigap policy if they know you already have a Medicare Advantage Plan. (excepting if your Medicare Advantage Plan coverage ends before the Medigap policy’s effective date)
  • Claim a Medigap policy is part of the Medicare program or any other Federal program (Medigap is private health insurance)
  • Claim a Medicare Advantage Plan is a Medigap policy
  • Sell you a Medigap policy that cannot legally be sold in your state
  • Misuse the names, letters, or symbols of:
    • U.S. Department of Health & Human Services (HHS)
    • Social Security
    • Centers for Medicare & Medicaid Services (CMS)
    • Any of their programs (like Medicare)
  • Claim to be a Medicare representative if they work for a Medigap insurance company
  • Sell you a Medicare Advantage Plan when you say you want to keep Original Medicare and buy a Medigap policy (Medicare Advantage and Original Medicare are not the same. You will be disenrolled from Original Medicare and be unable to use a Medigap policy if you enroll in Medicare Advantage.)

Call the Inspector General’s hotline if you believe that a federal law has been broken.

Medicare Supplement insurance plans are also known as Medigap plans or policies. Medicare Supplement insurance plans help fill the “gaps” left behind by Original Medicare Part A & Part B and are sold by private companies.

While Original Medicare Part A & Part B pays for much of the cost of covered health care services and supplies, a Medicare Supplement insurance plan can help pay some of the remaining health care costs like:

  • Copayments
  • Coinsurance
  • Deductibles

How it works

Medicare will pay its share of the Medicare-Approved amount for covered healthcare costs, then your Medigap policy will pay its share. Original Medicare Part A & Part B doesn’t pay any of the costs for you to get a Medigap policy. You have to pay the premiums for the Medicare Supplement insurance plan you choose to purchase. In most Medigap policies, the insurance company will receive your Original Medicare Part B claim information directly from Medicare. After the payment is received, then, they pay your doctor directly. If your Medicare Supplement insurance plan doesn’t provide this service, ask your doctors if they “participate” in Medicare or “accept assignment” for all Medicare beneficiaries. If your doctors participate in Medicare, the Medigap insurance company is required to pay your doctor directly upon your request.

Here are 8 important things you should know about Medigap policies: 

1. You must have Original Medicare Part A & Part B to purchase a Medicare Supplement Insurance plan.

2. Medicare Supplement Insurance Plan  differ from a Medicare Advantage (Medicare Part C) Plan. Those plans are ways to receive your Medicare benefits, while a Medigap policy only supplements your Original Medicare Part A & Part B.

3. You pay the private insurance company a monthly premium for your Medicare Supplement insurance plan. You pay this monthly premium in addition to your Original Medicare Part B premium.

4. A Medigap policy only covers one person. If you and your spouse both want Medigap coverage, you’ll each have to buy separate Medicare Supplement Insurance plans. The good news is that most insurance companies offer a household discount towards your monthly premium.

5. Medicare Supplement insurance plans are standardized and identified by a letter of the alphabet (A, B, C, D, F, G, K, L M, and N), which means the coverage levels for each plan remain the same no matter which insurance company you choose. Every state offers Medigap plans with the same level of coverage, with the exception of Massachusetts, Wisconsin, and Minnesota.

6. Any standardized Medigap policy is guaranteed renewable even if you have health problems. This means the insurance company can’t cancel your Medicare Supplement insurance plan as long as you pay the premium.

7. It’s illegal for anyone to sell you a Medigap policy if you have a Medicare Advantage plan, unless you’re switching back to Original Medicare Part A & Part B.

8. Medigap policies generally don’t cover long-term care, dental or vision care, hearing aids, glasses, or private-duty nursing.