What is Medicare Supplement Health Insurance?

January 2, 2022

A Medicare Supplement health insurance plan, also sometimes referred to as Medigap, is a comprehensive medical insurance plan covering services that traditional Original Medicare doesn't. Expenses such as doctors' office copayments, coinsurance, and deductibles would be covered with Medigap.

Private insurance companies sell Medigap policies. A Medicare Supplement health insurance plan provides additional benefits and coverage beyond what's offered by Original Medicare. Medigap can be purchased as stand-alone policies or through an employer-sponsored group health insurance policy. 

Types of Medicare Supplement Health Insurance Plans

There are several different types of Medicare Supplement health insurance plans. The most common types include:

Hospital Indemnity

Protects against the costs associated with hospitalization. This includes medical care provided at a skilled nursing facility, home healthcare, hospice, etc.

Medical Expense Coverage

Covers out-of-pocket expenses such as physician visits and prescription drugs.

Dental Benefits

If you qualify, this plan covers dental work done by dentists or oral surgeons. It does not cover cosmetic procedures like teeth whitening or veneers.

Vision Care

If you qualify for vision benefits, they can be used for glasses, contact lenses, eye exams, laser surgery, cataract removal, glaucoma treatment, diabetic retinopathy screening, etc.

What Do I Need to Know About My Health Before Buying a Medigap Policy?

Medigap insurance companies can use medical underwriting to determine whether or not to accept your application and how much to charge you. If you have health problems, you can still buy a Medigap policy for the same price as people with good health. Therefore, it's important to get a comprehensive physical done to have your application accepted for a Medicare Supplement.

For a free copy of "Choosing a Medigap Policy: A Guide to Health Insurance for People With Medicare," you can call 1-800-633-4227. Information on your State Insurance Department can be found in this publication.

How Long Should I Wait Between Applying for New Policies?

The best time to apply for a Medigap policy is when you first become eligible for Medicare (generally by 65). However, if you already have an existing policy through another company, you may be able to transfer your current policy into a Medicare Advantage plan. Nonetheless, waiting until after you turn 65 might make sense because fewer options are available then than now.

Do All States Offer Medigap Coverage?

Yes! All 50 states offer some form of supplemental insurance. Most states require their residents to purchase these types of policies. The amount of coverage varies depending upon what state you live in.  

How Much Money Should I Expect to Spend Each Month When Purchasing a Medigap Policy?

Medicare Supplement health insurance plans have premiums that cost anywhere from $70/month to around $270/month. Plans with higher monthly premiums tend to have a lower deductible. Lower monthly premiums tend to have higher deductibles.

Is It Better to Buy an Individual Policy or Group Insurance?

Individual policies usually provide more flexibility since you don't have to worry about getting enough memberships to join a particular provider network. Group policies often come with additional discounts and other perks.

Can I Use My Broker?

Yes, you can choose an agent who sells Medigap policies. There's no restriction on where you can go to find one. There is no additional cost associated with using a licensed agent, and it is encouraged since these individuals can consult with you on which plans work best for you and your needs.

Will I Lose My Medicare Coverage if I Switch Carriers?

No, switching carriers won't affect your Medicare coverage. If anything, it would give you access to different providers within your area. It also allows you to compare costs among various insurers. As long as you stay enrolled in the original carrier, you'll continue receiving benefits.

What Happens if I Change Jobs Before Buying a Medigap Policy and Decide Later That I Want to Keep the Old Policy?

If you move jobs while Medicare covers you, you must notify your insurer immediately. This means that they need to cancel your previous policy and issue a replacement policy. Once you've notified them, you can add yourself back to the old policy at any time. In summary, you cannot "keep" a policy once you leave your employer.

What Does "Medigap" Mean?

It stands for Medical Insurance Guarantee Association Plan. These are private companies that sell medical insurance products like supplementary health care coverage. They help protect people against high out-of-pocket expenses due to unexpected illness or injury.