Medicare supplement insurance, also known as Medigap, is an insurance policy meant to pay for the additional costs of Original Medicare. It is a supplemental insurance plan so in order to sign up for Medigap, one must already be enrolled in Original Medicare (Medicare Part A and Part B). Although private-sector insurance companies underwrite, price, and administer Medigap policies, they must follow strict guidelines set by the federal government. The “gaps” that Medigap covers are the costs like copayments, coinsurance, and deductibles. There are 10 standardizes plans that are approved by Medicare: Plans A, B, C, D, F, G, K, L, M and N. (These letter denominations are completely separate of and unrelated to Medicare Parts A. B, C and D). Plan F is the most popular due to its extensive coverage. Prospective enrollees in Medigap should still do their research because despite the uniform coverage, prices will vary from provider to provider so research should still be done for the best rates.
When can I enroll for a Medigap plan?
The ideal time to sign up for Medigap would be during the Medigap Open Enrollment Period. This period lasts 6 months and begins on the first day of the month in which you’re both 65 or older and enrolled in Medicare Part B. During this 6-month period, the insurance must follow these three clauses called “guaranteed issue”:
- Offer you every Medigap policy it has
- Charge you the same rate as a person with no health problems
- Not delay the start of your coverage
The other instances in which you would be entitled “guaranteed issue” is if:
- Your Medicare Advantage plan shuts down or you move out of its service area
- Your retiree plan shuts down
- You joined Medicare Advantage at 65 but decide to switch back to original Medicare within a year
- Your Medigap shuts down
Even if you have health problems, signing up during your Medigap Open Enrollment Period will mean the lowest rates. Medigap plans are guaranteed renewable each year even if you develop a health problem, as long as you continue to pay the monthly premium. If you attempt to sign up outside of open enrollment, insurance companies can charge a higher premium for pre-existing conditions or even refuse coverage all together.