What’s the difference between Medicare Supplement plans and Medigap plans?

Pamela Cannaday by Pamela Cannaday | Licensed since 2011
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This article was updated on: 09/16/2018

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If you’re wondering “What’s the difference between Medicare Supplement and Medigap? Is a Medigap policy the same thing as a Medicare Supplement plan? What do these plans offer me in coverage?” then here is some information for you.

Medicare Supplement plans and Medigap policies: What’s the difference?

There’s no difference between Medigap and Medicare Supplement. Medicare Supplement and Medigap are synonyms for the same type of health insurance – they have the same meaning. These plans are offered by private insurance companies and are designed to help pay your out-of-pocket costs for services covered under Medicare Part A (hospital insurance) and Part B (medical insurance). For example, some Medicare Supplement plans might pay all or part of your Part B coinsurance amounts.

If you decide to receive your Medicare Part A and Part B benefits from the federally administered program rather than through a Medicare Advantage plan, you might have the option of buying a Medicare Supplement plan to help pay Original Medicare’s out-of-pocket costs, such as deductibles, copayments, and coinsurance amounts. In other words, Medicare will pay its share of the Medicare-approved amounts of covered health care services you receive. Then your Medigap policy pays its share. Different Medigap plans pay for different amounts of those costs, such as copayments, coinsurance, and deductibles.

Medigap plans work alongside Medicare Part A and Part B; you need to be enrolled in both, and you must also live within the plan’s service area.

Medicare supplement plans: Standardized benefits

Every private insurance company that offers Medicare Supplement plans must follow federal and state laws designed to protect consumers. The policy must be clearly identified as “Medicare Supplement Insurance.” Insurance companies in most states can sell only “standardized” Medicare Supplement plans, identified by letter. You can find coverage details about all 10 standardized Medicare Supplement plans using the Medicare Supplement (Medigap) Plan Comparison Chart.

Medicare Supplement plans: Availability and costs

Each standardized, lettered Medicare Supplement plan must offer the same basic benefits, no matter which insurance company sells it. But the plan premiums may vary from one insurance company to another. So, once you have decided which standardized Medicare Supplement plan(s) may best suit your needs, it may be a good idea to compare the plans offered where you live. By clicking on the “Compare Plans” or “Find Plans” link on this page, you can learn more about the availability and cost of Medicare Supplement plans in your area. This is an important step in your consideration for two reasons:

  1. Not all insurance companies offer all the standardized Medicare Supplement plans, so you can check to see if the plan you want is available.
  2. The cost or premium can vary among insurance companies offering the same standardized Medicare Supplement plan.

Medicare Supplement plans: When can I apply?

When you apply for a Medigap plan can affect your cost for coverage, and even whether a plan will accept you. For many people the best time to apply for a Medicare Supplement plan is during the Medigap Open Enrollment Period. This period lasts for 6 months and begins on the first day of the month in which you’re age 65 or older and enrolled in Medicare Part B. (Some states may have additional open enrollment periods.)

During the Medigap Open Enrollment Period, an insurance company can’t use medical underwriting. (Medical underwriting is the practice of reviewing a person’s health status to determine whether or not to offer the person coverage, whether to apply any restrictions on the coverage, and whether to charge more to cover the expected costs related to a pre-existing health condition.) During your Medigap Open Enrollment Period, the insurance company can’t do either of the following because you have health problems:

  • Refuse to sell you any Medigap policy it offers
  • Charge you more for a Medigap policy than they charge a person with no health problems

If you have a health condition, be aware that in some cases, there may be a waiting period before costs relating to your health condition are covered.

Read more to find out if you can switch to a different Medicare Supplement plan.

What else should you know about Medicare Supplement (Medigap) plans?

Medicare Supplement plans are normally renewable even if you develop health problems. As long as you have Medicare Part A and Part B and continue to pay your monthly premium, your insurance carrier typically cannot cancel your Medigap policy. However, if the insurance company goes bankrupt or insolvent, you could lose your policy. Also, be aware that the insurance company might increase your premium.

Another possible “plus” for Medicare Supplement insurance is that you might be able to keep your Medigap policy if you move out of state because your coverage is not tied to your use of a plan-designated network of health-care providers (unless you chose to purchase a type of Medicare Supplement policy called Medicare SELECT). You also may be able to add a stand-alone Medicare Part D Prescription Drug Plan to complement your Medicare Part A and Part B and Medicare Supplement plan coverage.

Would you like assistance in comparing the different Medicare Supplement plans available where you live? I can help you.

  • Use the other links to schedule a phone call or have me email information to you.

Medicare Supplement insurance plans are not connected with or endorsed by the U.S. government or the federal Medicare program.

The product and service descriptions, if any, provided on these eHealth Insurance Web pages are not intended to constitute offers to sell or solicitations in connection with any product or service. All products are not available in all areas and are subject to applicable laws, rules, and regulations.

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