Is Medicare Medigap Insurance a Necessity?

Medicare Medigap Insurance—What it is and how it works.

Medicare Supplemental Insurance (Medigap Insurance) plans are private healthcare insurance plans that can be purchased by Medicare enrollees to cover medical expenses not covered by Medicare. Items not covered may include deductibles, co-payments, procedures not covered by Medicare and other out-of-pocket expenses. Medicare supplemental insurance is not required and must be acquired at the policyholder’s expense.

Eligibility Requirements to Purchase Medigap Insurance

An individual must be enrolled in Medicare Part A or B to be eligible to enroll in a Medigap plan. During the open enrollment window, which begins 6 months before turning 65 or enrolling in Medicare Part B at 65 or older, an enrollee may obtain a Medigap plan on a guaranteed issue basis. This means that the insurance company must sell you a Medigap policy despite any pre-existing conditions or your current state of health. The issuing insurance company may require a medical screening at other times before issuing a policy.

Types of Medigap Insurance Products Available

Medicare medigap insurance policies have been standardized by the Center for Medicare and Medicaid Services (CMS) into ten different options, labeled A through N, which are sold and administered by private insurance companies. Each Medigap plan offers a specific package of benefits. The amount and type of medical expenses covered by each plan is roughly proportional to the insurance premium paid. The federal government does not sponsor Medicare Medigap Insurance policies; therefore the cost may vary from state to state.

Which Medigap Policy is Best?

Each Medicare Medigap Insurance plan offers different levels of coverage. Some Medigap policies provide a minimal amount of additional coverage for a minimal cost. Other plans provide coverage for more medical expenses but come with a higher deductible. It is often best to seek the advice from someone who is familiar with the different Medicare Medigap Insurance plans to decide which one is best for you.

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