What Is Medicare Medigap Insurance?

A Medicare Medigap policy closes the gaps in standard Medicare insurance.

Medicare takes most of the cost burden of health care off the shoulders of seniors. But that security comes with a price: The cost-sharing in Medicare can be steep for certain services and some health care issues have coverage gaps. Most seniors aren’t content with the Medicare status quo and statistics show that most elect to purchase supplemental coverage known as a Medicare Medigap policy.

How It Works

This supplemental insurance pays benefits only after Medicare coverage has paid up to its limits for the particular health care service. Medicare Medigap insurance helps you with the out-of-pocket costs that Medicare doesn’t pay and will also cover certain services that Medicare provides no benefit for—emergency medical treatment while traveling in a foreign country, for example.

What It Pays

First, you’ll need to assess your own financial ability to cover the various co-payments and deductibles you may encounter after Medicare has paid its share. Then, you can evaluate the various Medigap plans and benefits. Medigap is divided into ten standardized plans, designated A through N. Each plan offers different benefits such as co-payments, hospitable and annual deductibles, hospice care and out-of-pocket limits. Plans C and F have the highest enrollment and cover both the hospital and annual deductibles on your Medicare plan.

How To Enroll

You can get a list of companies that sell Medigap insurance from your state insurance department. If you apply within six months of your 65th birthday and have Medicare Part B, or within 63 days after losing certain insurance such as a retiree health plan, the insurance company cannot refuse to sell you Medicare Medigap insurance. Nor can the insurance company increase the price of the policy based on questions about your health status in the application.

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