What Is Medigap? Medicare Supplement Insurance Explained

Medigap, also called Medicare Supplement Insurance, is health insurance sold by private companies. It works alongside Original Medicare (Part A and Part B). It is designed to help with some of the out-of-pocket costs Original Medicare leaves to you.

Original Medicare does not pay everything. Depending on the service, you may owe deductibles, coinsurance or copayments. Original Medicare also does not generally cover routine dental, vision or hearing care, and it does not include an annual limit on what you pay. Different medigap plans may cover different shares of these gaps.

Medigap plans are standardized, and they are labeled by letter. Plans sold to people newly eligible for Medicare are A, B, D, G, K, L, M and N, plus high-deductible Plan G. Plans C and F, and high-deductible F, are available only to people who became eligible before January 1, 2020. Plans E, H, I and J were discontinued and are not sold today. Massachusetts, Minnesota and Wisconsin standardize Medigap differently. Medigap is different from Medicare Advantage, and it does not include drug coverage.

Many people first meet Medigap when they sign up for Medicare Part B. They compare it with other ways to handle the costs Original Medicare leaves behind. Some choose a Medigap plan. Some choose a Medicare Advantage plan. Some rely on other coverage, such as an employer or retiree plan.

Medigap has real strengths. You may see any provider in the country that accepts Medicare, with no network and no referrals. The cost-sharing is generally predictable. The trade-offs are also real. Monthly premiums are generally higher. Outside open enrollment or guaranteed issue periods, a carrier may use medical underwriting. You need a separate Part D plan for drugs. Routine dental, vision and hearing are generally not included.

Medicare Advantage has its own strengths. Premiums are often lower. There is an annual out-of-pocket maximum. Many plans add extra benefits and drug coverage. The trade-offs are networks, prior authorization and copays. Neither path is right for everyone. Open enrollment, guaranteed issue and other timing rules vary by state and change over time. Confirm current rules with Medicare.gov, your State Health Insurance Assistance Program (SHIP), or a licensed agent.

A Medigap agent is a licensed professional who may help you sort through the options. An independent agent may be able to explain how the lettered plans differ and which carriers sell in your state. They may also help you understand how timing could affect your choices.

A first conversation is usually relaxed. The agent may ask about your doctors, your prescriptions, how you use care, your budget and when you became eligible for Medicare. They may also ask about your health history, since some applications involve medical questions. You are not expected to know the jargon.

Good questions to ask include: Which plan letters are available to me? How does my enrollment timing affect my options? Will I need medical underwriting? How would a separate drug plan fit in? How might my costs change over time? Call 1-800-MEDIGAP for more information.