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Medicare Supplement Insurance (Medigap)

Understanding Medicare Supplement Insurance

What is Medicare Supplement Insurance?

Medicare Supplement Insurance, or Medigap, is private health insurance designed to complement Original Medicare (Part A and Part B). It helps cover out-of-pocket costs that Medicare does not, such as copayments, coinsurance, and deductibles.

How Does it Complement Original Medicare?

Medigap plans work alongside Original Medicare, paying for some or all of the expenses that Medicare beneficiaries would otherwise be responsible for. This provides beneficiaries with greater financial predictability and peace of mind.

Reasons to Purchase Medicare Supplement Insurance

Reduce Financial Risk:  Medicare Supplement Insurance plans help cover costs such as copayments, coinsurance, and deductibles that Original Medicare does not cover. Part A Deductible, hospital stays, skilled nursing facility stays, the unlimited Part B 20% coinsurance/copay, Part B excess charges are all paid under plan G.

Predictable Healthcare Costs:  With Medicare Supplement Insurance plans, you will have more certainty about your healthcare expenses and avoid unexpected medical bills.  Plan G is as close as you will find 100% coverage in Medicare.

Freedom to Choose Providers:  Medicare Supplement insurance allows you to see any healthcare provider nationwide who accepts Medicare patients without needing a referral.

Coverage on Travel:  Some Medicare Supplement insurance plans offer coverage for healthcare services outside the United States.


When Am I Eligible For Medicare Supplement Insurance?

To be eligible to purchase a Medigap policy, you typically need to meet the following criteria:

  • Be enrolled in Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance).

  • Be at least 65 years of age (this is state specific)



When Can I Purchase Medicare Supplement Insurance?

The most favorable time to purchase a Medigap policy is during your Medigap Open Enrollment Period (OEP). This period begins when you are both 65 years old or older and enrolled in Medicare Part B.


The Medigap OEP lasts for six months and is the best time to buy a Medigap policy because:


  • You have guaranteed issue rights, meaning insurance companies cannot deny you coverage or charge you higher premiums based on your health status or pre-existing conditions during this period.

  • You have a wide selection of Medigap plans to choose from.


If you miss your Medigap OEP, you may still be eligible to purchase a Medigap policy, but you could be subject to medical underwriting, which means that the insurance company can consider your health conditions when deciding whether to offer you coverage and how much to charge for premiums.

What Medicare Supplement Plans am I Eligible to Enroll In?

You are eligible to enroll in a Medicare Supplement Plan if you are already enrolled in Medicare Part A and Part B. Medicare Supplement Plans, also known as Medigap plans, help cover some of the out-of-pocket costs of Original Medicare, such as deductibles, copayments, and coinsurance.

There are different types of Medicare Supplement Plans, labeled with alphabetical letters (Plan A, Plan B, Plan C, etc.). Each plan offers a specific set of standardized benefits, so you can choose the plan that best meets your needs.

It is important to note that eligibility for Medicare Supplement Plans may vary based on your age, health status, and location. Additionally, enrollment periods and coverage options may differ depending on the state in which you reside. It is recommended to speak with a licensed insurance agent or visit the official Medicare website for more information on eligibility and enrollment.

Will My Pre-existing Conditions be Covered With a Medicare Supplement Insurance Policy?

Yes, Medicare supplement insurance policies are designed to cover certain healthcare costs that Original Medicare (Parts A and B) does not cover, such as copayments, coinsurance, and deductibles. These policies are standardized and offered by private insurance companies. They are not allowed to deny coverage based on pre-existing conditions as long as you enroll during your initial enrollment period or have a guaranteed issue right. However, if you apply for a Medicare supplement policy outside of these times, the insurance company may impose medical underwriting and potentially deny coverage based on your pre-existing conditions. It is important to carefully review the terms and conditions of the policy before enrolling to ensure that your pre-existing conditions will be covered.

When Does Medicare Supplement Open Enrollment Take Place?

Ideally, you should buy Medicare Supplement Insurance during your Medigap Open Enrollment Period [4] Centers for Medicare & Medicaid Services. When Can I Buy Medigap . Accessed May 13, 2022. View all sources .

This period happens only once. It starts once you’re 65 and enrolled in Medicare Part B, and lasts for six months. (If you delayed Part B enrollment, the open enrollment starts after you’ve ended active employment or no longer have that insurance.)

Medigap policies are cheapest and easiest to get during this open enrollment period because insurance companies aren’t allowed to factor your health or medical history into your price. After the period ends, the prices may go up or you may be denied coverage due to your health status or medical history.

In some states, insurance companies sell Medigap plans to those under 65 who are living with a disability and are eligible for Medicare. You can find more information through your State Health Insurance Assistance Program , or SHIP.

Can I purchase a Medicare Supplement insurance policy (Medigap) outside of my open enrollment?


Yes, you can purchase a Medicare supplement insurance policy (Medigap) outside of your open enrollment period, but you may be subject to medical underwriting and could be denied coverage or face higher premiums based on your health status. It's important to explore your options if you have chronic health issues prior to your Medigap open enrollment window closes.

Medicare Supplement insurance underwriting criteria

  1. What health conditions do you currently have?

  2. Have you been hospitalized or had any surgeries in the past few years?

  3. Are you currently taking any prescription medications?

  4. Have you ever been diagnosed with a chronic or serious medical condition?

  5. Have you used tobacco products within the last year?

  6. Have you been denied coverage for a Medigap policy in the past?

  7. Do you have any pending or upcoming medical procedures or treatments?

  8. Have you recently been diagnosed with a terminal illness?

  9. Have you been diagnosed with any mental health conditions?

  10. Have you been advised by a doctor to make any lifestyle changes for your health?

What are the important factors to consider when purchasing a Medigap plan?


When purchasing a Medigap plan, it's important to consider factors such as the plan's coverage, cost, and the insurance company's reputation. You should also compare plans from different companies to find the one that best fits your needs and budget. Additionally, make sure to enroll during your Medigap Open Enrollment Period to avoid any penalties or restrictions.

What is the most popular Medicare Supplement plan?


Plan G is the top choice for Medicare supplement insurance as it provides almost all the same benefits as Plan F which is the most comprehensive option. The main difference is that Plan G includes the Medicare Part B deductible of $240 per year. After January 1, 2020, Plan F is no longer available for purchase unless they were on it previous to that date. They best part is the money saved on premiums exceeds the cost of the Part B deductible. Additionally, Plan G provides coverage coinsurance for Parts A, B, hospice care, skilled nursing facility and more. All of these factors make it the most popular supplement insurance with Medicare for comprehensive coverage and least out-of-pocket costs.

Who Are the Top Medigap Insurance Carriers?

Some of the top Medigap insurance carriers include Ace Medicare Supplement by Chubb, Aetna, AARP UnitedHealthcare, Blue Cross Blue Shield, Humana, Mutual of Omaha.

What Does Supplemental Insurance Cover With Medicare?

What Benefits Do Medicare Supplements Offer?

Medigap plans typically cover various out-of-pocket costs, including:

  • Part A coinsurance and hospital costs

  • Part B coinsurance or copayments

  • Part A hospice care coinsurance or copayments

  • Blood (first three pints)

  • Skilled nursing facility care coinsurance

  • Part A deductible

  • Part B deductible (not covered by all plans)

  • Part B excess charges

  • Foreign travel emergency care (limited by some plans)


These benefits can vary depending on the specific Medigap plan you choose.

What is Not Covered by Medicare Supplement Insurance?

While Medicare supplement insurance (Medigap) covers some out-of-pocket expenses that Original Medicare does not cover, there are certain services and costs that Medigap plans do not cover. These may include:

  1. Long-term care (e.g. nursing home care)

  2. Dental care

  3. Vision care

  4. Hearing aids

  5. Eyeglasses

  6. Private-duty nursing

  7. Prescription drugs (Medicare Part D covers prescription drugs)

  8. Cosmetic surgery

  9. Additional benefits beyond what Original Medicare covers

It is important to carefully review and understand the coverage limitations of Medigap plans before enrolling.

How Much Does Medicare Supplement Cost?

How are Medigap premiums determined?

The pricing for Medicare Supplement Insurance, also known as Medigap, is determined through various methods, and it can vary based on several factors. Here's an overview of how pricing is typically determined for Medigap policies:

1. Standardized Plans


Medigap plans are standardized by the federal government, which means that the benefits offered by a specific plan (e.g., Plan A, Plan G) are the same, regardless of the insurance company that sells it. However, pricing can vary significantly between insurance companies for the same standardized plan.


2. Community-Rated, Issue-Age-Rated, and Attained-Age-Rated Pricing


Insurance companies use different methods to set premiums for Medigap policies. The three most common pricing methods are:


Community-Rated: Premiums are the same for all policyholders within a particular geographic area, regardless of age. Community-rated pricing tends to be more stable over time and is often preferred by those who want predictable premiums.


Issue-Age-Rated: Premiums are based on the age at which you initially purchase the policy. Your premium is lower if you enroll at a younger age and typically increases as you get older. Issue-age-rated pricing can result in lower initial premiums for younger enrollees.


Attained-Age-Rated: Premiums are based on your current age, so they start lower when you enroll but increase as you get older. Attained-age-rated pricing can be attractive initially but may become more expensive over time.


3. Location


Your geographic location can also affect Medigap pricing. Insurance companies may use regional pricing variations, meaning that the cost of the same Medigap plan can vary depending on where you live. Urban areas often have higher premiums than rural areas.


4. Tobacco Use


Some insurance companies may charge higher premiums for individuals who use tobacco products. If you are a tobacco user, you might pay more for your Medigap coverage.


5. Gender


In some states, insurance companies may use gender as a factor in determining premiums. This means that men and women may have different premium rates for the same Medigap plan.


6. Discounts and Special Offers


Some insurance companies offer discounts or special promotions that can affect the pricing of your Medigap policy. These discounts might be related to household composition, payment method (e.g., electronic funds transfer), or other factors.


7. Rate Increases


Medigap premiums can increase over time due to various factors, including inflation, healthcare costs, and changes in the insurance company's pricing structure. It's essential to consider the potential for future rate increases when evaluating Medigap policies.


8. State Regulations


State insurance regulations can influence how insurance companies set premiums and what factors they can consider when determining rates. Some states have specific rules regarding Medigap pricing.

How does Medigap insurance work with Medicare?

Medigap insurance, also known as Medicare Supplement Insurance, is a type of private health insurance that helps cover some of the out-of-pocket costs that Original Medicare (Parts A and B) doesn't cover, such as copayments, coinsurance, and deductibles.

Medicare pays its share of the Medicare-approved amount for covered healthcare services, and then the Medigap policy will pay its share of the costs. This can help reduce your out-of-pocket expenses and provide you with more comprehensive coverage.

It's important to note that Medigap policies can only be used with Original Medicare and cannot be used with Medicare Advantage plans. Additionally, you must be enrolled in both Medicare Part A and Part B in order to be eligible to purchase a Medigap policy.

Overall, Medigap insurance works in conjunction with Medicare to provide beneficiaries with additional coverage and financial security and protection.

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