What Is Medigap Insurance? - dummies

What Is Medigap Insurance?

By Ryan P. Zacharczyk, CFP®, MBA CRPC

A Medigap policy is a health insurance policy sold through a private insurance company to help fill in the “gap” in Medicare’s costs. Medigap policies help pay some of the costs that original Medicare does not cover. Medigap policies, like Medicare, will only cover one beneficiary, not your spouse. Importantly, both you and your spouse must get separate medigap policies. In most cases, you will not be eligible to purchase a Medigap policy unless you are also enrolled in Part B.

Medigap policies are regulated by the government to protect the consumer and they are “standardized” by the insurance company so that you may make an “apples to apples” comparison. You can choose up to 12 different types of policies that are labeled Plans A through L.

Medigap Plan A is the most basic coverage that also has the lowest premiums. As you move through the Medigap plan alphabet, the features and coverage increase though Part L. For example, Medigap G will have more benefits than F, but less than H.

Medigap premiums obviously vary based on the plan you choose, and also by the insurance carrier. Although there is continuity amongst plans (Medigap D will have the same coverage amongst all companies), there can be a big difference in premiums. Once you find the appropriate coverage, you need to shop the costs.

Traditionally, Medigap policies have covered gaps only in traditional Medicare. However, some companies offer additional coverage for items that are not covered by Medicare, such as hearing aids and international travel coverage. Be sure to do your research to ensure you find the right program with the right coverage for your needs.