Paul Sanchez
The Medicaid 'coverage gap' affects around 1.5 million Americans across nine states that have chosen not to expand Medicaid coverage to adults with incomes under the poverty level. This disproportionately impacts people of colour, particularly in the southern United States. Those in the coverage gap are left living in poverty but ineligible for financial assistance with health insurance. One option for those seeking to avoid the coverage gap is to purchase Medicare Supplement Insurance, also known as Medigap, which is extra insurance to help pay out-of-pocket costs in Original Medicare. Medigap policies can be purchased in addition to Original Medicare but cannot be combined with a Medicare Advantage Plan.
Characteristics and Values Table for Medicare Medigap Insurance
| Characteristics | Values |
|---|---|
| What is Medigap? | Medicare Supplement Insurance (Medigap) is extra insurance that helps pay out-of-pocket costs in Original Medicare. |
| Who can buy it? | You must have Original Medicare – Part A (Hospital Insurance) and Part B (Medical Insurance) – to buy a Medigap policy. |
| How does it work? | Medigap policies help cover out-of-pocket costs in Original Medicare, like emergency medical care when you travel outside the US. |
| How to get it? | When you're getting started with Medicare, you can either buy Medigap or enroll in a Medicare Advantage Plan, but you can't have both. |
| How to renew it? | All standardized Medigap policies are automatically renewed every year, even if you have health problems. |
| How to cancel it? | Your Medigap insurance company can drop you if you don't pay your Medigap premiums. |
| How to switch plans? | If you drop Medigap to join Medicare Advantage, you have a 12-month trial period to get Medigap back. If it's unavailable, you can buy another Medigap policy sold in your state. |
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What You'll Learn
Medigap policies and Medicare-approved amounts
Medigap, or Medicare Supplement Insurance, is health insurance sold by private companies to fill the gaps in Original Medicare Plan coverage. It helps pay for some healthcare costs that the Original Medicare Plan does not cover. If you have a Medigap policy and receive care, Medicare will pay its share of the Medicare-approved amount for covered healthcare costs.
Medigap policies are automatically renewed every year, even if you have health problems. However, you can only be dropped from a Medigap policy if you join a Medicare Advantage Plan. A Medicare Advantage Plan is another way to get your Medicare coverage, but you cannot have both a Medigap policy and be enrolled in a Medicare Advantage Plan. If you drop a Medigap policy to join a Medicare Advantage Plan, you will have a single 12-month period to get your Medigap policy back if you return to the Original Medicare Plan.
Medigap policies must follow federal and state laws, and the front of the policy must clearly identify it as "Medicare Supplement Insurance". The standardized Medigap policies offered by insurance companies must provide the same benefits, with the only difference being the cost. It is important to compare Medigap policies as costs can vary. Additionally, you and your spouse must buy separate Medigap policies, and your policy will not cover any healthcare costs for your spouse.
Medigap plans sold after 2005 do not include prescription drug coverage. However, if you join a Medigap policy and a Medicare drug plan offered by the same company, you may need to make two separate premium payments for your coverage. It is important to note that Plan C and Plan F are no longer available to people new to Medicare starting on or after January 1, 2020, as Medigap plans sold after this date were not allowed to cover the Part B deductible.
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Medigap and Medicare Advantage Plan differences
When considering whether to buy a Medigap policy or enroll in a Medicare Advantage plan, you need to decide whether you want to get your primary coverage from the federal government through Original Medicare, perhaps supplemented with a private Medigap policy, or from a private insurer through a Medicare Advantage plan.
Medigap, also known as Medicare Supplement Insurance, is insurance sold by private companies that fills the "gaps" in Original Medicare by covering some out-of-pocket expenses, such as deductibles and copays. Medicare beneficiaries pay a monthly premium for a Medigap plan, which can vary widely based on age and city. People choose to purchase Medigap to pay for some healthcare costs that Medicare doesn't cover. Medigap plans sold after 2005 do not include prescription drug coverage. If you want prescription drug coverage, you can join a separate Medicare drug plan (Part D).
Medicare Advantage, also known as Medicare Part C, is an all-in-one alternative to Original Medicare. The federal government requires Medicare Advantage plans to cover everything that Medicare Part A and Part B cover, but they may have different deductibles and copayments. Most Medicare Advantage plans include prescription drugs, too, and many help pay for services Original Medicare doesn't cover, such as routine dental, hearing, and vision care. Unlike Original Medicare and Medigap, which cover all doctors and other providers who accept Medicare, most Medicare Advantage plans have a provider network and may charge more or may not cover doctors or facilities outside of a plan's network.
When you're getting started with Medicare, you can either buy Medigap or enroll in a Medicare Advantage Plan, but you can't have both. You can't buy Medigap while you're in a Medicare Advantage Plan unless you're switching back to Original Medicare. If you drop a Medigap policy to join a Medicare Advantage Plan for the first time, you'll have a single 12-month period (your trial right period) to get your Medigap policy back if the same insurance company still sells it once you return to Original Medicare.
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Medigap, Medicare Advantage Plan and Original Medicare
Medicare Supplement Insurance, or Medigap, is extra insurance you can buy from a private health insurance company to help pay your share of out-of-pocket costs in Original Medicare. In most cases, you must have Original Medicare – Part A (Hospital Insurance) and Part B (Medical Insurance) – to buy a Medigap policy. Medigap plans sold after 2005 don't include prescription drug coverage, so you may need to join a separate Medicare drug plan (Part D).
Medigap policies are automatically renewed every year, even if you have health problems. Your Medigap insurance company can only drop you under specific circumstances. A Medigap policy is different from a Medicare Advantage Plan (Part C). A Medicare Advantage Plan is another way to get your Medicare coverage besides Original Medicare. When starting with Medicare, you can either buy Medigap or enroll in a Medicare Advantage Plan, but you can't have both. You can't buy Medigap while you're in a Medicare Advantage Plan unless you're switching back to Original Medicare.
If you drop a Medigap policy to join a Medicare Advantage Plan for the first time, you’ll have a single 12-month period (your trial right period) to get your Medigap policy back if the same insurance company still sells it once you return to Original Medicare. If you joined a Medicare Advantage Plan when you were first eligible for Medicare Part A at 65, you can choose from any Medigap policy that's sold by an insurance company in your state if you switch to Original Medicare within the first year of joining the Medicare Advantage Plan.
Original Medicare and Medigap do not require prior authorization for the vast majority of procedures, or a referral from a primary care doctor. Coverage extends throughout the United States, an important benefit for people who travel frequently and those who own multiple homes in different states. Medicare Advantage plans, on the other hand, offer lower or no monthly premiums and extra benefits, but they restrict your choice of providers and require preauthorization for high-cost treatments, which can delay care.
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Medigap and Medicare drug plans
Medicare Supplement Insurance, also known as Medigap, is extra insurance that can be purchased from a private health insurance company to help cover out-of-pocket costs in Original Medicare (Parts A and B). Medigap policies are standardised and automatically renewed annually, even if you experience health problems. However, it's important to note that Medigap is distinct from a Medicare Advantage Plan (Part C), and you cannot have both simultaneously. If you switch to a Medicare Advantage Plan, you can later return to Original Medicare and purchase a Medigap policy, but only within a 12-month trial period.
Medigap policies cover the out-of-pocket costs that Original Medicare doesn't pay for, such as copayments, coinsurance, and deductibles. After you've paid the deductible, the Medigap policy will cover the remaining coinsurance amount. It's worth noting that Medigap policies sold after 2005 do not include prescription drug coverage. If you require prescription drug coverage, you can enrol in a separate Medicare drug plan (Part D).
When you have a Medigap policy and receive medical care, Medicare will pay its share of the Medicare-approved amount for covered health care costs. Your Medigap policy will then pay your doctor the amount you owe under your policy, and you will be responsible for any remaining costs. Some Medigap insurance companies also provide this service for Part A claims. If your Medigap insurance company does not obtain claims information directly from Medicare, you may need to ask your doctors if they "participate" in Medicare, meaning they "accept assignment" for all Medicare patients. If your doctor participates, your Medigap insurance company is required to pay them directly upon your request.
If you join a Medigap policy and a Medicare drug plan offered by the same company, you may need to make two separate premium payments for your coverage. It's important to contact your insurance company to understand the specific details of your plan. Additionally, if you joined a Medicare Advantage Plan when you were first eligible for Medicare Part A at 65, you have the option to switch to Original Medicare within the first year and choose any Medigap policy sold by an insurance company in your state. This also applies to Plans M and N, which have unique enrolment conditions.
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Medigap and emergency medical care
Medigap, also known as Medicare supplement insurance, helps cover your share of costs for services that are covered by Original Medicare (Part A and Part B). If you have a Medigap policy and get care, Medicare will pay its share of the Medicare-approved amount for covered healthcare costs. In most cases, your Medigap policy will pay your doctor whatever amount you owe under your policy, and you will be responsible for any remaining costs.
Medigap policies are automatically renewed every year, even if you have health problems. However, you cannot buy Medigap while you are in a Medicare Advantage Plan (Part C). If you want to switch to Original Medicare and buy a Medigap policy, you must contact your Medicare Advantage Plan to see if you can disenroll. If you drop a Medigap policy to join a Medicare Advantage Plan for the first time, you will have a single 12-month period to get your Medigap policy back.
Medigap can help you pay your share of the cost of an emergency room visit. If you are treated and released from an emergency department without being admitted to the hospital as an inpatient, Medicare Part A will probably not cover your ER visit. In this case, you may be able to get coverage through Medicare Part B, C, D, or Medigap, depending on your specific plan. If you have Medigap in addition to your Part B plan, it can help you pay your 20% share of the cost of the ER visit.
Medicare Part C (Medicare Advantage) plans offer the same benefits as Original Medicare, which means they will also pay for ER and urgent care expenses. Even though Medicare Parts B and C usually pay for ER visits, you will still be responsible for your deductible, coinsurance, and copayments in addition to your monthly premiums for these plans. If you have a Medigap plan, it may pay part of your copay or coinsurance.
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Frequently asked questions
The Medicaid 'coverage gap' affects people who are living in poverty but are not eligible for financial assistance with their health insurance. This gap exists in nine states and is caused by those states' decision not to expand Medicaid. People in the coverage gap cannot get Medicaid and have to purchase ACA-compliant coverage at full price, which is often unrealistic.
Medicare Supplement Insurance, or Medigap, is extra insurance that helps pay for out-of-pocket costs in Original Medicare (Part A and Part B). You can buy a Medigap policy from a private health insurance company, but you must already have Original Medicare. Medigap policies are automatically renewed every year, and you will keep your policy as long as you pay the premiums.
Yes, you can have both Medicare and Medicaid. However, if you have a Medigap policy, you cannot also be enrolled in a Medicare Advantage Plan (Part C). You can switch between these options during a trial period, but you cannot have both at the same time.
