Jane Dotson
Medicare Part D provides drug coverage, including prescription drugs, deductibles, and copays. Medicare Supplement Insurance (Medigap) is extra insurance that can be purchased to help pay for out-of-pocket costs in Original Medicare, but it does not include prescription drug coverage. Those who want prescription drug coverage can join a separate Medicare drug plan (Part D). In this paragraph, we will explore the relationship between Medicare Part D and supplemental insurance options, including Medigap, to understand how they work together to provide coverage for individuals.
| Characteristics | Values |
|---|---|
| What is Medicare Supplemental Insurance? | Medicare Supplement Insurance, or Medigap, is an optional add-on that can fill “gaps” in Medicare Part A and Part B. |
| Who can get it? | Generally, you must have Original Medicare — Part A and Part B — to buy a Medigap policy. You can buy a Medigap policy when you turn 65 and enroll in Medicare Part B. |
| What does it cover? | Medigap policies don't cover long-term care, vision, dental, hearing aids, private-duty nursing, or prescription drugs. Some Medigap policies offer coverage when you travel outside the U.S. |
| How much does it cost? | The price is the only difference between policies with the same letter sold by different companies. |
| How does it work with Medicare Advantage? | You can either buy Medigap or enroll in a Medicare Advantage Plan, but you can’t have both. If you drop a Medigap policy to join a Medicare Advantage Plan, you have a single 12-month period to get your Medigap policy back. |
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What You'll Learn
Medicare Supplement Insurance (Medigap)
Medicare Supplement Insurance, also known as Medigap, is extra insurance offered by private health insurance companies to help pay your share of out-of-pocket costs in Original Medicare (Parts A and B). Medigap policies are standardized and, in most states, are named by letters, like Plan G or Plan K. The benefits offered by each lettered plan are the same, regardless of the insurance company, with the price being the only differentiating factor.
Medigap policies do not typically cover long-term care, such as nursing home stays, vision, dental, hearing aids, private-duty nursing, or prescription drugs. However, some Medigap policies offer coverage when you travel outside the United States. It's important to note that Medigap plans sold after 2005 do not include prescription drug coverage. If you require prescription drug coverage, you can join a separate Medicare drug plan (Part D).
To be eligible to purchase a Medigap policy, you generally need to have Original Medicare, which includes both Part A and Part B. If you are under 65, you may face restrictions or higher costs when purchasing a Medigap policy. Additionally, you cannot have both a Medigap policy and a Medicare Advantage Plan (Part C). If you switch from Medigap to a Medicare Advantage Plan, you will have a 12-month trial period during which you can revert to your Medigap policy if you choose to return to Original Medicare.
Medigap policies are automatically renewed annually as long as you pay your premiums. Your Medigap insurance company can only drop you under specific circumstances, such as non-payment of premiums or providing false information on your application.
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Medigap and Medicare Advantage
Medicare Advantage and Medigap (Medicare Supplement Insurance) are two ways to fill Medicare coverage gaps and control out-of-pocket costs. However, they are very different, and their unique types of coverage cannot be combined.
Medigap is supplemental insurance that can be purchased to cover out-of-pocket Medicare expenses such as deductibles and copayments. It is only available to those enrolled in Original Medicare (Part A and Part B) and is sold by private companies to fill "gaps" in Original Medicare. Medigap plans are standardized by the federal government and must be approved by the state's insurance regulator. Medigap offers unlimited choices for care, allowing you to see any doctor that accepts Medicare.
Medicare Advantage, also known as Part C, is an alternative to Original Medicare. It is an "all-in-one" policy offered by private insurance companies that bundles Medicare Part A, Part B, and often Part D (prescription drug coverage). Medicare Advantage plans often have lower monthly premiums but may require copays for doctor visits and hospitalizations. These plans usually have a provider network, and you may be restricted in which providers you can see.
When deciding between Medigap and Medicare Advantage, consider your priorities for flexibility, monthly premiums, and provider networks. It is important to note that you cannot have both Medigap and Medicare Advantage at the same time.
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Medigap and prescription drugs
Medigap, or Medicare Supplement Insurance, is extra insurance that helps pay your share of costs in Original Medicare (Parts A and B). Medigap policies are sold by private companies and are generally only available to those who have Original Medicare. Medigap policies do not cover long-term care, vision, dental, hearing aids, private-duty nursing, or prescription drugs.
If you want prescription drug coverage, you can join a separate Medicare drug plan (Part D). There are two ways to get prescription drug coverage through Medicare. The first is through a stand-alone Medicare Part D Prescription Drug Plan. The second option is to choose a Medicare Advantage plan (Part C) that provides prescription drug coverage, also known as a Medicare Advantage Prescription Drug plan (MAPD).
Prescription drug coverage is optional, and you may purchase it from private insurance companies that contract with Medicare. Some Medigap policies sold before January 1, 2006, provided limited prescription drug coverage, but these policies are no longer available. Any Medigap policies sold after this date do not include coverage for prescription drugs. If you have an older Medigap policy with Medicare prescription drug coverage, verify with your insurance company whether that coverage is creditable.
If your prescription drug coverage is not considered creditable, you have a few options. You can keep your Medigap policy and join a stand-alone Medicare Part D Prescription Drug Plan. However, you cannot have both a Medicare Part D Prescription Drug Plan and a Medigap policy with prescription drug coverage. If you join a Medicare Part D Prescription Drug Plan, you must ask your Medigap insurance company to remove the prescription drug coverage from your Medigap policy and adjust your premium. Alternatively, you can disenroll from your Medigap plan and get all of your approved Medicare coverage (Medicare Part A, Part B, and Part D) through a Medicare Advantage Prescription Drug plan.
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Medicare Advantage and prescription drugs
Medicare Advantage, also known as Part C, is an alternative to Original Medicare. It is offered by private companies that contract with Medicare and provide Part A and Part B benefits. Most Medicare Advantage plans include prescription drug coverage (Part D), and these plans are called MA-PD plans.
When choosing an MA plan, it is important to understand how prescription drug coverage works in an MA-PD plan. During the Medicare Annual Enrollment Period (October 15 to December 7), you can explore prescription drug plans. MA-PD plans cover a variety of brand-name and generic prescription drugs, and each plan has a list of covered drugs called a "formulary," which can vary in cost and specific drugs covered.
Most plans have a monthly premium that you pay in addition to your Part B premium, and you will also pay other costs when you get prescriptions. Plans divide the covered drugs on their formulary into groups or "tiers" based on cost, with lower-tier drugs costing less than higher-tier drugs. To save money, you can choose generic drugs whenever possible, as they can cost significantly less than brand-name drugs but work just as well. You can also use a preferred pharmacy, which provides discounted services and supplies, and order a larger supply of medications to reduce costs.
It is important to note that you cannot have both a Medicare Advantage Plan and a Medigap policy, which is supplemental insurance that helps pay your share of costs in Original Medicare. Medigap policies sold after 2005 do not include prescription drug coverage, so if you want prescription drug coverage, you can join a separate Medicare drug plan (Part D).
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When to buy Medigap
Medigap is extra insurance that helps pay your share of out-of-pocket costs in Original Medicare. Generally, you must have Original Medicare (Part A and Part B) to buy a Medigap policy. The best time to buy a Medigap policy is during your Medigap Open Enrollment Period. This is a 6-month period that starts on the first day of the month you're 65 or older and signed up for Part B. After this period, your options to buy a Medigap policy may be limited and the policy may cost more.
Some states allow anyone with Medicare under 65 to buy a Medigap policy. However, federal law doesn't require companies to sell Medigap policies to people under 65. Some states only let you buy a Medigap policy if you're eligible for Medicare because of ESRD or a disability. If you have ESRD or a disability, you may not be able to buy the Medigap policy you want, or any Medigap policy, until you turn 65.
During your open enrollment period, Medigap companies must sell you a policy at the best available rate, regardless of your health status, and they cannot deny you coverage. The best available rate may depend on factors like your age, gender, whether you smoke, your marital status, and where you live. If you purchase a Medigap policy during your open enrollment period, policies are limited in their ability to exclude coverage for pre-existing conditions.
If you drop a Medigap policy to join a Medicare Advantage Plan for the first time, you have a single 12-month period (your trial right period) to get your Medigap policy back. If your previous Medigap policy is no longer available, you can buy a different Medigap policy that's sold by an insurance company in your state. You may also have an opportunity to enroll in a Medicare drug plan at this time.
You have 63 days after your current Medigap coverage ends to buy a new Medigap policy. You may need to include copies of relevant documents with your new Medigap application to prove you have the right to buy a new policy. Your state may have additional periods when you can buy Medigap policies regardless of your health. For example, Connecticut, Massachusetts, and New York allow you to buy a Medigap policy at any time, even with pre-existing conditions.
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Frequently asked questions
Medicare Supplemental Insurance, or Medigap, is an optional add-on that can fill “gaps” in Medicare Part A and Part B. It is extra insurance you can buy from a private company that helps pay your share of costs in Original Medicare.
Medicare Part D is a separate drug plan that covers a variety of brand-name and generic prescription drugs. Each plan has a list of covered drugs, called a "formulary", that can vary in cost and specific drugs covered.
No, you cannot have both. 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.
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