A Medigap policy is health insurance sold by private insurance companies to fill the “gaps” in Original Medicare coverage. Medigap policies pay secondary to Original Medicare and help pay your share (coinsurance, copayments, or deductibles) of the costs of Medicare-covered services. Policies are “standardized” in most states by letters A through D, F through G, and K through N.
All policies offer the same basic benefits, but some offer additional benefits. The best time to buy a Medigap policy is during your Medigap “Open Enrollment Period”. This 6-month period begins on the first day of the month in which you’re 65 or older and enrolled in Part B. (Some states have additional Open Enrollment Periods.)
Advantages
- Enjoy lower or zero co-pays and deductibles for Medicare A & B covered medical expenses
- You are guaranteed the right to buy a Medigap plan during your open enrollment period
- You can pick from various different policy options to get one that suits your needs best
- A standardized policy is guaranteed renewable, even if you have health problems
- Choose any doctor or hospital that accepts Medicare patients
Disadvantages
- Plan premiums can change from year to year
- Older beneficiaries pay higher premiums because plans are age- rated and can go up every year. Premiums may also go up because of inflation and other factors.
- You must purchase a separate Medicare Part D prescription drug plan if you decide you would like to add drug coverage
- After your open enrollment period, insurers can refuse coverage or charge you a higher premium based on your health, or make you wait to get coverage for an illness you already have
