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What Is A Medigap Policy?

A Medigap policy is a health insurance policy sold by private insurance companies to fill the “gaps” in the Original Medicare Plan. Medigap policies help you pay some of the health care costs that the Original Medicare Plan doesn’t cover. If you are in the Original Medicare Plan and have a Medigap policy, then Medicare will pay its share and your Medigap policy will pay its share of your health care costs.

Currently, there are ten standardized Medigap plans called “A” through “J.” Medigap policies must follow Federal and State laws. These laws protect you. The front of a Medigap policy must clearly identify it as “Medicare Supplement Insurance.” Each plan, A through J, has a different set of benefits. Plan A covers only the basic (core) benefits. These basic benefits are included in all the Medicare plans (A through J). Medigap Plans B through J offer extra benefits. Plan J offers the most benefits. Insurance companies can only sell you one of the ten standardized Medigap policies.

Medigap policies are standardized so you can compare them easily. Two of the standardized Medigap policies may have a high deductible option. In addition, any standardized Medigap policy may be sold as a Medicare SELECT policy. No matter where you live (except for Massachusetts, Minnesota, and Wisconsin) Medigap policies must offer the same benefits within Medigap plans (A through J).

It’s important to compare Medigap policies because costs can vary. Remember, the standardized Medigap policies that insurance companies offer must provide the same benefits. The only difference between Medigap policies sold by different insurance companies might be the cost. Also, insurance companies that sell Medigap policies don’t have to offer each Medigap plan (A through J). Each insurance company decides which Medigap policies they want to sell. Make sure the insurance company offers the Medigap policy that you want.

Generally, when you buy a Medigap policy you must have Medicare Part A and Part B. You will have to pay the monthly Medicare Part B premium of $78.20 in 2005 to Medicare. In addition, you will have to pay a premium to the Medigap insurance company. As long as you pay your premium, your Medigap policy is guaranteed renewable. This means it is automatically renewed each year. Your coverage will continue year after year as long as you pay your premium.

You and your spouse must buy separate Medigap policies. Your Medigap policy won’t cover any health care costs for your spouse.

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