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What is Medicare Supplement (Medigap) Insurance?

If you’re new to Medicare, you might be surprised to learn that the program doesn’t necessarily cover all of your health costs.

The good news? You can purchase Medigap policies that can help fill in these coverage “gaps.” But what are some essential basics that you need to know? How much do Medigap policies cost? Do you even need one in the first place?

These are just a few of the questions the team at IHS Insurance Group will help you answer in this quick article.

How Does Medigap Insurance Work?

Medicare Part A only provides coverage for about 80 percent of hospital stays, doctor’s visits, and medical procedures, and offers zero coverage for dental care, prescription drug costs, and so forth. Here’s where Medigap enters the picture.

HMOs or PPOs offer Medigap plans to help cover the “gap” left by Medicare for costs related to copayments, coinsurance, and deductibles. These plans are numbered A-N, with each one offering different coverages for things like Part A and Part B, hospice, skilled nursing, and out-of-pocket limits.

IHS Pro Tip: Medigap Plan F is the most popular for several reasons: it includes coverage for most out-of-pocket expenses (deductibles, coinsurance, copayments), covers Part B excess charges, features coverage for foreign travel, offers comprehensive coverage, and features a high-deductible option.

Do You Need Medigap Insurance?

If you have Original Medicare, most professionals recommend purchasing a Medigap plan, since your current coverage will have some significant gaps that could leave you with many more out-of-pocket costs than necessary (not to mention, from an affordability perspective).

What’s the Difference Between Medigap Insurance & a Medicare Advantage Plan?

According to Investopedia, roughly 80 percent of Medicare recipients “supplement their insurance with Medigap (Medicare Supplemental), Medicaid, employer-sponsored and/or Part D prescription drug policies.” So, from a sheer popularity standpoint, many more individuals choose Medigap plans over Advantage plans.

However, it’s essential to keep in mind that the Medigap option is often more expensive, especially when it comes to prescription drug coverage. The good news is that you can often visit any doctor in the US who participates in Medicare, forego preauthorization requirements, and avoid having to obtain referrals to see a specialist.

Comparatively, Medicare Advantage plans often cost less. The trade-off for lower premiums is that Part C plans frequently limit you to in-network doctors and hospitals (even within specific geographical locations), and you might not have benefits for extras like eyeglasses, dental care, or gym memberships.

The bottom line is that each insurance company offers different coverage levels at different prices. Hence, you must consider your budget, your preferred doctors, convenience, how often (and where) you travel, and your current level of health when deciding between a Medigap or Medicare Advantage plan.

Then, once you have these critical factors in front of you, you can compare plans side-by-side.

Related: 8 Questions to Help You Choose Your Best Medicare Plan

How Much Does Medicare Medigap Insurance Cost?

Like any other type of health insurance policy, how much you pay for your Medigap plan can depend on a wide variety of factors, including the insurer you choose, as well as the specific Medigap insurance coverage you opt for.

Furthermore, the older you are, the more you’ll pay for Medigap coverage. Residents of some states will pay less than others, and purchasing your plan during open enrollment will typically result in less expensive premiums. Even factors like current inflation can impact what you pay.

With all of these details in mind, according to Business Insider’s Hillary Hoffower, “The national average cost for Medigap Plan F is $1,712 annually, which is around $143 a month.”

Can You Enroll in a Medigap Plan at Any Time?

The official Medicare website points out that the best time to purchase coverage is during your 6-month Medigap Open Enrollment Period, which begins on the first day that your Part B coverage goes into effect. This way, you’ll have more coverage options and generally lower premiums.

Outside of this enrollment period, the number of companies willing to insure you could shrink, depending on their underwriting requirements. And in some instances, the carriers that do accept you might charge higher rates.

IHS Pro Tip: According to the Medicare.gov website:

“As of January 1, 2020, Medigap plans sold to new people with Medicare aren’t allowed to cover the Part B deductible. Because of this, Plans C and F are not available to people new to Medicare starting on January 1, 2020. If you already have either of these two plans (or the high deductible version of Plan F) or are covered by one of these plans before January 1, 2020, you’ll be able to keep your plan. If you were eligible for Medicare before January 1, 2020, but not yet enrolled, you may be able to buy one of these plans.”

Related: Will I Get to Keep My Plan F Medicare Supplement After January 2020?

Would You Like to More Information About Medigap Insurance?

The IHS Insurance Group team has decades of combined experience helping our clients choose the best Medigap coverage solutions for their needs, and at prices they can afford.

Need a FREE Quote or have questions regarding Medicare or Medigap Coverage? We have three convenient ways to reach us:

  1. If you prefer to talk to a licensed agent directly, please call (866) 480 5063.
  2. If you prefer to fill out a quick form and have an agent get back with you at your convenience, use the GET A FREE QUOTE.
  3. Lastly, for those that want an immediate quote, please click HERE.

Also, check out our Medicare FAQ’s here.

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