If you are eligible for Medicare or about to enroll, you may need to purchase supplemental health insurance. Medicare Parts A and B generally won’t cover all of your medical expenses. Typically, you’ll have to satisfy a deductible before Medicare pays anything, and you’ll also pay a co-payment when you visit a physician or are admitted to the hospital.
Fortunately, you can buy supplemental insurance—commonly referred to as “Medigap” plans—that will help you plug the gaps in your Medicare coverage. In this case, you’ll pay a private insurance company a monthly premium in addition to the monthly premium you pay for Medicare Part B. Medigap plans are sold by private insurance companies and are designed to assist you with out-of-pocket costs such as deductibles, copays and coinsurance. These plans are available in all 50 states and can vary in premiums and enrollment eligibility.
Medigap plans are regulated and standardized by the federal government; however, all of the standardized plans may not be available in your area. There are eight different plans that can be sold to individuals new to Medicare, although your state may not offer all of them (three states—Massachusetts, Minnesota and Wisconsin—have their own standardized plans).
How to Enroll in a Medigap Plan
The Initial Enrollment Period is a limited window of time when you can enroll in Original Medicare (Part A and/or Part B) when you are first eligible. Only after you are enrolled in Medicare can you select other coverage options, like a Medigap plan, from approved private insurers.
The open enrollment period for Medicare runs from October 15 through December 7 on an annual basis. The open enrollment period for a Medigap policy typically is the six-month period that starts the first day of the month that you turn 65 or older and are enrolled in Medicare Part B. After this period, your ability to buy a Medigap policy may be limited, and it may be more costly. Each state handles things differently, but there are additional open enrollment periods in some cases.
How Medicare Works With Other Insurance
If you have Medicare and other health insurance (like from a group health plan, retiree coverage or Medicaid), each type of coverage is called a "payer." When there's more than one payer, "coordination of benefits" rules decide who pays first. The "primary payer" pays what it owes on your bills first, and then sends the rest to the "secondary payer" to pay. In some rare cases, there may also be a third payer.
The insurance that pays first (primary payer) pays up to the limits of its coverage. The one that pays second (secondary payer) only pays if there are costs the primary insurer didn't cover. The secondary payer, which may be Medicare, may not pay all the remaining costs. If your group health plan or retiree coverage is the secondary payer, you may need to enroll in Medicare Part B before they'll pay.
If the insurance company doesn't pay the claim promptly (usually within 120 days), your doctor or other provider may bill Medicare. Medicare may make a conditional payment to pay the bill, and then later recover any payments the primary payer should've made. Once you are enrolled in a Medigap plan, it renews every year as long as you pay your premium and the plan is available. You are typically allowed to switch your Medigap plan, but the timing may vary from state to state. And if you do change plans, you will likely have to fill out a new application and answer health questions.
Conclusion
Whatever plan you choose, it is important to make sure that you have enough coverage to avoid troubling situations in the future. After you buy a policy, you have the right to cancel it within a certain amount of time (usually 30 days, sometimes longer) if you don't like the policy. In addition, the policy must be guaranteed renewable and cannot duplicate existing coverage, including Medicare.
To make sure claims are properly paid, let your health provider know when you have health insurance in addition to Medicare. Note that if you have a Medicare Advantage (Part C) plan, you don't need a Medigap plan, and it's illegal for anyone to sell you one unless you're in the process of switching back to Original Medicare. However, Plans C and F are not available if you turned 65 on or after January 1, 2020.
To learn more about Medigap plans and compare options, visit the Health Care Financing Administration's website at medicare.gov.
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