What's Medicare Supplement Insurance (Medigap)?

A Medicare Supplement Insurance (Medigap) policy helps pay some of the health care costs that Original Medicare doesn't cover, like:
  • Copayments
  • Coinsurance
  • Deductibles

Medigap policies are sold by private companies.

Some Medigap policies also cover services that Original Medicare doesn't cover, like medical care when you travel outside the U.S. If you have Original Medicare and you buy a Medigap policy, here's what happens:
Medicare will pay its share of the Medicare-approved amount for covered health care costs.  Then, your Medigap policy pays its share.

8 things to know about Medigap policies ...

  • You must have Medicare Part A and Part B.
  • A Medigap policy is different from a Medicare Advantage Plan.  Those plans are ways to get Medicare benefits, while a Medigap policy only supplements your Original Medicare benefits.
  • You pay the private insurance company a monthly premium for your Medigap policy. You pay this monthly premium in addition to the monthly Part B premium that you pay to Medicare.
  • A Medigap policy only covers one person. If you and your spouse both want Medigap coverage, you'll each have to buy separate policies.
  • You can buy a Medigap policy from any insurance company that's licensed in your state to sell one.
  • Any standardized Medigap policy is guaranteed renewable even if you have health problems. This means the insurance company can't cancel your Medigap policy as long as you pay the premium.
  • Some Medigap policies sold in the past cover prescription drugs. But, Medigap policies sold after January 1, 2006 aren't allowed to include prescription drug coverage. If you want prescription drug coverage, you can join a Medicare Prescription Drug Plan (Part D).
  • It's illegal for anyone to sell you a Medigap policy if you have a Medicare Advantage Plan, unless you're switching back to Original Medicare.

Medigap policies don't cover everything...
  • Medigap policies generally don't cover long-term care, vision or dental care, hearing aids, eyeglasses, or private-duty nursing.
  • Insurance plans that aren't Medigap
  • Some types of insurance aren't Medigap plans, they include:
  • Medicare Advantage Plans (like an HMO, PPO, or Private Fee-for-Service Plan)
  • Medicare Prescription Drug Plans
  • Medicaid
  • Employer or union plans, including the Federal Employees Health Benefits Program (FEHBP)
  • TRICARE
  • Veterans' benefits
  • Long-term care insurance policies
  • Indian Health Service, Tribal, and Urban Indian Health plans

Dropping your entire Medigap policy (not just the drug coverage) 
You may want a completely different Medigap policy (not just your old Medigap policy without the prescription drug coverage). Or, you might decide to switch to a Medicare Advantage Plan that offers prescription drug coverage.

If you decide to drop your entire Medigap policy, you need to be careful about the timing. When you join a new Medicare drug plan, you pay a late enrollment penalty if one of these applies:
  • You drop your entire Medigap policy and the drug coverage wasn't creditable prescription drug coverage
  • You go 63 days or more in a row before your new Medicare drug coverage begins


Medicare Advantage Plans

A type of Medicare health plan offered by a private company that contracts with Medicare. Medicare Advantage Plans provide all of your Part A and Part B benefits. Medicare Advantage Plans include:
  • Health Maintenance Organizations
  • Preferred Provider Organizations
  • Private Fee-for-Service Plans
  • Special Needs Plans
  • Medicare Medical Savings Account Plans

If you’re enrolled in a Medicare Advantage Plan:
  • Most Medicare services are covered through the plan
  • Medicare services aren’t paid for by Original Medicare

Most Medicare Advantage Plans offer prescription drug coverage.

Questions to ask when looking for a plan...
  • Before choosing a Medicare Advantage Plan, you may want to compare several plans by asking them these questions:
  • What's my share of the costs for services and supplies?
  • Does the plan have a network of providers for some or all types of services? (You can still see providers who aren't part of the plan's network if they accept the plan's payment terms. But, you may pay more.)
  • Does the plan offer benefits Original Medicare doesn't cover, like vision, hearing, dental, or prescription drug coverage? (You may have to pay more for these extra benefits.) If the plan doesn't offer drug coverage, you can get coverage by joining a Medicare Prescription Drug Plan (Part D) .
  • Contact the plan if you don't find these answers in its publications or on its website.