Understanding Medigap Policies: What You Need to Know

As people approach age 65, many start to consider how Medicare will cover their health care needs. While Medicare provides essential coverage, it doesn’t pay for everything. That’s where Medigap policies come in. If you or a loved one is enrolled in Medicare, understanding how Medigap policies work can be an important part of your long-term health and financial planning.

What Is a Medigap Policy?

A Medigap policy, also known as Medicare Supplement Insurance, is private health insurance that helps fill the “gaps” in Original Medicare coverage. These gaps include out-of-pocket costs such as deductibles, coinsurance, and copayments. Medigap policies are sold by private companies and are standardized into plans labeled A through N, each offering a different set of benefits.

Medigap policies only work with Original Medicare (Parts A and B). If you have a Medicare Advantage Plan (Part C), you cannot use a Medigap policy to cover those costs.

What Does Medigap Cover?

Depending on the plan you choose, Medigap may cover:

• Part A coinsurance and hospital costs
• Part B coinsurance or copayments
• First three pints of blood
• Skilled nursing facility care coinsurance
• Foreign travel emergency care (up to plan limits)

However, Medigap policies do not cover long-term care, vision or dental services, hearing aids, or prescription drugs. For prescription drug coverage, you will need to enroll in a separate Medicare Part D plan.

How to Enroll in a Medigap Plan

The best time to buy a Medigap policy is during your Medigap Open Enrollment Period. This six-month window begins the first month you’re 65 or older and enrolled in Medicare Part B. During this period, you can buy any Medigap policy sold in your state without being denied coverage or charged more because of pre-existing conditions.

After this enrollment window closes, your options may become limited, and insurers may use medical underwriting to decide whether to accept your application and how much to charge you.

To learn more about Medigap plans, visit the official Medicare website HERE.

Planning Ahead

Choosing the right Medigap plan can provide peace of mind by reducing your out-of-pocket health care costs in retirement. It can also play an important role in elder law and estate planning strategies, especially when budgeting for long-term care and preserving family assets.

Want to learn more about protecting your assets from long term care costs and preserving a legacy for your family? Schedule a free 15-minute discovery call with our team to learn more.