Medicare Supplemental Insurance

Medicare supplemental insurance (also commonly referred to as Medigap) is an insurance plan used to cover gaps in regular Medicare insurance coverage. Medicare, the federal plan that provides healthcare to residents 65 years and older, pays for basic medical needs after a deductible is met (coinsurance also applies).

A Medicare supplemental insurance plan helps cover other medical services Medicare doesn’t, and the level of coverage depends on the plan selected.

Currently, there are 12 standardized Medicare supplemental policies to choose from, although not all 12 plans are available in every state. Policies are also offered through private insurance companies, and not the federal government. There are specific requirements for applying for a Medicare supplemental plan, and here the top items you need to know:

  1. You must have Medicare Part A and Part B
  2. You may not be enrolled in a Medicare Advantage Plan (if you are, you need to cancel the Advantage Plan before buying a supplement plan.
  3. You have to pay twice each month – once to the private insurance company you have your supplemental insurance policy through, and once to Medicare. Payments cannot be combined.
  4. A Medicare supplemental policy only covers one individual, just like regular Medicare. Spouses must be on separate plans.
  5. Any Medicare supplemental policy is guaranteed to renew each year, even if you have health problems. You cannot be canceled as long as you pay your balance each month.
  6. Medicare supplemental policies do not include prescription drug coverage. Prescription drug coverage is only available through the Medicare Prescription Drug Plan (Part D).
  7. You are not allowed to have a Medicare supplemental plan if you have a Medicare Medical Savings Account (MSA) Plan.

Ultimately, both original Medicare and a Medicare supplemental plan work hand in hand in order to provide for your financial and medical needs.