What is a Medicare Supplement (Medigap) plan?
A Medigap plan, also known as Medicare Supplement Insurance, is a policy offered by private insurers to help cover some of the health care costs that Original Medicare (Parts A and B) doesn't cover. These costs can include copayments, coinsurance, and deductibles. To be eligible for a Medigap plan, you must be enrolled in Original Medicare (Parts A and B).
What is the difference between Medigap and Medicare Advantage plans?
Both Medicare Advantage and Medigap are supplemental options to enhance your Original Medicare plan.
Medicare Advantage plans: Medicare Advantage plans work similarly to individual or employer HMO or PPO plans. They help lower out-of-pocket costs with predictable copayments, smaller deductibles and out-of-pocket costs. You can also save money by seeing doctor's withing the plan's network.
Medigap plans: On the other hand, Medigap plans work alongside your Original Medicare to cover most or all of your out-of-pocket costs that Original Medicare doesn't cover, like copayments, coinsurance and deductibles. Medigap plans offer more flexibility in choosing doctors, because you can go to anyone who accepts Medicare. While Medigap plans come with higher monthly premiums, you will pay less (or nothing) when you receive care. Unlike Medicare Advantage plans, Medigap plans do not include prescription drug coverage, so you would have to purchase a separate Part D plan for that.
It’s important to remember that these two plans do not work together. If you have a Medicare Advantage policy, you cannot enroll in a Medigap plan, and vice versa.
Is a Medigap plan right for me?
For many people, the choice between these two plans comes down to price. Ask yourself questions like:
- Do I need the stability of a higher monthly cost with little to no money spent out of pocket?
- Can I afford to pay some costs out of pocket, as long as they are less costly and more predictable than with Medicare Part B alone?
A Medigap plan might be right for you if you:
- Don't mind paying a higher monthly premium, but paying less - or nothing - when you get medical care
- Live outside of Michigan for more than a month each year and want to seek routine health services when you're away
- Don't want to worry about staying in-network for your services to be covered, because Medigap plans don’t use networks
- Don’t mind having a stand-alone Part D prescription drug plan
Medigap policies
There are 10 standard Medigap plans (named A through N), but not all insurance companies offer all plans. Priority Health offers Plans A, C, D, F, G and N. Plan A covers the least, and Plan F (one of the most popular plans) covers the most.
In addition to comparing what you'll pay in monthly premiums, you should look at what you'll pay toward copayments, coinsurance and deductibles. And remember, Medigap plans don't include prescription coverage.