Medigap: Medicare supplemental insurance
Back to Supplementing Medicare
On this page:
- Overview of Medigap policies
- Basic benefits
- Standardized Medigap plans A-J
- Standardized Medigap plans K & L
- Health screening
- Waiting periods
- Medicare SELECT
1. Overview of Medigap Policies
Medicare has several gaps and doesn't cover all the health care services you may need. A private Medicare Supplement or Medigap policy sold by insurance companies is one option for supplementing, or filling the gaps in Medicare. Medigap policies pay for part or all of Medicare's co-payments and deductibles. Some may also cover other health care costs that Medicare doesn't pay for, such as health care costs incurred while traveling outside the U.S. or excess charges when seeing a provider who does not accept Medicare assignment.
A Medigap plan is guaranteed to be renewable as long as the premium is paid. It cannot be canceled because of your health condition or for any other reason except if you don't pay the premium.
By law, companies can offer only 12 standardized Medigap benefit packages, referred to as plans A through L. A standardized plan means that the benefits are the same regardless of which company sells it. For example, Medigap Plan F has the same benefits no matter which company sells it.
A high deductible rider can also be sold with Plans F and J, which means that the policy will pay only after you have met the annual deductible ($1,900 in 2008). Once the deductible is met, the plan pays its benefits for the rest of that year. The annual deductible increases each year. (See chart below for details)
The California Department of Insurance regulates insurance companies that sell most Medigap policies. The Department of Managed Health Care regulates Medicare SELECT policies, which are a combination of a Medigap policy and a managed care plan. See below for information on Medicare SELECT.
All Medigap plans are sold through licensed insurance agents, by sponsoring groups or through the mail. Retiree plans offered by former employers or unions do not have to conform to these standardized requirements and are not called Medigap policies, even though they may work in a similar way to supplement Medicare.
Note: If you receive full Medi-Cal benefits you do not need a Medigap policy; in fact it is illegal for companies to sell you one. If you already have a Medigap policy when you become eligible for Medi-Cal, you have the option of keeping it to see providers that don’t take Medi-Cal, or placing your policy on hold for up to 24 months. If you have Medi-Cal with a share of cost (SOC), you do have the option of buying a Medigap policy.
2. Basic Benefits in All A - J Plans
Medigap plans A – J must offer the following basic benefits:
- Co-insurance for hospital days 61-90 ($256/day in 2008) and co-insurance for the 60 lifetime reserve days ($512/day in 2008).
- 100% of the cost of hospital care beyond 150 days covered by Medicare, up to a maximum of 365 lifetime days.
- 20% co-insurance for Medicare approved charges after the $135 annual Part B Medicare deductible has been met.
- The first 3 pints of blood in each calendar year.
Plan A has only the basic benefits.
3. Standardized Medigap Plans A-J
| A | B | C | D | E | F* | G | H | I | J* | |
|---|---|---|---|---|---|---|---|---|---|---|
| Basic Benefits: All Part A hospital co-insurance plus 100% of costs for a lifetime maximum of 365 additional hospital days; Part B co-insurance (20% of the Medicare-approved amount); first 3 pints of blood in a calendar year | X | X | X | X | X | X | X | X | X | X |
| Part A Hospital Deductible: First day deductible, $1,024 in 2008 (per benefit period)** |
X | X | X | X | X | X | X | X | X | |
| Skilled Nursing Facility (SNF) Co-payment: $128 per day for days 21-100 of Medicare covered stay in a skilled nursing facility (per benefit period)** | X | X | X | X | X | X | X | X | ||
| Part B Deductible: First $135 of Part B services each year | X | X | X | |||||||
| Part B Excess Charges: 80% or 100% of the limiting charge (15% of the Medicare-approved amount -- physicians who do not accept assignment can add this amount) | 100% | 80% | 100% | 100% | ||||||
| Foreign Travel Emergency Care: 80% of emergency care during the first 2 months of each trip outside the USA after a $250 deductible, for a lifetime maximum of $50,000 | X | X | X | X | X | X | X | X | ||
| At-Home Recovery Maximum of $40/visit up to $1,600 a year, while receiving Medicare-covered home health care, or up to 8 weeks of home care after Medicare covered home care ends |
X | X | X | X | ||||||
| Preventive Care: $120/year for preventive care not covered by Medicare | X | X |
* Plans F and J may be sold with a high deductible option of $1,900 in 2008. The benefits remain the same, but the deductible must be met each year before any claims will be paid.
** A “benefit period” begins the day you are admitted into a hospital or a SNF and ends after a period of 60 consecutive days following discharge during which you were neither an inpatient of a hospital nor a SNF.
NOTE: Since January 1, 2006 when Medicare Prescription Drug Coverage (Part D) began, Plans H, I and J are no longer sold with drug coverage.
Medigap plans K and L are structured differently than Medigap Plans A-J.
4. Standardized Medigap Plans K and L
| K | L | |
|---|---|---|
| Part A Hospital Deductible | 50% | 75% |
| SNF Co-payment | 50% | 75% |
| Hospice Cost-Share | 50% | 75% |
| First 3 Pints of Blood | 50% | 75% |
| Part B Co-insurance | 50% | 75% |
| Part B Annual Deductible (3) | 0 | 0 |
| Part B Excess Charges | 0 | 0 |
| Total Out-of-Pocket Limit | $4,440 (4) | $2,220 (5) |
(3) Your payment of the Part B annual deductible is credited towards the Annual Out-of-Pocket Limit of each plan.
(4) After you have paid $4,440 in out-of-pocket expenses for covered benefits during a calendar year, the plan then pays 100% of any remaining covered benefits for the remainder of that calendar year. The Part B deductible ($135 in 2008) is not a covered benefit but it does count towards the $4,440 out-of-pocket limit. Part B excess charges are not a covered benefit and payment of Part B excess charges does not count toward the $4,400 out-of-pocket limit.
(5) After you have paid $2,220 in out-of-pocket expenses for covered benefits during a calendar year, the plan then pays 100% of any remaining covered benefits for the remainder of that calendar year. The Part B deductible ($135 in 2008) is not a covered benefit but it does count towards the $2,220 out of pocket limit. Part B excess charges are not a covered benefit and payment of Part B excess charges does not count toward the $4,400 out-of-pocket limit.
5. Health Screening
You may apply for a Medigap policy at any time, but companies selling Medigap plans can refuse to sell you a plan because of a past or current health condition. Insurance companies may require that you go through health screening before deciding to sell you a Medigap policy. There are certain times however when, by law, companies must sell you a Medigap plan regardless of your health condition. These times are called “Open Enrollment,” which is 6 months starting with your Medicare Part B effective date, and “Guaranteed Issue” periods, which follow specific events that result in the loss of existing coverage.
For more information on the Medigap open enrollment period and guaranteed issue rights, see our section on Your rights to buy Medigap policy.
Note: Medicare beneficiaries younger than 65-years-of-age who have Medicare because of a disability, have the right to buy a Medigap policy during the first 6 months of having Medicare Part B, unless they have End Stage Renal Disease (ESRD). Companies are allowed to charge a higher premium for people who are not yet 65 years old. For more information, please see our section on “Medicare for People with Disabilities."
6. Waiting Periods
Some companies impose a waiting period before paying benefits for a pre-existing condition. This waiting period cannot last more than 6 months, and it applies only to those conditions that were treated during the 6 months prior to purchasing the policy. Companies may impose this waiting period when a beneficiary buys a Medigap policy during his/her open enrollment period.
Note: If you had health coverage during the 6 months prior to purchasing a Medigap plan, however, the company cannot impose a waiting period. If you are in a guaranteed issue period or you are buying a new Medigap policy to replace another Medigap plan, the company cannot impose any waiting period for your new policy regardless of your health condition.
7. Medicare SELECT
Some insurance companies offer Medigap policies called Medicare SELECT plans. These Medigap plans are a combination of a Medigap policy and a Preferred Provider Organization (PPO) plan. A PPO is a group or network of providers who have agreed to limit their charge to enrollees who utilize providers in the network. Medicare SELECT plans must cover the benefits listed in Medigap policies A-J if you use the plan's network to give you care. This is different from standard Medigap policies, where you can see any doctor or use any hospital that accepts Medicare payment. Some Medicare SELECT policies may also require you to pay a small co-payment when you visit a doctor, a feature that is not allowed in other standardized Medigap polices. If you use providers outside the network, you may have to pay most or all of the cost for the services you use.
Back to Supplementing Medicare
Page updated May 8, 2008