How Does a Medigap Policy Work?

Before we can understand how the Medigap policy works, we first need to know what it is. A Medigap plan is health insurance sold by private insurance companies that supplements services or benefits that are not covered by the Original Medicare (Part A and Part B). It literally fills-in the "gaps" left by Medicare. This is why it is commonly referred to as either a Medigap plan or Medicare Supplement plan.

The Center for Medicare and Medicaid Services (CMS) has standardized these plans in an attempt to make them more consumer friendly. These plans are often referred to as "Plan" and a following letter; i.e. Plan A through F, Plan G, Plan K, Plan L, Plan M, and Plan N. Each plan covers a variety of services that Medicare does not cover completely. As you move up from A to N, plans generally cover more services as you go higher in the alphabet. Drug coverage is not included with your Medigap Plans because of the Medicare Part D prescription drug coverage.

To be an eligible Medigap plan beneficiary, the individual is required to be enrolled in Medicare Part A and Part B. Often beneficiaries find themselves selecting a plan when they turn 65. Those turning 65 have a window of opportunity to enroll in a Medigap plan with no health questions or exams. This window is 3 months before the month you turn 65 and 3 months after the month you turn 65. So some one turning 65 in September would be eligible to apply between June and December. Seniors working past 65 with company coverage can apply when they retire. They also receive the opportunity to enroll with no health questions or exams.

Each Medigap policy only covers one person, for married couples, each spouse must purchase a separate Medigap policy. As a standard rule, a Medigap policy cannot be cancelled or revoked by the insurance company for as long as the beneficiary is still paying the monthly premium.

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