If you're new to Medicare, learning the ins and outs of the program can be confusing -- and downright exhausting even. But there's another program you may want to familiarize yourself with if you're new to Medicare -- Medigap.
Medigap plans are plans sold by private insurers that serve as supplemental insurance for those enrolled in Medicare. During your initial Medigap enrollment window, which is six-months starting the first month you have Medicare Part B and you're 65 or older, you cannot be denied Medigap coverage due to pre-existing conditions.
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Buying a Medigap plan could be a smart thing to do as a Medicare enrollee. Here are some things you should know about Medigap plans.
1. They won't cover services Medicare won't
When you receive care through Medicare, Parts A and B don't pick up the entire tab. This year, there's a $1,632 deductible under Part A if you're admitted for a hospital visit. And with Part B, not only is there an annual deductible of $240, but usually, Part B only pays 80% of your charges, leaving you to cover the remaining 20%.
The upside of having a Medigap plan is that your policy might pick up the tab for those deductible and coinsurance costs, thereby easing the financial burden on you. That said, Medigap plans won't pay for services Medicare itself doesn't cover.
Original Medicare does not pay for routine dental care or eye exams, for example. If you sign up for Medigap, don't expect that plan to pay for them, either.
2. Costs can vary for the same plan
There are 10 different Medigap plan choices offered in most states, named by letters A, B, C, D, F, G, K, L, M, and N. Coverage under each respective Medigap plan is standardized -- meaning, if you sign up for Plan A, you get the same benefits as someone else with Plan A.
That said, pricing for Medigap plans isn't standardized. This means that you might pay more for Plan A than another enrollee depending on factors that include where you live, your age, and your health.
3. Medigap only works with original Medicare
Some Medicare enrollees decide that they'd rather sign up for Medicare Advantage as an alternative to original Medicare (Parts A and B plus a Part D drug plan). Enrollees in Medicare Advantage can incur a number of out-of-pocket costs. However, Medigap plans are not compatible with Medicare Advantage. You can only sign up for Medigap coverage if you're enrolled in original Medicare.
Now you may decide to sign up for Medicare Advantage as a new enrollee. If that doesn't work out, you'll generally have the option to switch to original Medicare at some point. But in that scenario, you might struggle to get supplemental insurance if you're beyond your initial Medigap enrollment window.
There's lots to know
All told, navigating the world of Medigap can be a time-consuming process, especially since there are so many different plans to choose from. Take the time to explore your options. And if you decide to buy a Medigap plan, shop around so you can hopefully snag the best possible rate.
