What is Medigap Insurance?
A Medigap (also called “Medicare Supplement Insurance”) policy is a private health insurance that is designed to supplement Original Medicare. This means it helps pay some of the health care costs (“gaps”) that Original Medicare doesn't cover (like copayments, coinsurance and deductibles). If you are in Original Medicare and you have a Medigap policy, Medicare will pay its share of the Medicare approved amts. for covered health care costs. Then your Medigap policy pays its share. (Note: Medicare doesn't pay any of the cost for you to get a Medigap Policy.)
Every Medigap policy must follow federal and state laws designed to protect you and it must be clearly identified as “Medicare Supplement Insurance.” Medigap insurance companies can only sell you a “standardized” Medigap policy identified by letters A thru N. Each standardized Medigap policy must offer the basic benefits, no matter what insurance company sells it. Cost and customer service are usually the only differences between Medigap policies sold by different companies.
New or Innovative Benefits. An issuer may, with the prior approval of the director of the State Dept of Insurance, offer policies or certificates with new or innovative benefits in addition to the standardized benefits provided in a policy or certificate that otherwise complies with the applicable standard. The new or innovative benefits shall include only benefits that are appropriate to Medicare supplement insurance, are new or innovative, are not otherwise available and are cost-effective. Approval of new or innovative benefits must not adversely impact the goal of Medicare supplement simplification. New or innovative benefits shall not include an outpatient prescription drug benefit. New or innovative benefits shall not be used to change or reduce benefits, including a change of any cost-sharing provision, in any standardized plan.
In Massachusetts, Minnesota and Wisconsin, Medigap policies are standardized in a different way.