A Medicare Supplement Insurance (Medigap) policy, sold by private companies, can help pay some of the health care costs that Original Medicare doesn’t cover, like copayments, coinsurance, and deductibles.

Some Medigap policies also offer coverage for services that Original Medicare doesn’t cover, like medical care when you travel outside the U.S. If you have Original Medicare and you buy a Medigap policy, Medicare will pay its share of the Medicare-approved amount for covered health care costs. Then your Medigap policy pays its share.

Things to know about Medigap (Medicare Supplement) policies:

You must have Medicare Part A and Part B.

If you have a Medicare Advantage Plan, you can apply for a Medigap policy, but make sure you can leave the Medicare Advantage Plan before your Medigap policy begins.

You pay the private insurance company a monthly premium for your Medigap policy in addition to the monthly Part B premium that you pay to Medicare.

A Medigap policy only covers one person. If you and your spouse both want Medigap coverage, you’ll each have to buy separate policies.

You can buy a Medigap policy from any insurance company that’s licensed in your state to sell one.

Any standardized Medigap policy is guaranteed renewable even if you have health problems. This means the insurance company can’t cancel your Medigap policy as long as you pay the premium.

Some Medigap policies sold in the past cover prescription drugs, but Medigap policies sold after January 1, 2006 aren’t allowed to include prescription drug coverage. If you want prescription drug coverage, you can join a Medicare Prescription Drug Plan (Part D).

It’s illegal for anyone to sell you a Medigap policy if you have a Medicare Medical Savings Account (MSA) Plan.

NOTE: Medigap policies don’t cover everything. Medigap policies generally don’t cover long-term care, vision or dental care, hearing aids, eyeglasses, or private-duty nursing.

What is Medicare Advantage (Part C)?

Medicare Advantage, also known as Medicare Part C, is an alternative to Original Medicare (Parts A and B) offered by private insurance companies that are approved by Medicare.

 

How can I obtain Part D Drug Coverage?

There are 2 ways to obtain drug coverage through Medicare:

• Medicare Prescription Drug Plan (Part D). These plans (sometimes called “PDPs”) add drug coverage to Original Medicare, some Medicare Cost Plans, some Medicare Private Fee-for-Service (PFFS) Plans, and Medicare Medical Savings Account (MSA) Plans.
• Medicare Advantage Plan (Part C) (like an HMO or PPO) or other Medicare health plan that offers Medicare prescription drug coverage. You get all of your Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance) coverage, and prescription drug coverage (Part D), through these plans. Medicare Advantage Plans with prescription drug coverage are sometimes called “MA-PDs.” You must have Part A and Part B to join a Medicare Advantage Plan.

Premium for Part D Drug Coverage

If you belong to a Medicare Advantage Plan (Part C) or a Medicare Cost Plan that includes Medicare prescription drug coverage, the monthly premium you pay to your plan may include an amount for drug coverage. If you have a Medigap (Medicare Supplement) policy, you may be required to purchase a stand-alone drug plan separately.

Which drugs are covered under my Part D Drug Coverage?

Like most insurance plans, Part D Drug plans whether stand-alone or part of a Medicare Advantage plan, have a prescription drug formulary. A Formulary is a list of medications that are covered on a plan. These list show if and how a medication is covered. Generally, these lists have tier levels for the covered medications which identify the insureds responsibility (copay or coinsurance) for the medication in question. Make sure that your medications are covered by checking the plan formulary before enrolling.

Medicare Eligibility

Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance) are available to the individuals below:

• Age 65 or older
• Disabled for more than 2 years
• End-Stage Renal Disease (ESRD)

Individuals with these eligibilities should contact the Social Security Administration to find apply. Once you receive your Medicare card you can then apply for additional coverages to work with or in place of your Medicare.

Note: Individuals who are turning 65 and are already receiving Social Security income are generally automatically enrolled to Medicare on their 65th birthday and should receive their card no later than 3 months prior to the 65th birthday month.

Medicare Initial Enrollment Period

Once you are on Medicare, you can enroll onto a Medicare Advantage, Prescription Drug or Medicare Supplement. Your enrollment onto one of these plans must take place within the timelines described below.

New to Medicare Initial Enrollment Periods

Being new to Medicare is generally obtained by one of these 3 circumstances; Turning 65, Disabled for more than 2 years or have End Stage Renal disease. Once you receive your Medicare benefits, you can then choose to enroll in the plan of your choice; Medicare Advantage Plan, Prescription Drug plan or Medicare Supplement plan.

If you are new to Medicare and you are choosing a:

Medicare Advantage Plan (MA Plan):

• Turning 65- you can enroll onto an MA plan during a 7-month window. 3 months before your 65th birthday, the month of your 65th birthday and 3 months after your 65th birthday.
• Disabled-you can enroll onto an MA plan during a 7-month window. 3 months before your Medicare Part B begins, the month your Medicare Part B begins and up to 3 months after your Medicare Part B begins.
• End Stage Renal Disease- In most cases, if you have End-Stage Renal Disease (ESRD), you can’t join a Medicare Advantage Plan.

Prescription Drug plan (Part D Plan):

• Turning 65, Disabled or End Stage Renal Disease- You can enroll during a 7-month window. 3 months before your Medicare Part B begins, the month your Medicare Part B begins and up to 3 months after your Medicare Part B begins.

Medicare Supplements:

Medicare Supplement plans do not have an annual enrollment period; you can choose a Supplement plan anytime throughout the year. But, the best time to purchase a Medicare Supplement plan is during the 6-month Open Enrollment Period because you will not be subject to the underwriting requirements associated with Medicare Supplement policies.

If you apply for a Medicare Supplement policy outside of your initial open enrollment period or special election period, you may be subject to underwriting set forth by that policy. Generally, these eligibility questions are as follow:

1. Within the past two years, a licensed member of the medical profession provided medical advice or treatment for:

• end stage renal (kidney) disease
• kidney disease that may require dialysis
• currently receiving dialysis
• admitted to a hospital as an inpatient within the past 90 days

2. Within the past two years, has a licensed member of the medical profession recommended any of the following treatments for a medical condition, and that treatment has NOT been completed?

A YES answer to any of the above questions would automatically disqualify you from being able to apply, unless you have a Qualified Life Event or Special Enrollment Period that would otherwise grant guaranteed acceptance.

Guaranteed Acceptance on a Medicare Supplement Policy

You have a guaranteed issue right (which means an insurance company can’t refuse to sell you a Medigap policy) in these situations:

• You’re in a Medicare Advantage Plan, and your plan is leaving Medicare or stops giving care in your area, or you move out of the plan’s service area.
• You have Original Medicare and an employer group health plan (including retiree or COBRA coverage) or union coverage that pays after Medicare pays and that plan is ending.
• You have Original Medicare and a Medicare SELECT policy. You move out of the Medicare SELECT policy’s service area.
• You joined a Medicare Advantage Plan or Programs of All-inclusive Care for the Elderly (PACE) when you were first eligible for Medicare Part A at 65, and within the first year of joining, you decide you want to switch to Original Medicare. (Trial Right)
• You dropped a Medigap policy to join a Medicare Advantage Plan (or to switch to a Medicare SELECT policy) for the first time, you’ve been in the plan less than a year, and you want to switch back. (Trial Right)
• Your Medigap insurance company goes bankrupt and you lose your coverage, or your Medigap policy coverage otherwise ends through no fault of your own.
• You leave a Medicare Advantage Plan or drop a Medigap policy because the company hasn’t followed the rules, or it misled you.

Medicare Special Enrollment Periods

You can make changes to your Medicare Advantage and Medicare prescription drug coverage when certain events happen in your life. These chances to make changes are called Special Enrollment Periods (SEPs). Rules about when you can make changes and the type of changes you can make are different for each SEP.

You change where you live

• I moved to a new address that isn’t in my plan’s service area.
• I moved to a new address that’s still in my plan’s service area, but I have new plan options in my new location.
• I moved back to the U.S. after living outside the country.
• I just moved into, currently live in, or just moved out of an institution (like a skilled nursing facility or long-term care hospital).
• I’m released from jail.

You lose your current coverage

• I’m no longer eligible for Medicaid.
• I left coverage from my employer or union (including COBRA coverage).
• I involuntarily lose other drug coverage that’s as good as Medicare drug coverage (creditable coverage), or my other coverage changes and is no longer creditable.
• I had drug coverage through a Medicare Cost Plan and I left the plan.
• I had drug coverage through a Medicare Cost Plan and I left the plan.
• I dropped my coverage in a Program of All-inclusive Care for the Elderly (PACE) plan.

You have a chance to get other coverage

• I have a chance to enroll in other coverage offered by my employer or union.
• I have or am enrolling in other drug coverage as good as Medicare prescription drug coverage (like TRICARE or VA coverage).
• I enrolled in a Program of All-inclusive Care for the Elderly (PACE) plan.

Your plan changes its contract with Medicare

• Medicare takes an official action (called a “sanction”) because of a problem with the plan that affects me.
• Medicare ends (terminates) my plan’s contract.
• My Medicare Advantage Plan, Medicare Prescription Drug Plan, or Medicare Cost Plan’s contract with Medicare isn’t renewed.

Other special situations

• I’m eligible for both Medicare and Medicaid.
• I qualify for Extra Help paying for Medicare prescription drug coverage.
• I’m enrolled in a State Pharmaceutical Assistance Program (SPAP) or lose SPAP eligibility.
• I dropped a Medigap policy the first time I joined a Medicare Advantage Plan.
• I have a severe or disabling condition, and there’s a Medicare Chronic Care Special Needs Plan (SNP) available that serves people with my condition.
• I’m enrolled in a Special Needs Plan (SNP) and no longer have a condition that qualifies as a special need that the plan serves.
• I joined a plan, or chose not to join a plan, due to an error by a federal employee.
• I wasn’t properly told that my other private drug coverage wasn’t as good as Medicare drug coverage (creditable coverage).
• I wasn’t properly told that I was losing private drug coverage that was as good as Medicare drug coverage (creditable coverage).

Medicare and Medicaid Eligibility

Individuals who have both Medicare and Medicaid may qualify for additional benefits outside of traditional Medicare. Depending on your level of Medicaid eligibility, you may have some or most of your Medicare premiums, deductibles and coinsurance covered.

Levels of Medicaid eligibility based on percentage of Federal Poverty Level
(except Alaska and Hawaii)

Qualified Medicare Beneficiary (QMB):

• Monthly Income Limits: (100% FPL + $20)

Specified Low-Income Medicare Beneficiary (SLMB):

• Monthly Income Limits: (120% FPL + $20)

Qualifying Individual (QI):

• Monthly Income Limits: (135% FPL + $20)

Qualified Disabled Working Individual (QDWI):

• Monthly Income Limits: (200% FPL + $20)

Individuals who meet certain income requirements may qualify for Extra Help to pay the costs of Medicare prescription drug coverage.

As of 2016, Low Income Subsidy Program (LIS) could reduce your costs for medications to no more than $2.95 for each generic/$7.40 for each brand-name covered drug. Some people pay only a portion of their Medicare drug plan premiums and deductibles based on their income level.

To qualify, your yearly income could be up to $17,
820 for an individual and $24,030 for a married couple, with resources not exceeding $13,640 for and individual and $27,250 for a married couple.

If you are already entitled to Medicaid, your benefits should automatically include LIS program benefits.