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Debunking 5 Medigap Misconceptions

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As the name implies, Medigap insurance is designed to fill in gaps in coverage that occur with Original Medicare. For example, if Original Medicare Part B covers 80% of medically necessary services for your outpatient care, a Medigap policy will cover the remaining 20%. This is important coverage to have, as there is no cap on out-of-pocket expenses with Original Medicare.

Myths and misunderstandings concerning Medigap are more prevalent than you may think, and they can lead to costly mistakes by Medicare beneficiaries. Here we offer a debunking of five Medigap misconceptions.

If you have long-term care insurance, you do not need a Medigap policy.

Long-term care insurance and Medigap insurance are two entirely different products. Medicare does not cover long-term care, and Medigap policies will not pay for these services. You need long-term care insurance for that. If you choose Original Medicare and do not purchase a Medigap policy, you face unlimited costs. You are responsible for 20% of your covered services, regardless of the amount.

Medigap insurance and Medicare Advantage plans are the same thing.

When you enroll in Medicare, you have the option to choose Original Medicare or a Medicare Advantage plan with prescription drug coverage (Part C). Original Medicare is typically a package that includes the following:

  • Part A – hospital insurance
  • Part B – medical insurance
  • Part D – prescription drug coverage
  • Medigap policy

You can purchase a Medigap policy to supplement a Medicare Advantage plan.

Medigap policies are only available to Medicare beneficiaries who choose Original Medicare Parts A and B. Those who elect to enroll in Medicare Advantage plans are not eligible for Medigap insurance. Insurance companies are prohibited by law from selling Medigap policies to people with Medicare Advantage plans.

Medicare Advantage plans are designed to supplement Medicare.

This statement could not be further from the truth. Medicare Advantage plans are health plans that are approved by Medicare and provided by private insurance companies as an alternative to Original Medicare. When you become eligible for Medicare, and during Open Enrollment every year, you can choose one or the other. You can have either Original Medicare or a Medicare Advantage plan – never both. Medigap policies are designed to supplement Original Medicare, which has no cap on annual out-of-pocket expenses.

You can use a Medigap plan for prescription drug coverage.

Medicare Supplement Insurance (Medigap) plans do not cover prescription drugs. With Original Medicare Parts A and B, you need to enroll in Part D for drug coverage, or in the alternative, switch to a Medicare Advantage plan to replace Parts A, B, and D. A Medigap policy will cover 20% of medically necessary services if Medicare covers 80%, but no portion of your drug costs.

Unfamiliar terms, such as “Medigap,” “Medicare Advantage Plan,” “Original Medicare,” and “Parts A, B, C, and D,” can make enrolling in Medicare and selecting a health plan a confusing process. If you are eligible for Medicare and need assistance enrolling, choosing the best coverage option, or selecting an affordable health plan that provides the right coverage, see our experienced agent for guidance through the process.

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