First, only beneficiaries with Original Medicare are eligible to purchase Medigap. In addition to paying a monthly premium on Plan B, those with a Medigap policy pay a separate premium to the Medigap provider. Once a beneficiary purchases Medigap, the policy can be renewed every year. Also, the provider cannot drop the beneficiary due to additional health problems.
Beneficiaries can purchase a Medigap policy from any Medicare-approved insurance group within their state. However, it's illegal to sell a Medigap policy to a beneficiary with an existing Medicare Advantage policy. Beneficiaries that are in the process of dropping their Plan C coverage are the exception to this rule.
Beneficiaries that are interested in Medigap coverage should buy a policy when they're first eligible. By purchasing a Medigap policy during the enrollment period, beneficiaries can take advantage of better prices and more choices while avoiding higher costs that result from a failure to meet the deadline.
Medigap providers use medical underwriting to determine an applicant's acceptance and how much to charge. Nonetheless, beneficiaries with pre-existing health conditions may purchase any policy at the same rate as people with good health, as long as the purchase occurs during the enrollment period. Medigap providers may choose not to sell policies or charge more to beneficiaries that miss the enrollment period and don't meet the medical underwriting requirements.
Some Medigap plans sold before January 1, 2006, included prescription drugs. However, policies sold afterward have excluded medications from coverage. Beneficiaries that are interested in prescription drug coverage can purchase a separate Plan D policy.
Medigap only covers one beneficiary. Therefore, married couples must purchase two policies if both want the supplemental insurance coverage. Unlike Medicare Advantage that provides additional services, Medigap only supplements the benefits provided by basic Medicare. It's also important to note that individuals new to Medicare cannot use Medigap to cover the Plan B deductible. This rule also applies to those eligible for Plan C and Plan F. Beneficiaries that already purchased supplemental insurance before January 1, 2020, can keep their existing plans.