Original Medicare pays for many, but not all, healthcare services and supplies. A Medigap policy, sold by private insurance companies, can help pay some of the “gaps” that Original Medicare does not cover, such as copayments, coinsurance and deductibles. Medigap policies do not work with any other type of health insurance, including Medicare Advantage Plans, employer/union group coverage, Veterans Administration (VA) benefits or TRICARE. If you have Original Medicare and you buy a Medigap policy, both plans will pay their share of Medicare-approved amounts for covered healthcare costs. Some Medigap policies cover certain costs not covered by Original Medicare. Medicare does not pay any of the costs 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 through L. Each standardized Medigap policy must offer the same basic benefits, no matter which insurance company sells it. Cost is usually the only difference between Medigap policies sold by different insurance companies. In Georgia, you may buy another type of Medigap policy called Medicare SELECT which requires you to use specific hospitals and, in some cases, specific doctors to get full benefits.
Medigap policies do not cover long-term care, vision or dental care, hearing aids, eyeglasses and private-duty nursing.
Each insurance company decides how it will set the price or premium for its Medigap policies. The way they set the price affects how much you pay now and in the future. Medigap policies can be priced or rated in three ways:
1. Community-rated (also called "No-age-rated") – the same monthly premium is charged to everyone who has the Medigap policy regardless of age.
2. Issue-age-rated – the premium is based on the age you are when you buy the Medigap policy.
3. Attained-age-rated – the premium is based on your current age, so your premium goes up as you get older.