insurance

Medigap

Medigap is another name for Medicare Supplement insurance, referring to private insurance policies that help fill the 'gaps' in Medicare coverage. These standardized plans help pay for out-of-pocket costs like deductibles, copayments, and coinsurance that Medicare doesn't cover.

Example

“David's Medigap Plan F covers all of his Medicare deductibles and coinsurance, giving him predictable healthcare costs each month.”

Memory Tip

Medigap fills the 'gap' between what Medicare pays and what you owe - like a bridge over the Medicare gaps.

Why It Matters

Medigap policies provide peace of mind and financial protection by eliminating most out-of-pocket costs associated with Medicare. This is especially important for people on fixed incomes who need predictable healthcare expenses and protection from large medical bills.

Common Misconception

Some people think all Medigap plans are the same, but there are different standardized plan letters (A, B, C, F, G, etc.) with varying levels of coverage and costs. Additionally, many believe you can enroll in Medigap anytime, but the best time is during your 6-month open enrollment period when you can't be denied coverage or charged more for health conditions.

In Practice

Michael, age 65, enrolls in Medigap Plan N during his open enrollment period, paying $165 monthly. Throughout the year, he has $8,000 in Medicare-approved medical expenses. Medicare Part B pays 80% ($6,400), leaving him with $1,600 in coinsurance. His Plan N covers most of this coinsurance but requires small copays: $20 for doctor visits and $50 for emergency room visits. His total out-of-pocket costs for the year are about $240 in copays plus his monthly premiums, rather than the $1,600 he would have paid without Medigap.

Etymology

A portmanteau of 'Medicare' and 'gap,' coined to describe insurance that fills the gaps in Medicare coverage. The term became widely used in the 1990s when these policies became more standardized and regulated.

Common Misspellings

Medi-gapMedgapMedigapMediagap

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Other insurance terms you should know

deductibleThe amount you pay out-of-pocket before your insurance begin…insurance premiumThe amount paid periodically to an insurance company in exch…deductibleThe amount a policyholder must pay out of pocket before insu…copayA fixed amount paid by an insured person at the time of a me…coinsuranceA cost-sharing arrangement where the insured pays a percenta…out-of-pocket maximumThe most an insured person will pay for covered healthcare s…