Medicare Supplement Insurance

Medicare won't cover all your health-care costs during retirement, you may want to consider purchasing a supplemental medical insurance policy called Medigap. Medigap is specifically designed to fill some of the gaps in your Medicare coverage.

When's the best time to buy a Medigap policy?

The best time to buy a Medigap policy is during your open enrollment period, since you can't be turned down or charged more because you are in poor health. If you are age 65 or older, your open enrollment period starts when you first enroll in Medicare Part B. Or, if you are not yet 65, your open enrollment period starts when you turn 65, and then lasts for six months. A few states also require that a limited open enrollment period be offered to Medicare beneficiaries under age 65.If you don't buy a Medigap policy during your open enrollment period, you may not be able to buy the policy you want later.

Note: If you are currently age 62 or younger, you should be aware that your eligibility for Medicare may be affected by the increase in the normal retirement age for Social Security. Starting in 2000, the age for collecting full Social Security benefits will gradually increase from age 65 to age 67 over a 22-year period. This means that the age at which you can begin receiving Medicare benefits may be greater than 65 (if current law still applies) because the date you become eligible for Medicare is the date you reach normal retirement age. However, neither the Social Security Administration nor the Health Care Financing Administration has yet published information on how the change in normal retirement age will affect Medicare eligibility.

What does a Medicare Supplement policy cover?

Under federal law, only ten standardized plans can be offered as Medigap plans. All ten must cover certain services, no matter in which state you live. Medigap policies pay most, if not all, Medicare coinsurance amounts. Some also provide coverage for deductibles and services that are not covered by Medicare such as foreign travel, home health care and preventive care.

Each Medigap policy is labeled with the letter "A" through "J". You can buy the Medigap plan that best suits your needs. Plan "A" is the basic benefit plan, while Plan "J" offers the most coverage. However, it is important to note that not all ten plans are available in every state nor offered by all insurance companies.