Dear Marci,

I am turning 65 soon and am confused about supplemental health insurance. I see so much advertising about these plans, but what are they and do I need one?

– Lenna (Rio Rancho, NM)

Dear Lenna,

You are in good company—many Americans becoming eligible for Medicare receive mail or see TV or newspaper ads for “Medicare supplements” or “supplemental health insurance.” Both of these terms usually refer to Medigap policies. A Medigap policy is a standardized supplemental health plan that pays for part or all of Medicare-related health care costs that you would otherwise pay out of pocket. Medigap policies only work with Original Medicare Parts A and B, which is Medicare coverage through the federal government. If you plan to get your Medicare benefits through a private insurance company, called aMedicare Advantage Plan, then you cannot purchase a Medigap.

Medigaps supplement Original Medicare costs. These costs include deductibles, coinsurance charges, and copayments (copays). Medigaps do not usually pay for coverage gaps in Medicare, such as excluded services like routine dental or vision care. However, some Medigaps cover emergency care received in foreign countries, which is typically not covered by Medicare.

Medigaps are regulated by each state, usually under a department of insurance or similar state agency. This means that some aspects of Medigaps work differently in each state. Medigaps are still subject to some federal regulations, but different states may have their own Medigap rules as well.

There are different types of Medigap policies that you can buy. Private insurance companies offer ten standardized Medigap policies in most states: Plans A, B, C, D, F, G, K, L, M, and N. Note that insurance companies do not have to offer all ten Medigap policies. Plans with the same letter offer the same benefits, but each insurance company may charge a different monthly premium. For example, Medigap Plan A offered by Insurance Company 1 provides the same benefits as Medigap Plan A offered by Insurance Company 2, but the two companies may charge different premiums. This means that you can get the same coverage even if you choose a plan with a lower monthly premium.

Lenna, before you consider purchasing a Medigap, be sure to do your research. Take steps to help understand Medigaps and find the best option for you.

– Marci