Supplemental policies are called Medigap plans
Medigap policies are a form of private supplemental insurance that pay for part or all of Medicare’s coinsurance and deductibles. Certain policies also cover health care costs that Medicare doesn’t cover, such as emergency medical care in foreign countries, and excess charges from a provider who does not accept assignment.
Unlike certain Medicare Advantage (MA) plans, Medigap policies do not restrict you to a network of providers and facilities. If you have a Medigap policy, you can see any doctor or use any hospital that accepts Medicare.
Note: You do not need Medigap coverage if you have a Medicare Advantage plan or receive full Medi-Cal benefits.
Policies are sold by insurance companies
Medigap policies are sold through licensed insurance agents, sponsoring groups or through the mail by private insurance companies. You only need one policy, and it is illegal for an insurer to sell you more than one.
By law, companies can only offer 10 standardized Medigap policies, known as plans A-N. (These plans are labeled A, B, D, G, K, L, M and N. Previous plans labeled C, E, F, H, I and J are no longer sold. If you have one of these plans you can still use your benefits as long as you continue to pay the premium.)
Standardized plans have the same benefits, regardless of which company sells them. This makes it easy for you to compare premiums for the same lettered policy, quickly and easily.
California regulates Medigap plans
The California Department of Insurance regulates the companies that sell most Medigap policies. The Department of Managed Health Care regulates Medicare SELECT policies, which are a combination of a Medigap policy and a managed care plan.
Note: Retiree plans offered by former employers and unions are not required to conform to the standardized Medigap requirements. These plans are not called Medigap policies, even though they work in much the same way as a Medigap policy.
Once you buy a Medigap policy, the company that sold it to you cannot change the benefits covered by the plan or cancel the policy unless you fail to pay the monthly premium. The company can, however, increase the premium you pay.
Medigap & Medi-Cal
If you have full Medi-Cal benefits (California’s Medicaid program), you do not need a Medigap policy. In fact, it is illegal for insurance companies to sell you one if you are already receiving full Medi-Cal coverage.
However, if you have Medi-Cal with a Share of Cost (SOC), you may purchase a Medigap policy. This can help fill in coverage gaps or allow you to see providers who do not accept Medi-Cal.
If you already have a Medigap policy and later become eligible for Medi-Cal:
- You are allowed to keep your Medigap policy if you want continued access to providers who don’t accept Medi-Cal. This option can be helpful if your Medi-Cal eligibility is temporary or you anticipate needing access to non-Medi-Cal providers again in the near future.
- You have a federal right under the Social Security Act (§1882(q)(5)(A)) to suspend your Medigap policy for up to 24 months. This option allows you to avoid paying premiums while on Medi-Cal and preserve your right to reinstate the policy later if your Medi-Cal eligibility ends.
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