Q & A: Medigap

Q:  I'll be 65 in October this year and I want to know when I need to apply for a Medi-Gap supplement?  My work place will cover me with their Pacificare insurance until October 31, 2007.

A: The best time to buy a Medigap policy is during your open enrollment period.  This period lasts for six months, beginning on the first day of the month in which you are both age 65 or older and enrolled in Medicare Part B.  During your open enrollment period you will have certain guarantee issue protections.  An insurance company can't

  • refuse to sell you any Medigap policy that it sells,
  • impose a waiting period for coverage to start, or
  • charge you more for a Medigap policy because of your health conditions.

Although the insurance company can't make you wait for all your coverage to start, it may make you wait, up to six months, for coverage of a pre-existing condition (a health problem you have before the date a new insurance policy starts).

If your previous insurance was "creditable coverage," the insurance company must shorten or eliminate any waiting period.  Creditable coverage depends on whether you had any breaks in coverage, or a period when you were without any type of health coverage for more than 63 consecutive days.  You can send in your application for a Medigap policy before your Medigap open enrollment period starts.  This is especially important in your case since your coverage is ending the same month you turn 65.  This will allow you to have continuous coverage without a break and prevent the imposition of a waiting period.

If you choose a Medigap plan for your supplement, you will also need to select a prescription drug plan when you first become eligible for Medicare, and there's a separate premium.  New Medigap polices can't include prescription drug coverage.

Thus, you may also want to carefully compare Medicare Advantage Plans that offer prescription drug coverage.  Medicare Advantage Plans provide all of your Part A and Part B benefits and many also offer Part D drug coverage.

Because Medicare coverage choices are complex, and there's a tremendous variation in price sometimes for identical policies, we recommend that you get one-on-one counseling from a trained, unbiased Medicare benefits counselor at your local Agency on Aging.  The service is available at no charge through your State Health Insurance Assistance Program.