Medigap (Medicare Supplement) refers to various private supplemental health insurance plans sold to Medicare beneficiaries throughout the United States. The policies provide additional coverage for medical expenses that Medicare partially covers, or does not cover at all. Medigap's name is derived from the notion that it exists to cover the difference, or "gap", between the expenses reimbursed by Medicare and the total cost of services.
A person must be enrolled in part A and B of Medicare before they can purchase a Medicare Supplement Policy. Medicare Supplement Insurance is not compatible with other forms of private Medicare coverage, such as a Medicare Advantage plan.
Medicare Supplements are standardized by the Centers for Medicare and Medicaid Services (CMS) into twelve different plans, labeled A through L, sold and administered by private companies. Each Plan offers a different combination of benefits. The coverage provided is roughly proportional to the premium paid. Since Medicare Supplements are private insurance and not government sponsored, the rules governing the sale and offerings of a Medigap insurance policy can vary from state to state. Some states such as Massachusetts, Minnesota, and Wisconsin require Medigap insurance to provide additional coverage than what is defined in the standardized Medigap plans.
Click Here to view the 2010 Medicare Supplement Plan Changes