When you begin perusing through your Medicare options, you may notice you have the ability to purchase Medicare supplement insurance. This coverage is also known as Medigap and is sold by private companies to help pay some of the health care costs you may accrue that aren't covered by Original Medicare. Some of these costs include copayments, coinsurance and deductibles.

If you plan on traveling outside the U.S., a Medigap policy may prove to be beneficial should you need medical attention as it offers coverage for some services.

Medigap plans were established to cover the out-of-pocket costs left out of your Original Medicare Plan which doesn't cover services such as hospital stays, skilled nursing facility stays, blood tests, Medicare Part B yearly deductible and Medicare Part B covered services.

What to know before purchasing Medigap coverage

  • It's essential to remember that Medigap policies generally don't cover long-term care, vision or dental care, hearing aids, eyeglasses or private-duty nursing. 
  • In order to enroll in Medigap, you must also have Medicare Parts A and B. When you enroll in your Medigap policy, Medicare and Medigap will each pay their share of covered health costs to lessen the financial burden on beneficiaries. 
  • When you purchase Medigap coverage, you will pay a private insurance company a monthly premium on top of what you pay each month for your Part B premium.
  • Spouses must each have their own Medigap policy as it only covers one individual.
  • If you are in your Medigap open enrollment period or covered under Medigap protection then you have a right to purchase a policy. However, if you have Medicare Advantage, Medicaid, are under age 65 or have end-stage renal disease or another Medigap policy then you may not be eligible to enroll in a plan.
  • Before you purchase you Medigap policy, shop around to see what offers you the coverage you need and what you can afford. Not all companies will offer all of the Medigap policies so you'll want to know your health needs before settling. You also want to make sure the company you choose is reliable.

The following plans are not Medigap: 

  • Medicare Advantage Plans (HMO, PPO and Private Fee-for-Service Plan)
  • Medicare Prescription Drug Plans
  • Medicaid
  • Employer or Union plans
  • TRICARE
  • Veterans' benefits
  • Long-term care insurance policies
  • Indian Health Service, Tribal and Urban Indian Health plans

If you change decide to drop your Medigap policy and enroll in a different type of Medicare coverage, then you'll have 63 days for the new plan goes into effect so you aren't charged a late enrollment penalty for your Part D prescription drug plan should you choose to join one.