For those who continue their Federal Employees Health Benefits program coverage into retirement, as most do, it is generally unnecessary to buy a Medicare supplemental insurance (Medigap) policy because FEHB fills largely the same role. That is, Medicare generally pays benefits first, and any unpaid costs—there are many medical services that Medicare does not cover–are sent on to the FEHB carrier, which pays according to the plan’s terms.
However, some retirees are ineligible to continue FEHB or choose to drop it, on the view that they would be essentially paying twice for coverage that they can receive only once, and rely on Medicare. In some cases they buy a Medigap plan, which is private insurance designed to help pay Medicare cost-sharing amounts and fill in other gaps in Medicare coverage. There are standard Medigap policies, and each offers a different combination of benefits.
The best time to buy a policy is during your Medigap open enrollment period. For a period of six months from the date you are first enrolled in Medicare Part B and are age 65 or older, you have a right to buy the Medigap policy of your choice. That is your open enrollment period.
You cannot be turned down or charged higher premiums because of poor health if you buy a policy during this period. Once your Medigap open enrollment period ends, you may not be able to buy the policy of your choice. You may have to accept whatever Medigap policy an insurance company is willing to sell you.
If you have Medicare Part B but are not yet 65, your Medigap open enrollment period begins when you turn 65. However, several states require at least a limited Medigap open enrollment period for Medicare beneficiaries under 65.
Your state health insurance assistance program can answer questions about Medicare and other health insurance. The services are free. You can get help in deciding whether you need more insurance and, if so, what kind and how much to buy.
Your state assistance program can also provide you with information about Medicare SELECT, another type of Medicare supplemental health insurance sold by insurance companies and HMOs throughout most of the country. Medicare SELECT is the same as standard Medigap insurance in nearly all respects. The difference is that each insurer has specific hospitals, and in some cases specific doctors, that you must use, except in an emergency, in order to be eligible for full benefits. Medicare SELECT policies generally have lower premiums than other Medigap policies because of this requirement.