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When is the best time to enroll in a Medigap plan, and how do they determine my premium?

Medigap plans, available through private health insurance companies, are designed to fill the gaps from Original Medicare coverage. They help pay your out-of-pocket costs, such as co-payments and deductibles for Medicare-covered services, and some plans cover services that Original Medicare doesn't cover.

You can buy a Medigap policy any time, but open enrollment is best. Open enrollment for Medigap plans last for six months and begin on the first of the month in which you turn 65 and are enrolled in Medicare Part B. When you enroll in Medigap during open enrollment, the insurance company can't refuse to sell you a policy it offers, can't charge you more due to your health status and can't make you wait for coverage to start, although you may be subject to a waiting period for coverage of pre-existing conditions. Even if you have a pre-existing condition, you can get the waiting period eliminated or shortened if you had at least six months of continuous health coverage just before applying for a Medigap policy.

Medigap plans, also known as Medicare Supplement Insurance, are standardized into 10 different types of policies, Plans A through N, but not all types are available in every state. Each policy type has a basic set of benefits and may include extra benefits, so you can choose the plan that best fits your coverage needs. Each plan type features the same set of benefits, no matter which insurance company sells it. For example, if you choose Medigap Plan A, you'll get the same set of benefits, no matter which company you buy it from.

Insurance companies set Medicare supplement insurance premiums in a variety of ways:

• Community-rated or no-age-rated -- Premiums aren't based on your age; they may rise because of inflation or other reasons, but not because of your age.

• Issue-age-related -- The premium is based on your age when you buy and won't go up because of your age as you get older, although the cost may go up because of inflation or other factors.

• Attained-age-related -- The premium is based on your current age, so it starts out low for younger buyers and rises as you get older.

Ask how the insurance company prices its Medigap policies before you buy.

For more, see 6 questions to help your parent choose a Medigap insurance plan.

Last updated: Dec. 3, 2010
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