Medicare Vs. Medigap Clarification

English: image edited to hide card's owner nam...
English: image edited to hide card’s owner name. author: Arturo Portilla (Photo credit: Wikipedia)

Twice this year I have been contacted by seniors with a similar problem.  The most recent incident was a was a lady in CA.  She is 70 years old and did not enroll in Medicare B when she was first eligible for Medicare 5 years ago.

Earlier this year, in response to my post, “Why Is It Important To Buy A Medigap Policy When I Am First Eligible?” a reader misunderstood what I was saying and politely, but firmly, corrected the mistake she thought I made.

“Medicare and SS both said I have 8 months to enroll in part B as of last day worked or employer coverage ends which ever comes first.

My coverage is good for another 15 months and they said if I string it out I am penalized 10%.

We have hollered and pounded about this issue even wrote the Prez for what good that has done. Plus if I acquire a pre-existing the insurance companies do not have to take me.

And it is printed in black and white in the Medicare Guide book they send you.”

I understand her confusion and will try to be more clear while I attempt to explain the difference between Medicare and Medigap.  I know that the terms are similar and easily confused.  Never-the-less, they are different plans.  People who plan to use a Medicare Supplement, need to understand the difference.


Medicare is the federal health insurance program for people who are 65, have received Social Security Disability Insurance for at least 24 months, have ALS or End Stage Renal Disease.

In America, if you or your spouse has paid Medicare payroll taxes for at least 10 years, you will not pay anything for Medicare A coverage (hospital) and receive supplemental help with your Medicare B premium (outpatient health care.)

The Medicare system is administered by a subsidiary of the Department of Health and Human Services called, “The Center for Medicare and Medicaid Services.”  It is more commonly known by the federal acronym of CMS.

Unless you qualify for Medicare for health reasons, you will be given the option to enroll in Medicare A & B when you turn 65 or when you are no longer covered by group health insurance.

As the reader commented, you will have several months to enroll in Medicare when the time comes.

Here is where the confusion generally happens.


Medigap is not a federal program.  It is private health insurance that works with Original Medicare.  The purpose of Medigap is to pay all or a portion of your Medicare bills that the federal program does not pay.

Unlike Medicare, Medigap is not guaranteed for everyone.  Unless you apply during a guaranteed issue period, you will be subject to medical underwriting.  A pre-existing medical condition can prevent you from getting Medigap.

If you apply for Medigap during your Initial Enrollment Period for Medicare, which is generally the 7 months around your 65th birthday, you are guaranteed to be approved for Medigap regardless of your health.  During that period, you cannot be declined or have a pre-existing condition clause enforced.

The problem is that the rules change for people who stay on a group plan after age 65.   Although they will have several months to enroll in Medicare, a Medicare Supplement (Medigap) is only guaranteed to be issued if the application is completed within 63 days of the time you lose your group insurance.

To add to the problem, in order to be eligible for a Medigap plan with a private insurance company, that company is going to require that you have Medicare B and will need your Medicare “Claim Number” in order to verify that you are in Medicare’s system.

In other words, you only have 63 days to complete your Medicare B enrollment and Medigap application if you want a Medicare Supplement that is guaranteed to be issued.  If you wait to the last-minute to register for Medicare B, you must be healthy enough to medically qualify for Medigap if you want it.  If you are not able to meet the insurance company’s underwriting qualifications, you will have to do without.