The basics of Medigap

Medicare Parts A and B do not cover all of your health-care expenses. For example, you'll still pay a $1,132 deductible for the first 60 days of a hospital stay, and 20 percent of the cost of Part B services such as doctor visits, outpatient treatments, and laboratory tests.

If you don't have retiree coverage from a former employer to fill in those gaps, you might consider buying a private Medicare supplement (Medigap) policy.

Here's what you need to know about Medigap.

Medigap plans come in standardized varieties

In every state except Massachusetts, Minnesota, and Wisconsin, which have their own systems, Medigap plans are available in 10 standardized benefits packages, which vary according to how much of your expenses they will pick up. The more generous the plan, the higher the premium.

The most popular plan is F, which pays for pretty much everything Medicare doesn't, including the 15 percent excess charge that you can be billed by doctors who don't accept Medicare as payment in full. Here's a chart of the various Medigap plans.

You can find a complete list of Medigap carriers in your area on Medicare.gov.

The search engine will give you a range of prices for each category of plan, and the names and contact information for companies that sell them. But it's up to you to contact the carriers directly to get their specific pricing information.

The type of premium pricing method you choose will affect your future costs

A policy that looks inexpensive when you first buy it at age 65 could end up being the most expensive when you hit 80.

Carriers use three pricing models (though in some states you may have a choice of only one or two):

• Community-rated (also called no-age rated). The same premium is charged to everyone, regardless of age. Medigap experts say these plans are the least expensive over time, though not necessarily when you first purchase them.
• Issue-age-rated. The premium is based on your age when you buy the policy. It won't go up as you age, but will increase due to cost inflation.
• Attained-age rated. The premium starts low but goes up as you get older. Over time, this type of policy is the most expensive.

Learn more about policy pricing.

Medigap plans can turn you down or charge you more for pre-existing conditions at certain times

In every state, you have guaranteed issue rights to buy a Medigap policy for six months starting the first day of the month you are at least 65 and enrolled in Part B.

After that, you're only entitled to guaranteed issue Medigap in specific situations, such as:

• Your Medicare Advantage plan shuts down or you move out of its service area.
• Your retiree plan shuts down.
• You joined Medicare Advantage at 65 but decide to switch back to original Medicare within a year.
• Your Medigap plan shuts down.

The rules for when Medigap must sell you a plan are explained in this publication from Medicare.