Medigap is a health insurance plan for elderly residents of the United States, which is designed to compensate for the price of medical expenses that are not covered under the regular Medicare scheme. Medigap is a private health insurance plan that can only be sold to existing Medicare beneficiaries who are already covered by Medicare A and Medicare B. While it is mostly used by people who are over 65 years of age, Medigap can also be taken out by disabled residents and those people who suffer from a condition of permanent kidney failure requiring dialysis or a kidney transplant (ESRD).

Medigap insurance plans are not compatible with other forms of private Medicare health coverage, such as Medicare Advantage or other similar plans. Because Medigap is a private insurance product, it does come in a range of different configurations, with differing levels of coverage, differing premium prices, and differing interactions with Medicare services and products. Medigap is sometimes supplied to employees as part of their overall health care plan, and made available to them once they have reached the age of 65. One area of Medigap insurance which has changed lately is with regard to how prescription drugs are funded, as a direct result of the introduction of the Medicare Part D benefit on January1, 2006.

Medigap policies that were sold before 2006 allowed for the coverage of prescription drug, but plans since then are not able to be sold with any drug coverage at all. While people who have an older style policy are able to keep hold of it, many choose to switch to another type of Medigap contract because their prescriptions are already covered by the new Medicare Part D benefit. Medigap plays an important role in the American healthcare system, and is relied upon by thousands of elderly people as a way to bridge the gap between basic Medicare coverage and their actual medical expenses.

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