Medicare Supplement Insurance

Also known as Medigap, a Medicare Supplement policy is private health insurance that covers gaps in Original Medicare, including items such as coinsurance, copays, and deductibles. These fees can really add up if you regularly visit your doctor or hospital. There are also Medigap policies that cover you if you are traveling outside the U.S. and need medical care.

Since it supplements Original Medicare, you must have Part A and Part B to buy a Medigap policy. The way it works is, Medicare pays the Medicare-approved amount of the covered health costs, then your Medigap plan takes care of the rest.

Quick example: You get a $6,500 ambulance bill, and since you’ve met your annual Medicare Part B deductible, 80% of the bill will be covered by Part B. Say you have a Medicare Supplement plan covering Part B copayments and coinsurance costs. Your Medigap policy would then pay the remaining 20% coinsurance of the bill. With some Medigap plans, the Part B deductible may be covered as well.

What Medigap is NOT

It’s easy to mix up all the different aspects of Medicare. To clarify what Medigap is, remember that it isn’t:

Medicare Advantage, which offers Medicare through plans such as HMOs and PPOs
A policy which has vision, dental or hearing benefits
A long-term policy covering nursing home costs or private-duty nursing
Medicaid
Employer or union plans, including the Federal Employees Health Benefits Program
Veterans' benefits
A group plan — a Medigap policy covers only one person
Medicare Prescription Plans, or Part D

In the past, some Medigap policies offered prescription drug coverage. Starting from 1/1/2006, Medigap policies cannot include this benefit; you need to enroll in Part D.

The Medigap Alphabet

47 states are licensed to sell Medigap policies. There are 10 standardized plans identified by the letters A, B, C, D, F, G, J, K, L, M, and N (A, E, H and I omitted because no longer offered). It isn’t required that insurance companies sell the whole menu of Medigap plans, but they must offer Plan A at a minimum. If they want to offer additional plans, they must be Plan C or Plan F.

Because of changes in federal law, Plans C and F will no longer be available to those newly eligible for Medicare after 2020. If you are already enrolled, you can continue getting benefits from those plans.

Since Original Medicare also uses letters of the alphabet, it’s helpful to keep in mind that Parts A, B, C, and D are not the same as Plans A, B, C and D. Just remember that lettered “plans” refer to Medigap policies.

Your Medigap Benefits

Wherever you live in the U.S., Medicare Supplement providers have to offer identical and standardized benefits. For instance, Plan C in New York has to match up with the benefits available in Indiana’s Plan C. The exception to the rule is for people in Massachusetts, Minnesota, or Wisconsin, whose Medigap plan options are unique to those states.

No matter your location though, all plans must cover some of these basic benefits:

Medicare Part A coinsurance costs up to an additional 365 days after Medicare benefits run out
Medicare Part A coinsurance or copayments for hospice care
Medicare Part B coinsurance or copayments
The first three pints of blood used in a medical procedure

Specific plans offer expanded benefits. The most complete Medigap insurance plan, Plan F, covers these added items:

Medicare Part A deductible
Medicare Part B deductible
Part B surcharges
Part B coinsurance for preventive care
Skilled Nursing Facility (SNF) care coinsurance
Foreign travel emergency care (80% of Medicare-approved costs up to plan limits)
You may also get plans that come with other useful benefits.

Medicare Supplement Coverage

	C	D	F*	G	K	L	M	N**
Part A Coinsurance
Part A Deductible					50%	75%	50%
Skilled Nursing Care					50%	75%
Part B Copayment					50%	75%
Part B Deductible
Foreign Travel Emergency	80%	80%	80%	80%			80%	80%

*According to congress.gov, all Medigap plans that pay the Part B deductible will be eliminated from January 1st, 2020 and after in order to discourage the overuse of medical service. For everyone joining Medicare from 2020 on, Plan F & Plan C will no longer be available because of a federal law.

†Plan N covers 100% of your Part B coinsurance, but you will have to pay a $20 copayment for a routine doctor’s visit, and for an emergency room visit that does not result in admission to the hospital, you will owe a $50 copay.

When to Enroll

You have a once-in-a-lifetime window to sign up for Medigap coverage, beginning when you turn 65 and enroll in Part B. If your Original Medicare coverage begins on April 1st, that’s when your individual Medicare Supplement Open Enrollment Period will start, continuing for 6 months.

You can still apply later if you missed your open enrollment window. But take note that you’re likely to undergo medical underwriting with health questions during the application process. Once past your open enrollment period, you can be denied coverage due to pre-existing conditions or health issues.

If you’re still working and have creditable coverage with your employer, you can delay Part B enrollment.

Costs

Medicare Supplement policies are standardized when it comes to benefits, but may charge different premiums, which is why it’s worth it to do your research to find one that fits your budget as well as your health care needs.

In general, Medigap plans use these categories for pricing:

Community-rated. Premiums are the same for everyone, regardless of age
Issue-age-rated. Premiums are based on your age at enrollment. The younger you are when you enroll, the lower your premium will be
Attained-age-rated. Like issue-age-rated, these premiums are set by the age you were when you bought the policy, although these premiums increase as you get older

The last things to know are that any standardized Medigap plan is guaranteed to be renewable regardless of the condition of your health. As long as the premium is paid, your policy can’t be cancelled. Also, no one can sell you a Medigap policy if you have a Medicare Advantage Plan — it’s illegal, unless you are returning to Original Medicare.

How Does Medicare Supplement Insurance Work?

	WITH Medicare Supplement (Plan G)	WITHOUT Medicare Supplement
Part A Coinsurance	$0	up to $800 per day
Part A Deductible	$0	$1,600 per benefit period
Skilled Nursing Care	$0	up to $185.50 per day
Part B Copayment	$0	typically 20% of Medicare approved cost
Part B Deductible	$226	$226 per year

Still confused? Call us!

We’re here at 833-245-0614 to answer any questions, and ready to help with any issues you might have with an insurer through the enrollment process.

FAQs

What’s the difference between Medigap and Medicare Advantage?

The basic difference comes down to whether you want lower out-of-pocket costs. A Medigap plan will give you this, but at a higher premium than a Medicare Advantage policy. MA plans cost less generally, and cover more services.

Will Medigap offer the same set of plans in 2023?

No. Due to changes in federal law, Plans C and F will be eliminated. This is because the government wants to reduce the overuse of the health care system, and plans that cover the Part B deductible (Plans C and F) encourage people to see their doctors perhaps too often.

What’s the difference between Parts and Plans?

Just remember that Medicare is Parts A, B, C, and D. Medicare Supplements and Medicare Advantage consist of various Plans.

When does the Medicare Supplement Open Enrollment begin?

The day your Medicare Part B coverage starts is when your Medigap enrollment period begins. You have 6 months from that day to sign up for a plan.

When is it okay for me to delay enrollment?

Only if you have creditable coverage at the same time you enroll in Part B. That could be insurance from an employer or union-sponsored group health plan.

What are the best Medicare supplement plans?

Best overall Medicare supplement for new enrollees: Plan G
Best overall Medicare supplement before 2020: Plan F
Best low cost Medicare supplement: Plan K
Best alternative to Plan G Medicare supplement: Plan N