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Medicare Supplement Insurance

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.
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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:

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:

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

Medicare Supplement Coverage

A B 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.

Medicare Supplement Insurance Coverage

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:

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.

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Table of Contents

FAQs

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.

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.

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

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.

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.

  • 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

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Medicare Supplement policies are private health insurance designed to cover gaps in Original Medicare. They are also known as Medigap plans. These take care of costs such as copays, coinsurance, and deductibles which can become expensive if you need regular care from a doctor or hospital. If you need medical care while traveling outside the U.S., you can buy Medigap policies to help cover those costs. As a supplement to Original Medicare, you’re required to have Part A and Part B before you canget a Medigap policy. This way, Medicare is responsible for the Medicare-approved costs of the covered care, and the remainder is covered by your Medigap plan.

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Optimal coverage comes with higher costs, making Plan F the most expensive Medigap plan. Plan F is known as “first-dollar coverage” and it takes care of everything provided during a doctor or hospital visit. Your only responsibility is for dental, vision, medications, and equipment, such as hearing aids.

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The Federal government ended the Plan F option for new enrollees last year to keep the healthcare system from being overused by patients who had their deductibles covered. The next best coverage after Plan F is Plan G.

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Medigap Plan G offers every advantage of Plan F except for the deductible, which you have to cover. Because it isn’t as comprehensive as Plan F, Plan G is more affordable.

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For people who don’t go to the doctor often, Plan K is worth considering. It is the most affordable because it provides just 50% of Medicare Part B coinsurance, the Part A deductible, blood, skilled nursing, and Part A hospice costs. For comparison, Plan G and others offer full coverage of these expenses, and more.

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It’s hard to argue against plans which cut your traditional Medicare costs. For most people, having the extra coverage these supplemental plans provide is common sense, unless they want the specific features of a Medicare Advantage plan.

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Most people would benefit from not having to pay out-of-pocket to stay healthy. Medicare supplement insurance or a Medicare Advantage plan offer vital savings now, but are indispensable should a catastrophic health issue occur.

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Of the 10 Medicare-approved Medigap plans, Plan G and Plan N are the most popular. Plan F is no longer available to new Medicare enrollees as of 2020, but it is still popular among people who bought this plan prior to 2020.

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  • Plan F$128–$342
  • Plan F (high deductible)$22–$88
  • Plan G$106–$325
  • Plan G (high deductible)$29–$58

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Before getting a Medicare supplement plan, you need to be enrolled in Medicare Part A (hospital insurance) and Part B (medical insurance). People with Medicare Advantage Plans who want to go back to Original Medicare can buy a Medigap policy prior to switching.

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The security of having lower or no out-of-pocket healthcare costs can offset the premiums you’ll have to pay for whichever Medigap plan you choose, which vary depending on the benefits offered.

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The national average cost for Medicare Supplement Plan F is $1,824 annually, which is $152/month; Medigap Plan G will cost you around $143 per month.

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Since Plan F was discontinued for new enrollees as of 2020, Plan G offers the most coverage for people 65 and older. It has a lower premium than Plan F and duplicates its benefits, except for the Part B deductible.

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It depends on your specific needs, but for most people a Medigap plan is very useful in supplementing the coverage of Medicare Part A and Part B. A Medicare Advantage plan is an affordable way to get healthcare coverage not offered by Original Medicare.

 

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Historically, Plan F has been the most popular because it covers all the out-of-pocket costs Medicare does’t pay for. This includes the 15% extra charge billed by providers who do not take Medicare as full payment.

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Since January 1, 2006, no Medigap policy came with prescription drug coverage. You have two options to get covered, enrolling in either a Medicare Prescription Drug Plan (Part D) or a Medicare Advantage plan.

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