Medicare Supplement Plans
Original Medicare (Parts A and B) offers millions of Americans the health care benefits they need, but this insurance isn’t free or comprehensive. There are many expenses that Original Medicare doesn’t cover, leaving some people saddled with the uncomfortable fear that despite being covered, they could someday owe more than they can afford.
Some people switch to Medicare Advantage and a pricy plan, but what if you want to stay with Original Medicare? How do you help cover all those extra costs, such as deductibles, copayments, and coinsurance?
That’s where Medicare Supplement plans, or Medigap, comes in.
What is Medigap?
Medicare Supplement Plans (MS), also referred to as Medigap insurance, are private health insurance policies that help cover expenses not paid for by Original Medicare benefits. In other words, Medigap policies help cover the “gaps” in Medicare expenses, such as deductibles, coinsurance, and copayments.
These plans are regulated by Medicare to guarantee fair coverage, but private insurance companies provide them. In exchange for coverage, you’ll pay a monthly premium, much like other forms of health insurance.
Why buy Medicare supplemental insurance?
Original Medicare beneficiaries buy Medigap plans because the out-of-pocket expenses they’d otherwise pay can get pretty hefty.
Part A has a steep deductible ($1,364 in 2019) that each enrollee must meet out of pocket before benefits kick in. Even after you meet the deductible, Part A requires a daily copayment after a certain number of days in the hospital—a cost that can really add up if you’re recovering from serious surgery or chronic condition.
Part B has a relatively low deductible ($185 in 2019), but when it does kick in, it pays around only 80% of covered costs. That means you’re responsible for the other 20%, and unless you rarely see a doctor or are a picture of health, those costs can get weighty, too.
What Supplement plans could include:
Then there are situations when you can’t see a doctor who accepts Medicare as full payment. If you must see a rare specialist who charges more for their services than Medicare will pay, you’re responsible for the difference.
And what if you’re one of the 47% of Boomers who plan to travel internationally? Since Medicare benefits don’t pay for medical costs abroad, you’ll have to pay for any care you receive while out of the country, too.
While Original Medicare won’t cover many of your healthcare costs, there are more than 10 Medicare Supplemental plans that can help.
The ABCs: an alphabet of plan options
There are ten different types of Medigap plans: Plan A, B, C, D, F, G, K, L, M, and N (the missing letters E, H, I, and J no longer take new enrollments and are being phased out).
Each Medigap insurance plan offers a unique set of benefits, but with a few exceptions, each is standardized by federal law. The Medigap insurance available to you will likely be one of the lettered plans in the chart below (Data effective 10/22/2018).1 In the chart, a check mark means the plan covers 100% of the Medicare Part A or Part B benefit.
|Part A coinsurance & hospital costs (up to 365 days after Medicare benefits end)||X||X||X||X||X||X||X||X||X||X|
|Part B coinsurance or copayment*||X||X||X||X||X||X||50%||75%||X||X|
|Blood in hospital (first 3 pints received)||X||X||X||X||X||X||50%||75%||X||X|
|Part A hospice coinsurance or copayment||X||X||X||X||X||X||50%||75%||X||X|
|Skilled nursing facility coinsurance||X||X||X||X||50%||75%||X||X|
|Part A deductible||X||X||X||X||X||50%||75%||50%||X|
|Part B deductible||X||X|
|Part B excess charges||X||X|
|Foreign travel emergency services (up to plan limit)||80%||80%||80%||80%||80%||80%|
|Out-of-pocket limit (2018 plans) **||None||None||None||None||None||None||$5,240.00||$2,620.00||None||None|
*With Plan N, you must pay a copayment for certain services, including up to $20.00 for some doctor visits and up to $50.00 for ER visits without inpatient admission.
**Once the out-of-pocket limit has been met, your plan pays 100% of your covered services for the year.
No Medigap plan offers prescription drug coverage. For that, beneficiaries must purchase a Medicare Part D plan.
Although highly regulated, Medicare supplemental insurance plans are offered by private companies. As a result, coverage for out-of-pocket expenses may be the same, but the premiums for these plans will vary by company and area.
Furthermore, not all companies offer every plan, and particular rules govern which plans companies must offer. If an insurance company provides any Medigap plans at all, it must offer Plan A. If it chooses to offer more plans, Plans C and F must be on the list.
This complex web of regulation and privatization means that choosing the right plan isn’t always easy. But don’t worry. We’ll help you through it.
Enrolling at the right time
Your Medigap policy will likely come with some pretty extensive protections and guarantees from the federal Medicare program if you’re over 65 years of age. For one, insurers can’t refuse to sell you a policy. They can’t impose a waiting period on giving you coverage, nor can they charge you higher premiums because of any preexisting conditions—that is, if you enroll at the right time.
These protections apply only to enrollees at particular times. Typically, you’ll get the most protection if you enroll in a Medicare supplement policy within six months of obtaining Part B. After that, only certain policies will guarantee enrollment. You may be charged more if you have a preexisting medical condition or you may go through a waiting period for coverage.
The state you live in may have additional protections that allow you to buy a Medigap policy at any time, so check with your state department of insurance. If you’re under age 65 and eligible for Medicare (due to end-stage renal disease, for example), you may need to rely on state laws for such guaranteed protections.
What Medigap plan is right for me?
Because every person’s situation is different, we highly recommend talking to a licensed agent before choosing a plan. To give you an idea of some benefits you may want to consider, however, here are some recommendations we commonly make to our customers based on their needs.
Modest boost in coverage
Looking for just a little more coverage than Original Medicare provides? Consider Medicare supplemental plans A and B (not to be confused with Medicare Parts A and B). These plans cover the basics like Part A and B coinsurance, hospital and hospice costs, and receiving blood while in the hospital. Plan B also covers your Part A deductible. And that’s about it.
The primary benefit of these plans is that they’re inexpensive. If you don’t anticipate needing care in a skilled nursing facility or having foreign travel medical expenses, these are great plans.
Enroll in a Medicare Supplement Plan
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If “better safe than sorry” is your motto, consider Medigap’s top-coverage plans F, G, and C. Medicare supplement Plan F provides the most comprehensive coverage for health care, paying all Part A and B deductibles and coinsurance, and then some. Medicare supplement Plan G foregoes covering the Part B deductible (which is low anyway). F and G also help cover Part B excess charges from doctors who charge more for their services than Medicare agrees to pay.
Because these plans cover more, you should expect to pay a higher premium for them.
If you’re considering Plans C and F, however, read the section on Medicare Part B deductible coverage below.
Coverage that’s Just Right
If the first group of plans above seems like too little coverage, but the second group is too much, then Medicare supplement insurance plan K or L could be just right.
These plans provide partial coverage (50% and 75%, respectively) of Part B coinsurance, Part A hospice insurance, the Part A deductible, and more. They also feature limits on out-of-pocket costs, so if your medical expenses rise, your share of costs tops out.
Finally, these plans are reasonably priced.
If you plan to travel outside the country regularly and don’t have another form of health care insurance that covers foreign medical expenses, choose one of the following plans: C, D, F, G, M, or Medicare supplement Plan N.
We’ve already discussed a few details about Plans C, F, and G above. Plan D, Plan M, and Plan N offer 100% coverage for most copayments and deductibles, placing them slightly above the “just right” plans regarding coverage within the United States.
Medicare Part B deductible coverage
There are currently just two plans that offer coverage for the deductible for Medicare Part B. These Medigap plans are C and F. Even though Part B’s deductible is very low ($185 in 2019) compared to other parts of Medicare, Plans C and F are very popular.
If covering your Part B deductible is important to you, you may want to snag Plan C or F ASAP. The federal government will be phasing these plans out by 2020. People already enrolled in these plans can keep their current coverage, but after January 1, 2020, no C or F plans will accept new enrollees.
Before you rush to enroll in C or F, however, a word of caution: other plans that have been phased out (such as E, H, I, and J) have also allowed people who are already enrolled in them to stay with the plans. Of course, people can leave the plan at any time, so the pools of enrollees in these plans have shrunk dramatically.
While this might not seem like a problem, it can become one. Medigap premiums are based on a plan’s ability to share costs over a large group of people. When that group shrinks, premiums go up. And that’s precisely what’s happening with Plans E, H, I, and J.
Unfortunately, Medigap plans can deny you coverage outside certain periods. If the premium for your C or F Medigap plan gets too costly for you down the road, you may have trouble getting coverage from another plan.
How much does Medigap insurance cost?
Although insurance companies must offer a standardized set of benefits for each lettered plan, insurance companies price Medigap plans differently. Carriers can also change these rates annually.
There are three methods insurance companies use to decide Medigap supplement insurance policy premiums:
- Community-Rated (No Age-Rated) Pricing: Your premium is not based on age, but it may increase due to inflation and other factors.*
- Issue-Age-Rated (Entry Age-Rated) Pricing: Premiums are lower for younger buyers and will not increase based on age—but they may increase due to inflation and other factors.*
- Attained-Age-Rated Pricing: Premiums are lower for younger buyers but increase with age, inflation, and other factors.*
*Some other factors that could affect pricing include deductible amounts (if any), discounts, and guaranteed issue rights.
So what does Medicare supplemental insurance cost? That also depends on where you live.
We analyzed available supplement plans by state. You can learn more about Medigap and other Medicare insurance plan rates by visiting our plans by state page and selecting your state from the drop-down menu.
What if you have Medicare Advantage?
Like Medigap, many Medicare Advantage (MA) plans cover costs that Original Medicare doesn’t. You can purchase MA (Medicare Part C) plans that feature low or $0 deductibles and low copayments. Many of these plans also provide additional coverage, such as dental, vision, and long-term care — services that Medicare Parts A and B don’t.
Unfortunately, beneficiaries can’t use Medicare Advantage with other parts of Medicare, such as Parts A, B, D, and Medigap. If you want to enroll in a Medigap plan, you’ll have to leave Medicare Advantage and enroll in Original Medicare first—before your Medigap plan goes into effect.
The good news is, a few “innovative” Medigap plans can help you get a few of the extras Medicare Advantage covers while holding on to your Original Medicare coverage.
To learn more about Medicare Advantage, check out our Medicare Advantage Plans guide.
How to get coverage
Your first chance to enroll is after your Initial Enrollment Period, during your Medigap Open Enrollment Period.
If you want Medigap coverage, you’ll have to first enroll in Medicare Part B. Then, you’ll have to enroll in a Medicare Supplemental plan within six months if you want all protections and guarantees offered by the federal government.
During these six months, insurance companies cannot delay your coverage start date, charge you higher premiums, or deny you a policy due to your health. These protections, called “guaranteed issue rights,” allow you to buy any Medigap plan sold in your state.
If you don’t enroll during your Medigap Open Enrollment Period, you may have to pay more to get a plan, and insurance companies can deny you coverage for health conditions.
Below are three examples of open enrollment periods that may apply, depending on your situation.
Example #1: You turn 65 next year on March 9 and plan to sign up for Part B right away.
Your Medigap open enrollment period begins March 1 (the month you turn 65)—as long as you enroll in Part B during your Initial Enrollment Period.
Example #2: You turned 65 one month ago and haven’t signed up for Part B.
Your open enrollment period begins the first of the month that you enroll in Part B. Note that your Part B Initial Enrollment Period ends three months after your 65th birthday month. If you miss this period, you’ll pay a penalty to sign up for Part B later—and risk losing federal protections for enrolling in a Medigap Plan.
Example #3: You didn’t sign up for supplemental insurance during your Medigap open enrollment period.
You may be able to apply for a plan outside of open enrollment. But unless you have guaranteed issue rights, insurance companies may ask you to answer health questions and then charge you higher premiums or deny you coverage for existing conditions.
Which companies offer Medigap plans?
You can get a Medigap policy from many companies nationwide. We work with several companies and can help you find the coverage that’s right for your needs. Each company may not offer all ten types of plans, but they all provide at least Plan A coverage.
Contact us today to find the right Medicare Supplement plan for your needs. Talk to a licensed agent at 855-802-1206.
- gov, “How to Compare Medigap Policies ”
- Medigap plans are standardized differently in Massachusetts, Michigan, and Wisconsin.
- You may be able to purchase a high-deductible version of Plan F. You must meet the yearly deductible ($2,300 in 2019) before your plan starts to pay. With Plan N, you must pay a copayment for certain services, including up to $20 for some doctor visits and up to $50 for ER visits without inpatient admission.
- Once you meet the annual out-of-pocket limit, your plan pays 100% of your covered services for the year.