Medicare Supplement plans, also known as Medigap policies, are designed to help individuals enrolled in Original Medicare (Part A and Part B) cover the out-of-pocket costs that Medicare does not fully pay for. These plans are offered by private insurance companies and can help pay for expenses such as deductibles, copayments, and coinsurance, which can add up quickly and become a financial burden for some Medicare beneficiaries. Medicare Supplement plans are standardized and offer different levels of coverage, making it easier for beneficiaries to compare plans and choose the one that best meets their healthcare needs and budget. In this post, we’ll take a closer look at what Medicare Supplement plans are, what they cover, and how to choose the right plan for you, in case you decide to enroll in one.
Medicare Supplement plans
There are 10 standardized Medigap plans, labeled A, B, C, D, F, G, K, L, M, and N, which are available in most states. When we say that Medigap plans are standardized, we mean that each plan offers the same basic benefits, regardless of which insurance company is selling the plan. For example, if you enroll in a Plan C with one insurance company, the benefits of Plan C will be the same if you enroll in it with a different insurance company. The only difference between plans is the cost and availability, which can vary by the insurance company and location. This standardization makes it easier for consumers to compare plans and choose the one that best meets their needs.
We will now go over all ten Medigap plans and give you insight into the key benefits each of them provides.
Plan A
Medigap Plan A is the most basic Medigap plan, and it provides the following benefits to help cover costs that Original Medicare (Part A and Part B) doesn’t pay for:
- Medicare Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used up
- Medicare Part B coinsurance or copayment
- First three pints of blood used in a medical procedure
It’s important to note that Medigap Plan A doesn’t cover all out-of-pocket costs, so beneficiaries may still be responsible for paying deductibles, excess charges, and other costs.
Plan B
Medigap Plan B provides a slightly higher level of coverage than Medigap Plan A, and it covers the following benefits to help cover costs that Original Medicare (Part A and Part B) doesn’t pay for:
- Medicare Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used up
- Medicare Part B coinsurance or copayment
- First three pints of blood used in a medical procedure
- Part A hospice care coinsurance or copayment
Like Plan A, Medigap Plan B doesn’t cover all out-of-pocket costs, so beneficiaries may still be responsible for paying deductibles, excess charges, and other costs
Plan C
As of 2020, Medigap Plan C is no longer available for new enrollees, but those who enrolled in the plan before this date may keep their coverage. Medigap Plan C was one of the most comprehensive Medigap plans, offering coverage for the following benefits to help cover costs that Original Medicare (Part A and Part B) doesn’t pay for:
- Medicare Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used up
- Medicare Part B coinsurance or copayment
- First three pints of blood used in a medical procedure
- Part A hospice care coinsurance or copayment
- Skilled nursing facility care coinsurance
- Medicare Part A deductible
- Medicare Part B deductible
- Medicare Part B excess charges for doctors who do not accept Medicare assignment
Although Medigap Plan C is no longer available, other Medigap plans offer similar benefits, and beneficiaries can still enroll in Medigap Plans D, F, G, or N, which provide a range of coverage options to help pay for out-of-pocket costs not covered by Original Medicare.
Plan D
Medigap Plan D is a standardized Medigap plan that provides coverage for the following benefits to help cover costs that Original Medicare (Part A and Part B) doesn’t pay for:
- Medicare Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used up
- Medicare Part B coinsurance or copayment
- First three pints of blood used in a medical procedure
- Part A hospice care coinsurance or copayment
- Skilled nursing facility care coinsurance
Medigap Plan D does not cover the Medicare Part B deductible or excess charges, so beneficiaries are responsible for paying those costs out of pocket.
Plan F
Medigap Plan F is a comprehensive Medigap plan that offers the highest level of coverage available. It provides coverage for the following benefits to help cover costs that Original Medicare (Part A and Part B) doesn’t pay for:
- Medicare Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used up
- Medicare Part B coinsurance or copayment
- First three pints of blood used in a medical procedure
- Part A hospice care coinsurance or copayment
- Skilled nursing facility care coinsurance
- Medicare Part A deductible
- Medicare Part B deductible
- Medicare Part B excess charges for doctors who do not accept Medicare assignment
Medigap Plan F offers the most comprehensive coverage, which means that it can be more expensive than other plans. However, it can also provide the most financial protection, as it covers nearly all out-of-pocket costs that beneficiaries may face. It’s important to note that as of 2020, new enrollees are no longer able to enroll in Medigap Plan F, but those who enrolled in the plan before this date may keep their coverage. There is also a version of High-deductible Plan F and Plan G as well.
Plan G
Medigap Plan G is together with Plan N one of the most popular standardized Medigap plans that provide coverage for the following benefits to help cover costs that Original Medicare (Part A and Part B) doesn’t pay for:
- Medicare Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used up
- Medicare Part B coinsurance or copayment
- Part A hospice care coinsurance or copayment
- Skilled nursing facility care coinsurance
- Medicare Part A deductible
- Medicare Part B excess charges for doctors who do not accept Medicare assignment
Medigap Plan G does not cover the Medicare Part B deductible, so beneficiaries are responsible for paying that cost out of pocket. However, it provides coverage for most other out-of-pocket costs that beneficiaries may face, which can help provide financial protection and peace of mind.
Plan K
Medigap Plan K is a standardized Medigap plan that provides a lower level of coverage than some of the other Medigap plans. It provides coverage for the following benefits to help cover costs that Original Medicare (Part A and Part B) doesn’t pay for:
- Medicare Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used up
- 50% of Medicare Part B coinsurance or copayment
- First three pints of blood used in a medical procedure
- Part A hospice care coinsurance or copayment
- 50% of skilled nursing facility care coinsurance
- 50% of Medicare Part A deductible
- 50% of Medicare Part B deductible
Because Medigap Plan K provides a lower level of coverage than some of the other Medigap plans, its premiums are typically lower as well. However, beneficiaries who choose this plan should be prepared to pay a higher share of their out-of-pocket costs.
Plan L
Medigap Plan L is a standardized Medigap plan that provides a lower level of coverage than some of the other Medigap plans. It provides coverage for the following benefits to help cover costs that Original Medicare (Part A and Part B) doesn’t pay for:
- Medicare Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used up
- 75% of Medicare Part B coinsurance or copayment
- First three pints of blood used in a medical procedure
- Part A hospice care coinsurance or copayment
- 75% of skilled nursing facility care coinsurance
- 75% of Medicare Part A deductible
- 75% of Medicare Part B deductible
Medigap Plan L provides a lower level of coverage than some of the other Medigap plans, which means that its premiums are typically lower as well. However, beneficiaries who choose this plan should be prepared to pay a higher share of their out-of-pocket costs.
Plan M
Medigap Plan M is a type of Medicare Supplement insurance policy that provides coverage for certain out-of-pocket costs that are not covered by Original Medicare, such as deductibles and copayments. Specifically, Plan M covers 50% of the Medicare Part A deductible, as well as the coinsurance or copayment amounts for Medicare Part A hospital costs and for skilled nursing facility care under Medicare Part A. It also covers 50% of the Medicare Part B coinsurance or copayment and includes coverage for the first three pints of blood each year. However, it does not cover the Medicare Part B deductible or excess charges that may be billed by healthcare providers who do not accept Medicare assignment.
Plan N
Medigap Plan N is a type of Medicare Supplement insurance policy that provides coverage for certain out-of-pocket costs that are not covered by Original Medicare, such as deductibles and copayments. Specifically, Plan N covers the Medicare Part A coinsurance and hospital costs for up to an additional 365 days after Medicare benefits are exhausted, as well as the coinsurance or copayment amounts for Medicare Part B services, except for certain office visits and emergency room visits that may require a copayment. It also covers the cost of the first three pints of blood each year and includes coverage for skilled nursing facility care coinsurance under Medicare Part A. However, it does not cover the Medicare Part B deductible, excess charges that may be billed by healthcare providers who do not accept Medicare assignment, or any Part B charges above the Medicare-approved amount for certain services.
Medicare Supplement Insurance Eligibility and Enrollment
To be eligible for a Medicare supplement insurance plan, also known as a Medigap plan, you must be enrolled in Original Medicare (Part A and Part B). You must also be at least 65 years old or have a qualifying disability. In addition, you must apply for a Medigap plan during your initial enrollment period, which is the six-month period that begins on the first day of the month in which you are both 65 or older and enrolled in Part B. During this period, you have a guaranteed right to purchase any Medigap policy that is sold in your state, regardless of your health status or pre-existing conditions. After this initial enrollment period, you may still be eligible for a Medigap plan, but you may be subject to medical underwriting, which means that the insurance company can use your health history to determine your eligibility and premium rates.
There are several other enrollment periods during which you may be eligible to enroll in or change your Medigap plan. These include the annual open enrollment period, which runs from October 15th to December 7th each year and allows you to switch from one Medigap plan to another or to enroll in a new plan for the first time.
Finally, there are special enrollment periods for certain life events, such as moving to a new state or losing your current health coverage. It’s important to be aware of these enrollment periods and to enroll in a Medigap plan during a period when you are eligible, as missing a deadline may result in higher premiums or denial of coverage.
Are Medicare Supplement plans right for you?
Medicare supplement plans help cover the out-of-pocket costs that are not covered by Original Medicare, such as deductibles, copayments, and coinsurance. These costs can add up quickly, especially for individuals with chronic conditions or who require frequent medical care. Medigap plans can provide peace of mind by helping to reduce or eliminate these costs, and by providing additional benefits that are not covered by Original Medicare, such as foreign travel emergency coverage. These are some groups of people who could benefit greatly from purchasing a Medicare Supplement Plan:
Individuals who have frequent or ongoing medical needs
If you have a chronic condition or require frequent medical care, you may find that your out-of-pocket costs under Original Medicare (Part A and Part B) can be high. A Medigap plan can help cover some of these costs, providing you with more predictable and manageable healthcare expenses.
Individuals who travel frequently
If you travel outside of the United States, you may find that Original Medicare does not provide coverage for medical care received in other countries. Some Medigap plans offer foreign travel emergency coverage, which can provide you with peace of mind while traveling abroad.
Individuals who want more predictable healthcare costs
With a Medicare supplement plan, you can have a better understanding of what your healthcare costs will be, as Medigap plans to provide more comprehensive coverage than Original Medicare alone. This can make it easier to budget for your healthcare expenses and avoid unexpected bills.
- Individuals who want more healthcare options: With a Medigap plan, you can choose any healthcare provider who accepts Medicare, as long as they are accepting new patients. This gives you greater flexibility in choosing doctors and specialists who meet your specific healthcare needs.
Final Thoughts
It’s important to note that not everyone needs a Medicare supplement plan, and it’s important to evaluate your individual healthcare needs and budget to determine if a Medigap plan is right for you. With the help of this overview and your own contemplation over your healthcare needs and your budget, we hope you get a better picture of whether Medicare Supplement plans are right for you or not. Another “resource” you can use is Medicare Insurance agents whose main job is helping you make an individualized insurance plan according to your needs.