Medicare Supplement Insurance basics
Original Medicare (Part A and Part B) covers most, but not all, of the health care costs you may face. Medicare Supplement Insurance, also called Medigap, helps fill the "gaps" in coverage to mitigate costs, and offer Medicare beneficiaries peace of mind.
What Medicare Supplement Plans cover
Medicare Supplement plans work with Medicare Part A and Part B. This differs from Medicare Advantage plans, which replace your Medicare benefits with private coverage. Medicare Supplement plans allow you to continue to receive the federal health care benefits while filling in the coverage gaps left behind by Parts A and B.
Medicare Supplement plans are priced and sold by private insurance companies, but the benefits of the plans are standardized across the nation and structured exactly the same despite the company. Because of this, Medigap policy holders can see any doctor who accepts Medicare patients—including those out of state. Medigap coverage goes with you anywhere you travel in the United States and is guaranteed for life if premiums are paid on time. Some Medigap plans also include international travel insurance coverage.
Medicare Supplement plan options and comparison chart
There are 10 standard Medicare Supplement plan types available in most states, each with an assigned letter from A to N (Plans E, H, I, and J are no longer sold and Plans F and C are only available to those who were eligible for Medicare prior to Jan. 1, 2020). While these letters sound similar to Medicare Parts A and B, they are completely separate plans.
Standardized basic benefits
All Medicare Supplement plans must include the same standardized basic benefits regardless of insurance company and location. Medigap plans do not cover Dental Vision, and Hearing insurance, long-term care, or prescription drug insurance, but they must cover at least a portion of the following basic benefits:
- Medicare Part A coinsurance costs up to a year after Medicare benefits are exhausted
- Medicare Part A hospice coinsurance care or copayments
- Medicare Part B coinsurance or copayments
- The first three pints of blood used in a medical procedure
Plan comparison and additional benefits
Some Medicare Supplement plans may include additional benefits and are much more comprehensive. The Medigap plan comparison chart provides a convenient, compact way to compare plans in order to find the best option.
Note: In Massachusetts, Minnesota, and Wisconsin, Medigap policies are standardized differently.
|Medigap Plans||A||B||C *||D||F * 1||G||K||L||M||N|
|Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used up||Yes||Yes||Yes||Yes||Yes||Yes||Yes||Yes||Yes||Yes|
|Part B coinsurance or copayment||Yes||Yes||Yes||Yes||Yes||Yes||50%||75%||Yes||Yes 3|
|Blood (first 3 pints)||Yes||Yes||Yes||Yes||Yes||Yes||50%||75%||Yes||Yes|
|Part A hospice care coinsurance or copayment||Yes||Yes||Yes||Yes||Yes||Yes||50%||75%||Yes||Yes|
|Skilled nursing facility care coinsurance||Yes||Yes||Yes||Yes||50%||75%||Yes||Yes|
|Part A deductible||Yes||Yes||Yes||Yes||Yes||50%||75%||50%||Yes|
|Part B deductible||Yes||Yes|
|Part B excess charge||Yes||Yes|
|Foreign travel exchange (up to plan limits)||80%||80%||80%||80%||80%||80%|
|Out-of-pocket limit 2||$5,880||$2,940|
* As of Jan. 1, 2020 Medicare Supplement plan types C and F will no longer be made available to beneficiaries who become Medicare-eligible after Dec. 31, 2019. For those who became Medicare-eligible prior to Jan. 1, 2020, Medicare Supplement plan types C and F will remain active and available for future enrollment.
1 Plan F also offers a high-deductible plan. If you choose this option, this means you must pay for Medicare-covered costs up to the deductible amount of $2,370 in 2021 before your Medigap plan pays anything.
2 After you meet your out-of-pocket yearly limit and your yearly Part B deductible, the Medigap plan pays 100% of covered services for the rest of the calendar year.
3 Plan N pays 100% of the Part B coinsurance, except for a copayment of up to $20 for some office visits and up to a $50 copayment for emergency room visits that don't result in inpatient admission.
Nearly two-thirds of Medigap policy holders traditionally enroll in Plan F because of its benefits and coverage. Unfortunately Plan F and Plan C are only available for those who became Medicare eligible prior to Jan. 1, 2020. The closest replacement for these plans would be Plan G or Plan N.
Those who became Medicare-eligible prior to 2020 may keep an existing Plan F or C and may also apply for a new Plan F or C, even from a different insurance company.
How and when to enroll in a Medicare Supplement plan
You cannot enroll in a Medicare Supplement policy until you have Medicare Part A and B, which for many people is at age 65. After you have Original Medicare, you can choose to enroll in a Medigap policy during your Medigap Open Enrollment Period.
Medigap Open Enrollment Period
Your Medigap Open Enrollment Period starts at the beginning of the first month that you are both 65 years old and are officially enrolled in Medicare Part B. It lasts for six months after this date. So for example, if you turn 65 in August but don’t start Medicare B until late September, your Medigap Open Enrollment Period will begin on October 1 and end April 1.
To help mitigate costs and get the best deal on your policy, you should enroll in a Medicare Supplement policy as soon as you are eligible.
During your six-month enrollment period, insurance companies are required by law to approve you for coverage regardless of any pre-existing conditions or health history. If you enroll after your Medigap Open Enrollment Period, (if, for example, you want to switch insurance carriers) you may have to answer health questions during a simple underwriting process, unless you have a guaranteed-issue right.
Guaranteed-issue rights are given in specific situations and make medical underwriting process unnecessary. These are usually situations where you lose coverage due to circumstances outside of your control or you are exercising a trial right. There are many situations where you could qualify for guaranteed issue. It’s best to connect with a licensed advisor if you think you may be eligible for one of these rights.
Delayed Part B coverage and Medigap
If you are waiting to enroll in Medicare Part B because you or your spouse are working and have coverage through your employer or union, your Medigap coverage will not begin until you officially enroll in Part B. But, if you enroll while you still have employee-sponsored coverage, your Medigap Open Enrollment Period will begin from that date, even if your employer coverage is still in place. We help people across the country navigate this type of decision every day.
Medicare Supplement basic costs
Medicare Supplement plan costs vary by company and plan letter. Like with most insurance, the plans with the highest benefit levels will typically be more expensive up front, but come with little to no out-of-pocket costs. If you want to pay a lower monthly premium and are okay with paying more as you go, you can choose a plan with fewer benefits but lower monthly costs.
How are costs calculated?
Although Medigap plans are federally standardized in terms of basic benefits, private insurance companies can charge different premiums. Factors that can affect your premium include your age, location, gender, and (in some states) whether you use tobacco products.
There are three pricing methods that affect long-term Medigap costs. When you enroll in a policy, you should make sure you understand which pricing method your plan follows. It’s worth noting that depending on where you live in the country, you may only have one of these options available.
- Attained-age-rated policies
These plans have premiums that increase as you age.
- Issue-age-rated policies
These plans have premiums that increase due to inflation, not due to aging.
- Community-rated policies
With these plans, everyone in an area is charged the same premium regardless of age.
How can I save on premiums?
Once you settle on the benefit level that best fits your health care needs, the easiest way to save money on Medicare Supplement insurance is to comparison shop different insurance companies. Simply put, this is where United Medicare Advisors can help. We save our clients an average of $634 when switching Medigap plans and have helped over 400,000 people nationwide navigate their options.
Having a Medicare Supplement plan in addition to your Original Medicare benefits helps to protect you from unexpected costs and allows you to focus on receiving the care you need without worry of financial burden. Because of the guaranteed coverage during your Medigap Open Enrollment Period, it's a great option for those with pre-existing conditions as well. Plus, it allows you to continue to receive the federal Medicare benefits that you have been paying toward throughout your working years.
Key advantages of Medicare Supplement:
- Guaranteed renewability each year
As long as you pay your premium, your coverage will continue year after year and cannot be cancelled (except in specific cases, like providing inaccurate information on your application).
- Simple, straightforward plan options
Because they are federally standardized, it’s fairly straightforward to understand and compare your options when it comes to Medigap coverage.
- Nationwide network of doctors and specialists
Medicare Supplement enrollees can visit any doctor that accepts Medicare coverage. Doctor or hospitals that accept Medicare are required to accept all Medigap plans, regardless of insurance carrier.
- More flexibility with treatment options
Some Medicare Advantage plans require you to choose a primary care physician, who has the final say on what providers you can see. Medigap plans allow you the flexibility to select any treatment option you prefer.
There are many benefits to having Medicare Supplement insurance, but of course each situation is different. If you have more questions, please contact one of our licensed agents.