How does Medicare supplement insurance work?


While Medicare Parts A and B (also called “Original Medicare”) cover some health care costs, they don’t pay for everything. That’s where an Medicare Supplement Insurance Plan may help. Medicare supplement insurance plans (also called “Medigap”) from private insurers complement your Medicare coverage. These plans help cover some of your out-of-pocket expenses not paid by Medicare.

Standardized Medicare supplement insurance plan (Medigap) benefits are set by the federal government. That means the basic benefit structure for each plan is the same, no matter which insurance company is selling it to you.


Some plan features are:

  • A choice of plans to meet your needs and budget now and in the future.
  • You’re able to keep your own doctor without network restrictions, as long as they accept Medicare patients.
  • Coverage goes with you when you travel in the U.S.
  • You are guaranteed coverage for life.
  • You may visit any specialist who accepts Medicare patients without a referral.

The benefits of a Medicare supplement plan.

All Medicare supplement plans provide these basic benefits:

  • Part A coinsurance and hospital costs (up to an additional 365 days after Medicare benefits are used)
  • Medicare Part B coinsurance or copayment
  • Cost of blood transfusions (first 3 pints)
  • Part A hospice/respite care coinsurance or copayment

Some plans may also provide additional benefits including:

  • Skilled nursing facility coinsurance or copayment
  • Part A deductible ($1340 in 2018)
  • Part B deductible ($183 in 2018)
  • Part B Excess Charges
  • Foreign travel emergency (up to plan limits)

Benefits and cost vary depending on the plan you choose.

You pay a monthly premium and some out-of-pocket costs.


Medicare supplement vs. Medicare Advantage

Medicare supplement (Medigap) and Medicare Advantage plans are different from one another. A Medicare supplement plan may be purchased if you have Medicare Parts A and B coverage. If you join a Medicare Advantage Plan, you’ll still have Medicare, but you’ll get your Medicare Part A and Medicare Part B coverage from the Medicare Advantage Plan, not Original Medicare, and sometimes prescription drug benefits are included with these plans.

You cannot have a Medicare Advantage plan and a Medicare supplement plan at the same time. Medicare supplement plans are sold by private companies, while Medicare Advantage Plans are offered by Medicare-approved private companies.


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