Original Medicare, Part A and B, pays for many of your health-care services and supplies, but it doesn’t pay for everything. That’s why you may want to consider getting a Medicare Supplement plan, also called Medigap. Unlike Original Medicare, a Medicare Supplement plan is offered through private insurance companies. These Medigap plans help pay some of the hospital and medical costs that Original Medicare doesn’t cover, such as copayments, coinsurance, and yearly deductibles.
Some Medicare Supplement plans also help pay for a few services that Original Medicare doesn’t cover, such as emergency overseas travel coverage or Part B excess charges. Two out of ten Medigap plans include a yearly out-of-pocket limit, which Original Medicare doesn’t include. Basically, a Medigap policy fills the “gaps” in Original Medicare coverage.
Here’s an overview of how Medicare Supplement plans work, the types of benefits they cover, and how to enroll.
How do Medicare Supplement (Medigap) plans work with Medicare?
Medigap plans supplement your Original Medicare benefits, which is why these policies are also called Medicare Supplement plans. You’ll need to be enrolled in Original Medicare to be eligible for Medigap coverage, and you’ll need to stay enrolled in Original Medicare for your hospital and medical coverage. Medicare Supplement plans aren’t meant to provide stand-alone benefits.
Depending on the state that you live in, you may not be able to get Medicare Supplement coverage if you’re under 65 and have Medicare because of disability, end-stage renal disease, or amyotrophic lateral sclerosis. States aren’t required to offer Medigap coverage to beneficiaries under 65. If you’re under 65 and enrolled in Original Medicare, check with your state’s insurance department to find out if you’re eligible to enroll in a Medicare Supplement plan.
Keep in mind that Medigap plans don’t include prescription drug coverage (Part D), so if you want help with your medication costs, you’ll need to enroll in a stand-alone Medicare Prescription Drug Plan. In addition, you can’t use your Medicare Supplement plan to pay for costs you may have with a Medicare Advantage plan. Medigap insurance can only be used to cover costs in Original Medicare.
If you have Original Medicare and a Medicare Supplement plan, Original Medicare will pay first, and your Medigap policy will fill in the cost gaps. For example, suppose you have a $5,000 ambulance bill, and you have already met the yearly Medicare Part B deductible. Medicare Part B will pay 80% of your ambulance bill. If you have a Medicare Supplement plan that covers Part B copayments and coinsurance costs, then your Medigap policy would then pay the remaining 20% coinsurance of your $5,000 ambulance bill. Some Medicare Supplement plans may also cover the Part B deductible.
What types of coverage are not Medicare Supplement plans?
As a Medicare beneficiary, you may also be enrolled in other types of coverage, either through the Medicare program or other sources, such as an employer. When you first sign up for Original Medicare, you’ll fill out a form called the Initial Enrollment Questionnaire and be asked whether you have other types of insurance. It’s important to include all other types of coverage you have in this questionnaire. Medicare uses this information when deciding who pays first when you receive health-care services.
Below is a list of other types of insurance you may have. Please note that these types of coverage are different from Medicare Supplement plans:
- Medicare Advantage plans (like an HMO or PPO)
- Medicare Prescription Drug Plans (Part D)
- Employer- or union-sponsored group coverage
- Veterans’ benefits
- Long-term care insurance policies
What benefits do Medicare Supplement plans cover?
Currently, there are 10 standardized Medigap plans, each represented by a letter (A, B, C, D, F, G, K, L, M, N; there’s also a high-deductible version of Plan F). These plans are available in most states; Massachusetts, Minnesota, and Wisconsin each have their own different set of standardized Medicare Supplement plans.
Coverage levels and premiums vary, but the benefits of each plan within a lettered category remain the same despite the insurance company or location. For example, Plan A benefits are the same in New Jersey as they are in Oregon. If a Medicare Supplement plan includes a certain benefit, this benefit is covered 100% unless otherwise specified.
In general, all Medicare Supplement plans cover the following benefits:
- Medicare Part A coinsurance and hospital costs (up to an additional 365 days after Medicare benefits are used)
- Medicare Part B coinsurance or copayment*
- Blood (first 3 pints)*
- Part A hospice care coinsurance or copayment*
*Coverage may be partial for some plans. Medigap Plan N covers the Part B coinsurance except for up to $20 copayment for some office visits and up to $50 copayment for emergency room visits that don’t result in an inpatient admission.
Some types of Medicare Supplement plans also cover:
- Skilled nursing facility care coinsurance
- Medicare Part A deductible
- Medicare Part B deductible
- Medicare Part B excess charges (the amount that a non-participating provider may charge above the Medicare-approved cost for a service)
- Foreign travel emergency (up to plan limits)
Two Medicare Supplement plans (Plan K and Plan L) include an out-of-pocket limit. Once your spending for Medicare-covered services reaches a certain amount, the Medigap plan will cover 100% of Medicare-covered costs for the rest of the year.
As mentioned, benefits vary by plan type. For a quick look at the benefits provided by standardized Medicare Supplement plans, please view this Medigap Plan Benefits Chart.
What benefits are not covered by Medicare Supplement plans?
Medigap policies generally do not cover the following health services and supplies:
- Long-term care (care in a nursing home)
- Routine vision or dental care
- Hearing aids
- Private-duty nursing
- Prescription drugs
Additional facts about Medicare Supplement plans
- You must have Medicare Part A and Part B to get a Medicare Supplement plan.
- Every Medigap policy must be clearly identified as “Medicare Supplement Insurance.”
- A Medicare Supplement plan can only cover one person, so if you are married, you and your spouse would need to buy separate policies.
- You can generally use your Medicare Supplement plan with any provider that accepts Medicare. However, some types of Medigap plans known as Medicare SELECT plans require you to only use doctors and hospitals in provider networks.
- Not all types of Medicare Supplement plans may be available in your state.
- Premium costs may vary by plan and location, even for the same standardized benefits.
- In general, Medicare Supplement plans are guaranteed renewable as long as you continue to pay your premium.
Now that you know more about Medicare Supplement plans, you may be wondering if one of these plans may be right for you.