Medicare Supplement Plans (Medigap)
Medicare Supplement plans cover 11 million Medicare beneficiaries. Also referred to as Medigap plans, these policies help pay for your share of Medicare expenses, such as your deductibles and co-insurance. Medicare supplement insurance plans are available for purchase in all 50 states and are very popular with people who want little to no copays when they access healthcare services. Many people new to Medicare feel surprised to find that Medicare covers only 80% of your Part B expenses. The other 20% can be devastating to you financially if a serious illness arises. You can choose a Medicare Supplement that will pay some or all of that 20% for you, among other things. Supplemental insurance for seniors with Medicare essentially buys you peace of mind by eliminating that cost-sharing responsibility.
Medicare Part B only covers 80% of your medical expenses. Medicare Supplement (Medigap) plans help pick up the excess costs.
Also, during your one-time open enrollment window, you are guaranteed the right to purchase a Medicare Supplement plan. Your health status does not matter when you buy a plan during this six-month window.
What is a Medicare Supplement
A Medicare Supplement also called a Medigap Policy fills in the gaps in your coverage that is left over after original medicare pays their share.
Because you are required to pay for some things, like 20% of outpatient expenses, medigap policies were created to pay those expenses for you. Folks on medicare supplements don’t stress out about a big bill or thousands coinsurance, deductibles, or any surprises that might blindside them.
Some of the primary advantages of a traditional Medicare Supplement policy are:
- Freedom to choose your own doctors and hospitals
- No referrals are required to see a specialist
- Predictable out-of-pocket expenses for Medicare-covered services
(and zero out-of-pocket with Plan F)
- Nationwide coverage – you can use it anywhere in the United States
- Guaranteed renewability – the insurance company can never drop you or change your coverage due to a health condition
Supplemental insurance for seniors with Medicare is easiest and most predictable way to budget healthcare costs. Seniors on popular medicare supplement plan G pay a monthly premium upfront but on the back end the only costs they’ll have are the $226 annual Part B deductible.
Some other things to know about Medicare Supplement insurance:
You must have Part A and Part B to buy a Medigap policy. Medicare Supplement plans cover only one person. Your spouse must have his or her own individual policy. You can drop your supplement at any time. There is no annual election period for Medicare Supplement plans. The Annual Election Period in the fall is for drug plans. It does not apply to Medicare supplements in any way. Many carriers offer household discounts if two or more people enroll in Medicare supplemental plans from the same company Plans do not include Part D, so you’ll add a separate standalone Part D drug plan.
Medicare Supplemental Plans Coverage
Medicare Supplement plans pay after Medicare approves and pays its share of your claim. Medigap insurance, helps to cover the gaps in Medicare that normally you would have to pay. This includes things like deductibles, coinsurance and copays.
You can use your Medicare Supplement plan at any provider in the nation that accepts Medicare. This makes Medicare Supplements great for snowbirds or seniors traveling to visit grandkids.
Medicare Supplements plans do not include retail drug coverage, so we advise strongly you enroll in a standalone Part D drug plan for your medications even if you don’t take any, because there is a lifetime penalty added to your monthly premium waiting for you down the road if you don’t enroll in drug plan during your initial enrollment period. A Medicare Supplement does not cover routine, dental, vision or hearing services either. Since Medicare itself does not cover these items, your supplement cannot pay anything toward them either.
Medicare Supplements Plans – Standardized Plans
To see a list of all the Medicare supplemental plans available take a look at our Medigap supplement chart above. This chart appears in the “Choosing a Medigap,” booklet published by Medicare itself. It details the benefits covered by each different plan.
*Medigap Plan F and Plan G are also offered as a high-deductible plan (HDF or HDG) by some insurance companies in some states. If you choose the high-deductible option, it means you must pay for Medicare-covered costs (coinsurance, copayments, deductibles) up to the deductible amount of $2700 in 2023 before your policy will pay anything.
***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 an inpatient admission. You can find this chart in Medicare’s Choosing a Medigap booklet as well.
What are the different Medicare Supplements Plans?
Each Medicare Supplement plan in the chart above has a letter, A – N. Each plan letter provides a different set of benefits. However, each lettered plan must have the same standardized coverage regardless of which insurance company you choose. For example, Medicare Supplement Plan N at Blue Cross Blue Shield has the same benefits as Plan N from United Healthcare.
The Medicare Supplement chart below shows the 10 standardized Medicare Supplement plans. These plans can be offered by insurance companies in most states. Wisconsin, Minnesota and Massachusetts have different options though.
There is one supplemental insurance plan that covers ALL OF the gaps, leaving you with nothing out of pocket, Plan F. There are others where you agree to do some cost-sharing and in return, you get a lower monthly premium. If you prefer something like this, in the middle, you could look at Plans G or N where you pay a few things yourself, in exchange for lower premiums.
How do I pick a Medicare Supplement plan?
Most people enroll in Medicare Supplement Plans F, G or N. That’s because these offer the most coverage. However, the reason for the choices is to let you decide what is most important to you. Some beneficiaries want a plan that covers all the gaps and leaves them with no worries about the cost of medical procedures. Other beneficiaries prefer a Medicare supplement plan in which they cover some of their deductibles and copays out of pocket in order to achieve lower premiums. There is no right or wrong here.
Watch Video Below on How to Choose a Medicare Supplement
Medicare Supplemental Plans – Open Enrollment
After this window passes, however, and you decide to enroll in a medicare supplement with any of the companies, they can decline you for certain health conditions or particular medications you take that are on the companies decline list. That is why the medicare and you book states that open enrollment is the best time to enroll.