Medicare Supplement Insurance plans, often called Medigap policies, are private health insurance policies designed to help cover some of the out-of-pocket costs that Original Medicare (Part A and Part B) does not pay.

Here is a detailed breakdown of what Medicare Supplement Plans are and what they entail:

 

1. The Core Purpose: Filling the “Gaps” in Original Medicare

 

Original Medicare pays for a significant portion of your health care, but not all of it. You are responsible for cost-sharing amounts, which can add up quickly. Medigap policies are designed to cover these “gaps,” which typically include:

  • Copayments and Coinsurance: Your share of the cost for covered services (e.g., 20% of the Medicare-approved amount for Part B services).
  • Deductibles: The amounts you must pay out-of-pocket before Original Medicare begins to pay (e.g., the Part A and Part B deductibles).
  • Extended Hospital Stays: Medigap plans cover the Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are exhausted.

 

2. How Medigap Plans Work

 

  • You Must Have Original Medicare: You must be enrolled in both Medicare Part A (Hospital Insurance) and Part B (Medical Insurance) to purchase a Medigap policy.
  • Private Insurance: Medigap policies are sold by private insurance companies, not the government.
  • Separate Premium: You pay a monthly premium to the private insurance company for the Medigap policy, in addition to the monthly Part B premium you pay to Medicare.
  • Standardized Benefits: Medigap policies are standardized by the federal government. This means that a Plan G from one insurance company offers the exact same basic benefits as a Plan G from any other company, regardless of where you live (except in Massachusetts, Minnesota, and Wisconsin, which have different standardization). The only difference between companies for the same lettered plan is the premium price and customer service.
  • Guaranteed Renewability: As long as you pay your premiums, your Medigap policy is guaranteed renewable, meaning the insurance company cannot cancel it, even if your health status changes.
  • No Network Restrictions: Medigap works with Original Medicare. If a doctor or hospital accepts Original Medicare, they must accept your Medigap policy. You do not need a referral to see specialists.
  • Single Person Coverage: A Medigap policy covers only one person. If you and your spouse both want coverage, you must each buy a separate policy.
  • No Part D Coverage: Medigap policies do not include prescription drug coverage. If you want drug coverage, you must enroll in a separate Medicare Prescription Drug Plan (Part D).

 

3. The Standardized Plans (A, B, D, G, K, L, M, N)

 

There are up to 10 standardized plans, labeled with letters (A, B, C, D, F, G, K, L, M, N). Each letter represents a different set of benefits.

Key Popular Plans (as of 2020 and later eligibility):

  • Plan G: Offers the most comprehensive coverage for those new to Medicare since January 1, 2020. It covers nearly all out-of-pocket costs except for the Medicare Part B deductible.
  • Plan N: Offers a lower premium in exchange for more cost-sharing. It covers 100% of the Part B coinsurance, except for a copayment of up to $20 for some office visits and up to $50 for emergency room visits that don’t result in an inpatient admission. It also does not cover the Part B deductible or Part B excess charges.
  • Plan F and Plan C: These plans, which covered the Part B deductible, are no longer available to people who were newly eligible for Medicare on or after January 1, 2020. If you were eligible before that date, you may still be able to buy or keep one of these plans.

Other Potential Benefits Covered by Certain Plans:

  • Part A Deductible
  • Part B Deductible (Only available on Plans C and F for those eligible before 2020)
  • Part B Excess Charges (The difference between the amount a doctor charges and the Medicare-approved amount; covered by Plans F and G)
  • Skilled Nursing Facility Care Coinsurance
  • Foreign Travel Emergency Care (80% coverage up to plan limits)
  • Out-of-Pocket Limits (Plans K and L have a maximum annual out-of-pocket limit, after which the plan pays 100% of covered services).

 

4. What Medigap Plans Generally Do NOT Cover

 

Medigap policies generally do not cover:

  • Long-term care (like nursing home care)
  • Vision or dental care
  • Hearing aids
  • Eyeglasses
  • Private-duty nursing
  • Prescription drugs (must be covered by a separate Part D plan)

 

5. When to Enroll

 

The best time to buy a Medigap policy is during your Medigap Open Enrollment Period.

  • This is a 6-month period that starts the first month you are age 65 or older and are enrolled in Medicare Part B.
  • During this period, you have a guaranteed issue right, meaning:
    • An insurance company cannot refuse to sell you any Medigap policy they offer.
    • They cannot charge you more based on pre-existing health conditions.

If you miss this enrollment period, you may have to answer health questions (medical underwriting), and an insurance company could refuse to sell you a policy or charge you a higher premium due to health issues, unless you qualify for a different guaranteed issue right.