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Medicare Supplement Plans
Considering a Medicare Supplement Plan to fill the gaps in Original Medicare? This guide will tell you everything you need to know about Supplemental plans and whether they’re right for you.
As you approach Medicare enrollment, navigating the various parts and options can feel overwhelming. While Medicare Parts A and B cover a significant portion of your healthcare expenses, there are still out-of-pocket costs to consider. This is where Medicare Supplement plans, also known as Medigap plans, are an option for you to consider.
What is Medigap?
Medicare Supplement (Medigap) plans are designed to help cover certain out-of-pocket costs associated with Original Medicare. These plans are offered by private insurance companies and may help with expenses such as deductibles, coinsurance, and copayments.
By understanding how Medigap plans work and what they may cover, you can better evaluate your options and choose coverage that aligns with your healthcare needs and financial situation.
Medicare Part A Gaps: Hospital and Skilled Nursing Fees
Gap 1: Inpatient Hospital Deductible
Medicare Part A generally includes a deductible for each benefit period, which applies to inpatient hospital stays. Once the deductible is met, Medicare may cover eligible inpatient services for a limited number of days, depending on the benefit period and continued eligibility.
Gap 2: Extended Hospital Stays
If your hospital stay extends beyond the initial covered period, additional cost-sharing may apply.
- For days beyond the initial coverage period, a daily coinsurance amount may be required
- After a certain number of days, higher daily coinsurance amounts may apply
These amounts can change each year and depend on Medicare’s current cost structure.
Gap 3: Skilled Nursing Facility Care
Medicare may cover skilled nursing facility care in limited situations when specific eligibility requirements are met, including a qualifying inpatient hospital stay.
- For the first portion of covered days, you may have no coinsurance for the covered services
- For later days, a daily coinsurance may apply
Coverage depends on continued eligibility and the need for skilled care. Medicare generally does not cover skilled nursing facility care beyond a certain number of days within a benefit period.
Medicare Part B Gaps: Outpatient and Doctor Services
Gap 4: Medicare Part B Deductible
Medicare Part B includes an annual deductible that must generally be met before certain services are covered. The deductible amount can change each year.
Gap 5: Part B Coinsurance
After the Part B deductible is met, Medicare may cover a portion of the Medicare-approved amount for many covered services, and you may be responsible for a percentage of the cost, typically around 20%, depending on the service and whether Medicare requirements are met.
This cost-sharing, known as coinsurance, may apply to many Part B-covered services.
Gap 6: Excess Charges
In some cases, a healthcare provider may not accept Medicare-approved amounts as full payment. When this occurs, you may be responsible for additional charges, sometimes referred to as excess charges, which can be up to a certain percentage above the Medicare-approved amount, depending on the provider and state rules.
How Do Medicare Supplement Plans Work?
Because Medigap plans help to supplement Medicare, they tend to work similarly to Original Medicare.
When you go to a healthcare provider, you need to bring your Medicare A and B card and Medigap card. The provider will first bill Medicare for the services you received. Once Medicare pays its portion, it will generate the remaining balance and transfer it to your chosen Medicare Supplement plan company. The plan you select will ultimately determine what you owe on your medical bill, if anything.
Medicare Supplement plans don’t require pre-authorization and are yours for life unless you fail to pay for them. They’re also portable, so you can receive the same coverage throughout the United States because they’re federally standardized plans, just like Original Medicare.
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When Can You Change Medicare Supplement Insurance Plans?
The good news is that you have the flexibility to change your Medicare Supplement insurance plan throughout the year. Technically, you can change your Medigap plan at any time, but you’ll likely be subject to medical underwriting. If you’re able to pass medical underwriting, you may face a higher premium based on your current health status.
To make informed decisions about changing your Medigap plan, consider factors like changes in your healthcare needs and cost fluctuations between plans. Consulting with an independent broker can also help you weigh your options and ensure a smooth transition if you decide to switch plans.
How Much are Medicare Supplement Insurance Plans?
The cost of your Medicare Supplement plan depends on your Medigap carrier, where you live, your health (if you moved to a Medicare Supplement outside of your Initial Enrollment Period), and several other factors. Contact a licensed agent to receive current quotes based on these factors.
Top Medicare Supplement Health Insurance Plans
There are eight Medicare Supplement plans; however, two of the eight plans are only available to those born on or before January 1, 1955. There are three plans that are popular among Medicare beneficiaries. Keep in mind that plan coverage stays the same from carrier to carrier, but the premiums may vary based on your carrier.
What is Medicare Supplement Insurance Plan F?
Plan F is probably one of the most sought-after Supplemental plans because it covers all six of the Original Medicare gaps, offering the most comprehensive coverage. However, this plan has since been done away with and is only available to those whose birthday is on or before January 1, 1955; otherwise, you do not qualify.
Because of how comprehensive this coverage is, it can also be the most expensive Medigap plan.
What is Medicare Supplement Insurance Plan G?
The G Plan is the next most comprehensive Medigap plan and is typically the most popular Medicare Supplement plan among those who are not eligible for Plan F. It covers all but one gap—the $283 Medicare Part B deductible.
What is Medicare Supplement Insurance Plan N?
The next most popular plan for those not eligible for Plan F is the N Plan. This Medigap plan covers four of the six gaps, addressing everything except the Part B deductible and excess charges. This Supplemental plan also comes with copays—$20 for doctor visits and $50 for ER visits.
While this plan is the more affordable of the popular Medigap plans, it’s important to note that the excess charges are still your responsibility, which could lead to unexpected out-of-pocket costs.
What is the Difference Between Medigap and Medicare Advantage Health Insurance?
When reviewing options to help manage out-of-pocket costs under Original Medicare, individuals often compare Medicare Supplement (Medigap) plans and Medicare Advantage plans. These options approach coverage differently.
Structure: Medigap plans are supplemental insurance designed to work alongside Original Medicare (Parts A and B). These plans may help cover certain out-of-pocket costs, such as deductibles, coinsurance, and copayments, and require a separate monthly premium.
Medicare Advantage plans are offered by private insurance companies as an alternative way to receive Medicare-covered Part A and Part B benefits. These plans operate under Medicare rules, and coverage details can vary by plan.
Networks: Medigap plans generally allow you to see any provider that accepts Medicare.
Medicare Advantage plans often use provider networks. Depending on the plan, you may need to use in-network providers for the lowest cost, although some plans may allow limited out-of-network coverage.
Costs: Costs can vary depending on the type of plan, location, and individual circumstances.
When comparing these options, it’s important to consider your healthcare needs, provider preferences, and budget. Reviewing how each type of plan works can help you evaluate which option aligns with your situation.
Learn About Your Medigap Options With Medicare School
If you’re looking for a way to fill the gaps Original Medicare leaves behind, but are feeling overwhelmed by your options, Medicare School can help you explore your Medigap options with confidence. Take a look through our free resources or sign up for our virtual Medicare Essentials workshop.
Medigap FAQs
What is Medicare Supplement Insurance (Medigap)?
Medigap is private health insurance that helps cover costs not paid by Original Medicare, such as copayments, coinsurance, and deductibles.
Who is eligible for a Medigap plan?
You must be enrolled in Medicare Part A and Part B to purchase a Medigap policy. Medigap is not available to those with Medicare Advantage plans.
When is the best time to enroll in Medigap?
The Medigap Open Enrollment Period begins when your Medicare Part B becomes active and you are age 65 or older. During this 6-month period, you generally have guaranteed issue rights, meaning insurance companies cannot deny coverage or charge more based on your health.
Do Medigap plans cover prescription drugs?
No, Medigap does not cover prescription drugs. You’ll need a separate Medicare Part D plan for prescription drug coverage.
Can I change my Medigap plan later?
Yes, but in most cases, you may have to go through medical underwriting unless you qualify for a guaranteed issue right.
Do all Medigap plans offer the same coverage?
Yes, all Medigap plans of the same letter (A, B, C, etc.) offer the same basic benefits, regardless of the insurance company. However, prices may vary between providers.