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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, come in.
What is Medigap?
Medigap fills the gaps in Original federal Medicare program. These supplemental insurance plans, offered by private insurance companies, can help you manage the costs associated with deductibles, coinsurance, and copays.
By understanding the different Medigap plans available and how they work, you can make informed decisions to ensure you have the comprehensive healthcare coverage you deserve throughout your retirement.
Medicare Part A Gaps: Hospital and Skilled Nursing Fees
Gap 1: The $1,736 deductible covers up to 60 days in the hospital, whether you stay in the hospital for one day or 60 days.
Gap 2: If you stay in the hospital beyond 60 days, you’re now in the second gap, where a $434 daily copay applies to days 61 to 90. If your hospital stay is over 90 days, you’ll face a daily $868 copay for days 91 – 150.
Gap 3: Relates to skilled nursing. While Medicare covers the first 20 days of skilled nursing for free, days 21 to 100 accrue a daily $217 copay.
Medicare Part B Gaps: Outpatient and Doctor Services
Gap 4: Encompasses the annual $283 deductible.
Gap 5: Once you meet the Part B deductible, Medicare transforms into an 80/20 plan, with you footing 20% of the bill. This gap, known as coinsurance, never stops.
Gap 6: Excess out-of-pocket expenses occur when a doctor sees you as a Medicare patient but does not take Medicare-approved reimbursement rates as full payment. These can be up to an additional 15% of the bill, which you’re responsible for covering.
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 a Medicare 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. However, the average monthly premium for a Medigap policy is $155.
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 top Medicare Supplement plans that many Medicare beneficiaries opt for. 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’s also the most expensive Medigap plan, averaging about $175 per month.
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. The G Plan also boasts a slightly lower premium than Plan F, with an average monthly premium of $125.
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. Beneficiaries with the N Plan typically see an average $100 monthly premium.
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 choosing a plan to fill the gaps Original Medicare leaves behind, people often choose between a Supplemental plan or a Medicare Advantage plan. Both plans can help minimize your financial liability, but they approach it differently:
Structure: Medigap is supplemental insurance that works alongside Original Medicare (Parts A & B). You pay a separate premium for a Medigap plan which helps cover costs like deductibles, coinsurance, and copays. In contrast, Medicare Advantage plans are an alternative to Original Medicare. You enroll in a plan offered by a private insurance company, and it becomes your primary coverage.
Networks: Medigap plans typically allow you to see any doctor or healthcare provider who accepts Medicare. Medicare Advantage plans often have provider networks that limit the number of covered medical professionals you can see with limited exceptions for emergencies.
Costs: Many Medicare Advantage plans have a $0 or lower cost premium than many Medigap plans and may come with allowances for medications as well as dental, vision, and hearing services. Medigap plans typically cost more and require additional prescription drug plans and other ancillary services, but the out-of-pocket costs tend to be less than those on an Advantage plan.
When it comes to which plan you should choose, you’ll have to weigh your needs and your budget. These factors can help you determine which of these plans are right for you.
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.
Don’t wait to ensure you have the comprehensive healthcare coverage you deserve throughout your retirement. Download our free “Complete Guide to Medicare” for a deeper dive into the Medicare System, coverage options, and average costs. Take control of your healthcare future with Medicare School!
Looking for personalized help? Schedule a call with one of our Medicare guides, or give us a call today.
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 best time is during your Medigap Open Enrollment Period, which starts the month you turn 65 and are enrolled in Medicare Part B. During this time, you can get coverage without medical underwriting.
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.