by Russell Noga | Updated November 27th, 2023
When you reach the age of 65, you’ll become eligible for Medicare. This health insurance program is funded by the United States federal government, and while it might cover a lot of the healthcare you’ll require as you age, it doesn’t cover everything. You’re expected to pay for the care and services that Medicare doesn’t cover; things like coinsurance, copays, and deductibles. These out-of-pocket expenses can really add up, but Medicare Supplement Insurance can help. These policies are designed to cover some of the expenses that aren’t covered by Medicare.
If you’re thinking about purchasing a Medicare Supplement Insurance plan, there’s no doubt that you have a lot of questions. In fact, the process of purchasing supplemental insurance for Medicare can be overwhelming. To help simplify things – and to help you make the right choice for your unique needs – in this guide, we cover the key details that you need to know about Medicare Supplemental Insurance.
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An Introduction to Medicare Supplemental Insurance
Also known as Medigap plans, Medicare Supplemental insurance policies are specifically designed to help beneficiaries cover the gaps in coverage for Medicare Part A and Part B (Original Medicare). Part A pays for care and services you’ll receive on an inpatient basis; hospital stays, for instance. Part B pays for care and services you’ll receive on an outpatient basis; visits to the doctors and certain types of medical equipment, for instance.
Original Medicare covers a lot of the costs that are associated with healthcare; however, it doesn’t cover all of the expenses. In fact, Medicare only covers 80 percent of the inpatient and outpatient care and services you’ll need. You’ll need to pay for the remaining expenses that aren’t covered by Part A and Part B yourself. Medicare Supplement Insurance plans can cover some of those out-of-pocket expenses.
Medigap policies are sold by private insurance companies. There are 10 different Medigap policies, named for letters, and each lettered plan provides specific benefits that the Centers for Medicare and Medicaid (CMS) require. CMS requires all lettered Medigap plans to provide the same benefits, no matter where they are purchased, and no matter which insurer they’re purchased from. Costs for Medicare Supplemental Insurance vary and depend on the lettered plan you are purchasing, as well as the insurer you purchase the policy from. Other factors can influence the cost of premiums, too.
It’s important to note that Medigap insurance isn’t a replacement for Original Medicare; it’s supplemental insurance, meaning that it supplements the coverage that isn’t covered by Part A and Part B. As such, you’ll have to pay a separate premium for a Medicare Supplemental Insurance policy, in addition to the premiums for Part A and Part B. As long as you maintain your premiums and meet any other expenses that your policy provides, after Medicare benefits have been applied to your healthcare, your Medigap plan will kick in and cover the remaining expenses that the specific policy provides.
Medicare Supplemental Insurance Benefits
Medicare Supplement plans can help to pay for a portion of or all of the out-of-pocket expenses that aren’t covered by Original Medicare. All Medigap policies offer all or some of the following benefits; however, there are some exceptions:
- Part A deductible, which was $1,600 per benefit period in 2023.
- Part A coinsurance for inpatient hospital care after being admitted for 60 days, which started at $400 per day in 2023 and increases after 90 days.
- Part A coinsurance for care and services provided in skilled nursing facilities after 20 days of being admitted. In 2023, the cost amounted to as much as $200 daily, and beneficiaries must pay all associated costs after they are admitted for 100 days.
- Part A coinsurance and copays for care and services provided in hospice settings. The amount is up to 5 percent of the amount that Medicare has approved for respite care, and an additional $5 for each individual drug beneficiary is prescribed.
- Part B deductible, which amounted to $226 in 2023. It’s important to note, however, that as of January 1, 2020, new Medicare enrollees can no longer purchase Medigap plans that pay for the Part B deductible, such as Plan F; however, beneficiaries who had this coverage before the start of 2020 can keep it and it will be honored. Likewise, those who were eligible for Medicare by this date but had yet to enroll might still be able to purchase plans that cover the Part B deductible.
- Part B coinsurance after the Medicare Part B deductible has been applied, which amounts to up to 20 percent of the amount that Medicare has approved for most medical services and equipment.
- Part B excess charges. If a healthcare provider is allowed to charge more than the amount that Medicare has approved for a specific service you receive and charges that additional amount, many Medigap policies will cover the excess charge.
- First 3 pints of blood required for medical procedures.
In addition to these expenses, some Medicare Supplemental Insurance Plans also cover the cost of the following:
- Skilled nursing facility care
- Emergency medical care while traveling overseas, as long as the care is provided within the first 60 days of travel. Policies that offer this coverage will only cover up to 80 percent of the related expenses.
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What Medicare Supplemental Insurance Plans Don’t Cover
Typically, Medigap policies don’t provide coverage for the following:
- Dental care
- Hearing aids
- Vision care
- Prescription glasses
- Long-term care
- Private-duty nursing care
How to Decide Which Medigap Plan Will Best Meet Your Needs
There are a lot of factors that you’ll want to take into consideration when you’re trying to decide which Medicare Supplemental Insurance plan will best meet your needs. The following are some key factors that you should keep in mind:
- Your health
- The type of benefits that the policy provides
- The insurance company (some insurance companies provide better customer service than others, and some offer additional perks)
- The cost of the policy
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Frequently Asked Questions
What is Medicare Supplemental Insurance?
Medicare Supplemental Insurance, also known as Medigap, is private health insurance designed to fill the gaps in Original Medicare coverage. It helps pay for out-of-pocket costs such as copayments, coinsurance, and deductibles, providing beneficiaries with more predictable healthcare expenses.
Who is eligible for Medicare Supplemental Insurance?
Individuals who are enrolled in Medicare Part A and Part B are eligible to purchase Medicare Supplement plans. It is essential to enroll during the Medigap Open Enrollment Period, which starts the month you turn 65 and are enrolled in Part B to get guaranteed issue rights.
When can someone enroll in Medicare Supplemental Insurance?
The best time to enroll in Medicare Supplement Insurance is during the Medigap Open Enrollment Period. It lasts for six months and begins when you are age 65 or older and enrolled in Medicare Part B. During this time, insurers cannot deny coverage or charge higher premiums based on pre-existing conditions.
What are the best Medicare Supplement plans for 2024?
The best Medicare Supplement plans for 2024 may vary depending on individual needs and location. However, Plan G and Plan N are popular choices due to their comprehensive coverage and affordability. Plan G covers almost all Medicare-approved costs, except the Part B deductible, while Plan N has copayments for some services but offers lower premiums.
What is the difference between Medicare Supplement plans and Medicare Advantage?
Medicare Supplement plans work alongside Original Medicare, providing additional coverage for out-of-pocket expenses. In contrast, Medicare Advantage plans are private health plans that replace Original Medicare and often include prescription drug coverage and extra benefits like dental and vision.
Can I have both Medicare Supplement plans and Medicare Advantage?
No, you cannot have both Medicare Supplement and Medicare Advantage plans simultaneously. You must choose one or the other to coordinate with your Original Medicare coverage.
Do Medicare Supplement plans cover prescription drugs?
No, Medicare Supplement plans do not cover prescription drugs. Beneficiaries needing prescription drug coverage must enroll in a separate Medicare Part D plan.
How do I decide if Medicare Supplement or Medicare Advantage is right for me?
To decide between the two, consider factors such as your healthcare needs, budget, preferred doctors/hospitals, and the plan’s benefits. If you prefer more flexibility in choosing healthcare providers and travel often, Medigap might be a better fit. If you want comprehensive benefits and are comfortable with network restrictions, Medicare Advantage could be a good option.
Can I switch Medicare Supplement plans at any time?
While you can switch Medicare Supplement plans at any time, it’s essential to consider that you may be subject to medical underwriting if not within the Medigap Open Enrollment Period or a Special Enrollment Period.
Can I be denied Medicare Supplement coverage due to pre-existing conditions?
If you apply for Medicare Supplement plans outside the Open Enrollment Period or a Special Enrollment Period, insurers may use medical underwriting and deny coverage or charge higher premiums based on pre-existing conditions.
Ready to Purchase Medicare Supplemental Insurance?
If you’re ready to invest in Medigap insurance, comparing quotes from different for different policies from different providers is an important step in the process. To receive quick and accurate estimates from the top insurers in your area, complete and submit the form to the right of your screen. You can also call 1-888-891-00229 and we’ll be happy to answer any questions you may have.
Russell Noga is the CEO and Medicare editor of Medisupps.com. His 15 years of experience in the Medicare insurance market includes being a licensed Medicare insurance broker in all 50 states. He is frequently featured as a featured as a keynote Medicare event speaker, has authored hundreds of Medicare content pages, and hosts the very popular Medisupps.com Medicare Youtube channel. His expertise includes Medicare, Medigap insurance, Medicare Advantage plans, and Medicare Part D.