Medicare is a well-established US-based health insurance program that aims to lower healthcare bills by providing coverage plans to senior adults in various States. The federal government manages Medicare, and the Federal Insurance Contributions Act funds it.
Medicare plans are designed to meet the ever-growing healthcare needs of senior adults aged 65 and above, those with certain disabilities, and people with end-stage renal disease (ESRD).
As of 2024, 18.5% of the US population is on Medicare. This extensive health insurance program consists of Original Medicare, Medicare Advantage, and Medicare Supplement plans.
Original Medicare is the standard Medicare plan comprising two parts: Part A and B. Medicare Part A is hospital insurance that provides coverage for inpatient care, such as hospital stays, skilled nursing facilities, hospice, and home health care.
In contrast, Part B provides medical coverage for outpatient care, including doctor’s visits, emergency care, labs, medical equipment, and medical supplies.
Medicare Advantage plans are an alternative to Original Medicare and work as an all-in-one healthcare coverage option. These plans include Medicare Part A and B coverage with additional benefits such as vision, hearing, and dental care coverage.
Besides these plans, Medicare also has a Supplement Plan called Medigap. Medigap is an optional plan that covers what’s not covered under Medicare Parts A and B. These plans provide additional health insurance for your out-of-pocket expenses. Let us look into Medigap Supplement plans and what they offer to beneficiaries.
What is a Medicare Supplement Plan (Medigap)?
Medicare Supplement Plan, also known as Medigap, is a secondary coverage plan offered by private companies. Its primary purpose is to provide additional health insurance for out-of-pocket costs that aren’t covered by Parts A and B.
This means that Medigap only covers what isn’t covered by Original Medicare. For example, if you choose the Medicare Advantage plan, it works as an alternative to Original Medicare with additional coverage.
But if you enroll in Medigap, you’ll only have insurance for what’s not covered by Original Medicare. Thus, it’s vital to have an Original Medicare plan with supplemental Medicare, as it is not a stand-alone insurance policy.
Private health insurance companies offer Medicare beneficiaries Medigap. According to the rules and regulations set by the Centers for Medicare and Medicaid Services (CMS), every plan must provide beneficiaries with the same coverage.
However, the premium set for Medigap varies from State to State and provider to provider.
Comparative Analysis of Medicare Supplement Plans
| KEY ✔= Plan covers 100% of the benefit🗙= Plan doesn’t cover the benefit %= Plan covers a certain percentage of the benefit, and beneficiaries cover the rest. |
| Benefits | A | B | C | D | F* | G* | K | L | M | N |
| Part A coinsurance and hospital costs up to 365 days after all Medicare benefits are used | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ |
| Part B coinsurance | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | 50% | 75% | ✔ | ✔ |
| Blood benefit | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | 50% | 75% | ✔ | ✔ |
| Part A hospice | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | 50% | 75% | ✔ | ✔ |
| Skilled nursing facility | 🗙 | 🗙 | ✔ | ✔ | ✔ | ✔ | 50% | 75% | ✔ | ✔ |
| Part A deductible | 🗙 | ✔ | ✔ | ✔ | ✔ | ✔ | 50% | 75% | 50% | ✔ |
| Part B deductible | 🗙 | 🗙 | ✔ | 🗙 | ✔ | 🗙 | 🗙 | 🗙 | 🗙 | 🗙 |
| Part B excess charges | 🗙 | 🗙 | 🗙 | 🗙 | ✔ | ✔ | 🗙 | 🗙 | 🗙 | 🗙 |
| Foreign travel emergency | 🗙 | 🗙 | 80% | 80% | 80% | 80% | 🗙 | 🗙 | 80% | 80% |
Plan F and G
Medigap Plans F and G are high-deductible plans. For this plan, beneficiaries must pay coinsurance, copayment, and deductibles before Medicare can pay for their separate deductible for foreign travel/emergency care.
Plan K and L
You must pay your out-of-pocket yearly limit and the yearly Part B deductible, after which Medigap pays for 100% of the covered services for the remaining calendar year.
Plan N
Plan N covers all Part B medical services, but you’ll have to pay up to $20 for some doctor’s visits and up to $50 if you go to the emergency room and aren’t admitted to the hospital.
How Is Medicare Supplement Different From a Medicare Advantage Plan?
Medicare Supplement plans significantly differ from Medicare Advantage plans. Medicare Advantage plans and Medigap are both offered by private health insurance companies.
However, a Medicare Advantage plan provides additional coverage in addition to the benefits that Original Medicare offers. In contrast, a Medigap policy only pays for the costs that the Original Medicare does not cover.
Private insurance companies cannot sell Medigap policies if you already have a Medicare Advantage plan. However, if you enroll in a Medicare Advantage plan for the first time, you can switch to Medigap as you have special rights under federal law.
The federal law allows new enrollees to switch from a Medicare Advantage plan to Original Medicare within 12 months of joining an Advantage plan. This allows new beneficiaries to enroll themselves into an Original Medicare plan with Medigap.
What Does Medicare Supplement Cover?
Medicare Supplement plans cover some of the costs that Original Medicare (Part A and Part B) doesn’t pay for. These plans generally offer the following.
- Coinsurance and Copayments: Medigap helps cover the cost of medical services or hospital stays after you’ve paid your Medicare deductible.
- Deductibles: Some Medigap plans cover Medicare Part A and Part B deductibles, which are the amounts you have to pay out-of-pocket before Medicare begins to pay.
- Excess Charges: Certain Medigap plans, such as plans F and G, cover excess charges, which are additional costs you might incur if a healthcare provider charges more than the Medicare-approved amount for a service.
- Foreign Travel Emergencies: Some Medigap plans offer coverage for emergency medical care when traveling outside the United States.
- Skilled Nursing Facility Care: Medigap helps cover costs associated with stays in skilled nursing facilities. This coverage is not available with Medigap plans A, B, K, and L.
- Blood: Medigap plans pay for the first three pints.
What’s Not Covered by Medicare Supplement Plans?
Medicare Supplement plans don’t cover the following services.
- Prescription Drugs: Most Medigap plans do not include coverage for medications. You would need a separate Medicare Part D for prescription drug coverage.
- Routine Vision and Dental Care: Medigap does not cover routine eye exams, eyeglasses, or dental care.
- Hearing Aids: Costs associated with hearing aids and routine hearing exams are not covered.
- Long-Term Care: Medigap does not cover custodial care or other long-term care services like nursing home stays that aren’t medically necessary.
- Private-Duty Nursing: The costs of private-duty nurses are not covered.
- Overseas Medical Care: Although some Medigap plans offer limited coverage for foreign travel emergencies, most of these plans don’t provide coverage for routine medical care outside the US.
- Cosmetic Surgery: Medigap does not cover elective cosmetic surgeries or procedures.
- Acupuncture and Alternative Therapies: Most Medigap plans do not cover treatments like acupuncture, chiropractic care, or other alternative therapies.
Which Medigap Policies Are Available?
All existing Medigap policies follow the federal laws designed to protect beneficiaries. Private insurance companies sell the standardized Medigap policies, identified by a letter in most States.
Most plans available in the US are plans A, B,C, D, F, G, and plans K, L, M, N. All standardized plans offer the same benefits to beneficiaries across the US.
Plans E, H, I, and J are no longer available. But if you’re already enrolled in one of these plans, you’ll have access to it by the end of the Medicare year.
In some States, you can also buy a different Medigap policy known as Medicare SELECT. This policy requires you to use hospitals and healthcare physicians within a specific network. You cannot seek treatment from a consultant outside your network of choice.
If you are enrolled in a Medicare SELECT policy, you can switch to a standard Medigap policy within 12 months of your enrollment, according to federal law.
What Do Medigap Policies Cover?
Since federal law regulates Medigap policies across the United States, all health insurance companies must abide by the rules and regulations.
According to the rules, all insurance companies selling a Medigap policy must offer beneficiaries with Medigap Plan A. If a company wants to offer more plans, it must also provide Plan C or Plan F to eligible people.
The only people eligible for these plans are those who got access to Medicare before January 1, 2020.
People who are new to Medicare can buy Medigap Plan D or G instead of Plans C and F. Moreover, Medigap sold to new beneficiaries after 2020 does not cover the Part B deductible. Therefore, Plans C and F are no longer available for people who sign up for Medicare after 2020.
Types of Insurance That Aren’t Medigap Policies
As Medicare offers numerous plans, beneficiaries must understand the different types of available plans. Some of these plans aren’t Medigap policies. Here is a list of the plans that aren’t a part of Medigap.
- Medicare Advantage Plans (also known as Part C)
- Medicare Prescription Drug Coverage Plans (Part D)
- Medicaid
- Employer group health plans (including Federal Employees Health Benefits (FEHB) Program or union plans)
- Tricare
Cost of Medicare Supplement Plans
The cost of the Medicare Supplement Plan varies from State to State. The primary factors determining the cost of your plan are your location, age, provider, and the benefits it covers.
Some policies that may be more affordable for people aged 65 may become costly at age 85. Therefore, you must consult your insurance company about the premiums. Generally, Medigap prices are determined in three ways.
- Community-rated: Everyone who has the Medigap policy pays the same monthly premium, no matter their age.
- Issue age-rated: With this type of Medigap policy, the premium is based on your age when you first purchase the policy. The younger you are at the time of purchase, the lower your premium will be. The benefit of this rating system is that your premium won’t increase as you age. However, your premium may still go up due to factors such as inflation, healthcare cost increases, or changes in the insurance provider’s pricing.
- Attained age-rated: The premium is based on your current age and increases as you get older. Therefore, plans that cost less at 65 may cost more at 85. While this type of policy may initially offer the lowest premium, it has the potential to become the most expensive over time. The premium can also increase due to inflation and other factors.
Besides this, the premiums may vary from provider to provider as these plans are offered by private health insurance companies that significantly differ. However, the average monthly premium cost of a Medicare Supplement Plan can range from $50 to over $300.
Cost-Sharing Methods for Medigap Policies
If you’re concerned about the increasing out-of-pocket costs associated with healthcare bills, you should look into Medicare Supplement plans.
Medicare provides cost-sharing methods such as deductibles, copayments, and coinsurance. Let us understand these cost-sharing methods before you purchase a Medigap plan.
- Deductibles are expenses that you cover before Medicare provides coverage for health services. Thus, deductibles apply to all Medicare plans, including the standard Original Medicare.
- A copayment is a fixed payment for a doctor’s visit or a prescription drug. This amount is paid after you pay your deductibles, thus covering certain supplemental benefits.
- Coinsurance is a cost-sharing method in which you pay a percentage of the total amount for specific services after paying your deductibles. Your insurance plan covers the rest of the cost.
There is a 20% coinsurance for all Medicare-approved services.
Eligibility Criteria for Medicare Supplement Plans
The eligibility criteria for Medicare Supplement plans is the same across all the States. People aged 65 and above are eligible for Medigap policies if they are enrolled in Original Medicare.
People without Original Medicare cannot access a Supplement Plan as it is not a stand-alone policy.
People under the age of 65 require approval from the Social Security Administration for their disability to be eligible for Medicare Supplement plans.
When Is the Best Time to Buy a Medigap Policy?
The best time to purchase a Medigap policy is during the Open Enrollment period. Medicare has two enrollment periods besides open enrollment. These are your initial enrolment period (IEP) and a general enrolment period (GEP).
- Open enrollment period (OEP): You can join, switch plans, or drop your coverage plans from October 15 to December 7 each year. Some states have additional Open enrollment periods, including those for people under 65. Suppose you’re under 65 and have Medicare because of a disability or End‑Stage Renal Disease (ESRD). In that case, you might not be able to buy the Medigap policy you want, or any Medigap policy, until you turn 65.
- Initial enrollment period (IEP): The IEP is 7 months long, starting 3 months before your 65th birthday and ending 3 months after you turn 65. You can enroll during this period if you haven’t had Medicare before.
- General enrolment period (GEP): If you miss your IEP, you can access Medicare by applying for it during the general enrollment period (GEP) between January 1 and March 31 every year. You can choose Original Medicare, Medicare Advantage, Medigap, or Part D. During this period, you can also change your current Medicare plans. For example, if you have Original Medicare and you want to switch to a Medicare Advantage plan, you can do so during this period.
What Do You Need to Know to Buy a Medigap Policy?
Before you sign up for a Medigap policy, you must collect as much information as possible regarding each plan offered in your State.
Here are some important facts that you must know before enrolling in a Medigap policy.
- You must have Original Medicare as it is a prerequisite to buying a Medigap policy. If you don’t have Original Medicare, you must enroll during your initial enrollment period or wait for the open enrollment period.
- If you have a Medicare Advantage plan, you cannot enroll in a Medicare Supplement plan. However, you can return to your Original Medicare plan during the open enrollment period. After you switch your plan, you can get supplemental coverage through a Medigap policy with Original Medicare.
- You must pay a monthly premium to the private health insurance company in addition to the Part B premium you pay to Medicare.
- A Medigap policy only provides coverage for one person. Therefore, spouses must buy separate policies.
- Medigap policies sold after 2005 do not include prescription drug coverage. If you require drug coverage, you will have to join a separate drug coverage plan known as Medicare Part D.
- All Medigap plans are standardized. Therefore, they offer the same benefits. For example, all Plan N offers the same benefits. The only difference is the premium you pay to your insurance provider.
Before signing up for a Medigap policy in your State, you must compare the plans offered by various insurance companies to enroll yourself into a budget-friendly plan.
Step-By-Step Guide for Buying a Medigap Policy
Choosing a Medicare Supplement policy is challenging due to the numerous factors that impact your decision. Before signing up for a Medicare Supplement policy, consider the Open Enrollment Period (OEP).
If your OEP is approaching, you can sign up for a Medicare Supplement policy. Here is a step-by-step guide to help you enroll in a Medicare supplement plan.
Step One: Choose a Plan
Medicare Supplement plans are standardized and are named by letter, Plans A to N. You must compare the benefits each plan offers.
You must also evaluate your current health status and your future needs before choosing the right plan for yourself, as you won’t be able to switch your Medigap policy anytime soon.
Step Two: Pick a Policy
Once you choose a Medigap plan that suits all your needs, you can start looking into the insurance companies in your region that sell that specific policy.
You must compare the same lettered plan offered by all the insurance companies in your State to make a cost-efficient decision. The benefits in each plan are the same, but the premiums significantly differ amongst the same letter plans sold by different companies.
Contact various companies in your region to gather maximum knowledge regarding their premiums, copayments, deductibles, etc.
Also, you must remember that not all plans are offered in every State. Therefore, some plans may not be available in your region. To find out which plans are offered in your State, you can use Medicare’s plan finder tool.
Step Three: Contact the Company
The next step is contacting the health insurance company providing the policy of your choice. You must ask them about the premiums as prices can change.
Once you know which insurance company is providing you with the most budget-friendly plan, you can contact their company for an application procedure. Fill out their application form and answer all the medical questions.
In some cases, you may also have to provide evidence for your Medicare eligibility and open enrollment period.
Next, the insurance company will provide you with a worded summary of your chosen Medigap policy. You must thoroughly read this summary for Medicare queries. This process will confirm your enrollment into your choice of plan.
Resolve Your Medicare Queries With Silveredge!
As numerous Medigap policies are available in the US, you must thoroughly compare them to become familiar with the benefits each policy offers.
Since Original Medicare is required before enrolling into a Medicare Supplement plan, you must also evaluate your health status to determine what a Supplement Plan has to cover for you as it’s not a stand-alone policy.
Also, remember that a private health insurance company offers a Medicare Supplement Plan. Therefore, you must look into the company’s authenticity to avoid fraud.
If you need help comparing Medicare plans in your region, you can seek professional help through Silveredge. Silveredge has licensed advisors who provide complete guidance to help resolve your Medicare-related queries. Contact Silveredge today to choose the right Medigap policy!
