What Is Medicare Supplement Insurance (Medigap)?
Medicare Supplement insurance plans are additional health insurance that complements your Medicare coverage and helps pay for out-of-pocket costs such as coinsurance, deductibles, and copayments. Medicare Supplement insurance protects you from unpredictable health care costs. Your Original Medicare benefits cover a good portion of your health care expenses, but they do not pay everything.
How Medicare Supplement Plans Work
Under the federal Medicare program, you are responsible for paying an annual deductible for Medicare Part A (hospitalization) and Medicare Part B (outpatient services and doctors). After you meet your deductibles, Medicare pays 80% of the Medicare-approved amount for covered health services.
- You are responsible for the remaining 20% coinsurance.
The amount you must pay is frequently called the “gap” in coverage. These gaps can add up quickly. Medicare Supplement insurance, also known as Medigap insurance, fills in these gaps (supplements your Medicare coverage) and reduces the amount you have to pay out-of-pocket.
What Are the Types of Medicare Supplement Plans?
Private insurance companies contract with Medicare to sell Medigap policies. There are 12 Medicare Supplement insurance plans available, Plans A through N. Each one offers a different level of health coverage.
| Medigap Benefits | Plan A | Plan B | Plan C | Plan D | Plan F | HD-F* | Plan G | HD-G* | Plan K | Plan L | Plan M | Plan N |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used up | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Part B coinsurance or copayment | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | 50% | 75% | Yes | Yes |
| Blood (first 3 pints) | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | 50% | 75% | Yes | Yes |
| Part A hospice care coinsurance or copayment | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | 50% | 75% | Yes | Yes |
| Skilled nursing facility care coinsurance | No | No | Yes | Yes | Yes | Yes | Yes | Yes | 50% | 75% | Yes | Yes |
| Part A deductible | No | Yes | Yes | Yes | Yes | Yes | Yes | Yes | 50% | 75% | 50% | Yes |
| Part B deductible | No | No | Yes | No | Yes | Yes | No | No | No | No | No | No |
| Part B excess charge | No | No | No | No | Yes | Yes | Yes | Yes | No | No | No | No |
| Foreign travel exchange (up to plan limits) | No | No | 80% | 80% | 80% | 80% | 80% | 80% | No | No | 80% | 80% |
| Out-of-pocket limit** | N/A | N/A | N/A | N/A | N/A | $2,800 | N/A | $2,490 | $7,060 in 2024 | $3,530 in 2024 | N/A | N/A |
** For Plans K and L, after you meet your out-of-pocket yearly limit and your yearly Part B deductible, the Medigap plan pays 100% of covered services for the rest of the calendar year.
*** Plan N pays 100% of the Part B coinsurance, except for a copayment of up to $20 for some office visits and up to a $50 copayment for emergency room visits that don’t result in inpatient admission.
Medigap plans do not require choosing a primary care physician or getting a referral to see a specialist. Health care providers who accept Medicare also accept Medigap insurance.
Be aware that there is a difference between a provider accepting Medicare and accepting Medicare assignment. If a health care provider accepts an assignment, the doctor or hospital agrees to Medicare’s approved amount for the service. Nationally, about 95% of providers accept assignments.
Providers who choose not to accept Medicare assignment are allowed to charge 15% more than Medicare’s approved amount. This extra 15% is called “Medicare Part B Excess Charges,” and you are responsible for paying it. Several of the Medigap policies cover the Part B excess charges.
Medicare Select
Some states also offer a type of Medigap plan called Medicare SELECT. SELECT plans provide the same coverage as traditional Medigap policies but use a provider network. If you see a provider out-of-network, you typically still receive some benefits, although at a much lower level than if you stay in-network.
A SELECT health plan typically has a lower premium than traditional Medigap policies, but they have limitations. Our insurance agents can tell you whether SELECT plans are available in your state and help you weigh the benefits and costs between traditional Medigap plans and SELECT plans.
What Does Medicare Supplement Insurance Cover?
Medicare Supplement plans are insurance policies that “follow” Medicare. The plans are standardized in 47 states. That means Plan F is the same in California and Ohio. Three states — Massachusetts, Wisconsin, and Minnesota — are standardized differently. Coverage depends on which plan you choose.
All 10 Medicare Supplement policies cover these basic costs:
- Medicare Part B coinsurance
- First 3 pints of blood
- Part A hospice care
Several plans cover additional services:
- Skilled nursing facility care
- Part A deductible
- Part B excess charges
- Foreign travel emergency
Medigap Plan C and Plan F also cover the Medicare Part B deductible. However, these plans are only available to Medicare beneficiaries eligible for Medicare Supplement insurance before Jan. 1, 2020.
What Does Medicare Supplement Insurance Not Cover?
Original Medicare covers medically necessary services. Because Medigap insurance works alongside Original Medicare, it does not offer additional health benefits.
Coverage exclusions include:
- Vision
- Dental
- Hearing aids
- Eyeglasses
- Long-term care in a nursing home
- Private-duty nursing
- Prescription drug coverage (Medicare Part D)
- Cosmetic surgery
To get coverage for a prescription drug, you must buy a standalone Medicare Part D plan.
How Much Do Medigap Plans Cost?
Premiums can range from $34 to $320. Typically, plans offering better coverage cost more than those offering basic benefits. Additionally, Medigap plans requiring a copayment for doctor and emergency room visits have a lower monthly premium in return for the greater cost-sharing.
Medicare Supplement Plans are standardized. That means Cigna’s Plan A is the same as Aetna’s Medigap Plan A. However, a variety of factors determine the cost of your Medigap policy.
Medicare Supplement Plan G sample rates:
| Company | Plan | Lowest Rate | Highest Rate | Gender | State |
|---|---|---|---|---|---|
| Aetna | G | $144.86 | $184.00 | Male | TX |
| Mutual of Omaha | G | $104.07 | $149.25 | Female | OH |
| Aetna | G | $151.94 | $178.00 | Male | PA |
| United Healthcare | G | $147.52 | $241.57 | Female | CA |
| Florida Blue (FL Residents Only) | G | $193.60 | $208.00 | Male | FL |
Here are several factors that affect the cost of Medicare Supplement insurance plans:
- Age
- Gender
- Zip code
- Insurance company
- Benefit level
- Cost-sharing
- Household discounts
Remember that in addition to your Medigap monthly premium, you will pay your monthly Part B premium.
Most Medigap policies require you to pay your Medicare Part B deductible. The exceptions are Plan F, the high deductible Plan F, and Plan C. However, these plans are only available to seniors eligible for Medicare before Jan. 1, 2020.
Applying for a Medicare Supplement Insurance Plan
The ideal time to take out a Medigap policy is when you are first eligible for the Medicare program.
The Medigap Open Enrollment Period is six months after you meet the following conditions:
- You are age 65
- You enroll in Medicare Part B
Open enrollment is the ideal time because you are guaranteed coverage. However, if you enroll outside of the Open Enrollment Period, the insurance company can reject your claim or make you pay a higher premium based on pre-existing health conditions.
A few extenuating circumstances qualify you for a special enrollment period. Our agents can tell you whether you meet one of these situations.
Medicare Supplement insurance plans are guaranteed renewable if you pay your premium on time and stay enrolled in Medicare Part B. They offer a hedge of protection against hefty out-of-pocket expenses and provide Medicare beneficiaries with peace of mind about their health coverage. Call one of our licensed insurance agents today to help determine which health plan fits your health care needs.
Ready to Learn More?
Choosing the right Medicare Plan is not a decision that should be taken lightly. With Policy Guide’s assistance, you will have access to the knowledge and expertise of professional agents who can help you compare different health plans, quotes, and policies to ensure that you make an informed decision. Let us guide you through this process, so that your chosen plan best suits your needs.
Article Resources
- What Is Medicare Supplement Insurance (Medigap)?
- What Are the Types of Medicare Supplement Plans?
- What Does Medicare Supplement Insurance Cover?
- What Does Medicare Supplement Insurance Not Cover?
- Applying for a Medicare Supplement Insurance Plan
