Medicare Supplement (Medigap)

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Medicare Supplement Insurance (Medigap)

A Medicare Supplement Insurance (Medigap) policy, sold by private companies, can help pay some of the health care costs that Original Medicare doesn't cover, like copayments, coinsurance, and deductibles. Some Medigap policies also offer coverage for services that Original Medicare doesn't cover, like medical care when you travel outside the U.S. If you have Original Medicare and you buy a Medigap policy, Medicare will pay its share of the Medicare-approved amount for covered health care costs. Then your Medigap policy pays its share.

Medigap policies supplement your Original Medicare benefits, which is why these policies are also called Medicare Supplement plans. If you have Original Medicare and a Medigap policy, Medicare will pay first, as your primary insurance, and your Medigap policy will fill in the cost gaps. For example, suppose you have a $5,000 ambulance bill and have not yet met the yearly Medicare Part B deductible. Medicare Part B will pay 80% of your ambulance bill, minus the deductible amount. The Medigap policy would then pay your remaining 20% coinsurance of your $5,000 ambulance bill. Some Medigap policies also pay the remainder of the Medicare Part B deductible you still owe.

What benefits do Medigap policies cover?

Currently, there are 10 standardized Medigap plans, each represented by a letter (A, B, C, D, F, G, K, L, M, N; there’s also a high-deductible Plan F). These are sold in most states (Massachusetts, Minnesota, and Wisconsin each have their own different set of Medicare supplement plans). Coverage levels and premiums vary, but the benefits of each plan within a lettered category remain the same despite the insurance company or location. For example, Plan A benefits are the same in New Jersey as they are in Oregon.

The chart below shows basic information about the different benefits Medigap policies cover.

Yes = the plan covers 100% of this benefit No = the policy doesn't cover that benefit % = the plan covers that percentage of this benefit N/A = not applicable

Medigap BenefitsMedigap Plans
ABCDF*GKLMN
Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used upYesYesYesYesYesYesYesYesYesYes
Part B coinsurance or co-paymentYesYesYesYesYesYes50%75%YesYes***
Blood (first 3 pints)YesYesYesYesYesYes50%75%YesYes
Part A hospice care coinsurance or co-paymentYesYesYesYesYesYes50%75%YesYes
Skilled nursing facility care coinsuranceNoNoYesYesYesYes50%75%YesYes
Part A deductibleNoYesYesYesYesYes50%75%50%Yes
Part B deductibleNoNoYesNoYesNoNoNoNoNo
Part B excess chargeNoNoNoNoYesYesNoNoNoNo
Foreign travel exchange (up to plan limits)NoNo80%80%80%80%NoNo80%80%
Out-of-pocket limit**N/AN/AN/AN/AN/AN/A$4,960 $2,480N/AN/A

In general, Medigap policies cover the following benefits

  • Medicare Part A coinsurance and hospital costs (up to an additional 365 days after Medicare benefits are used)
  • Medicare Part B coinsurance or copayment*
  • Blood (first 3 pints)*
  • Part A hospice care coinsurance or copayment*

(***Coverage may be partial for some plans.)

Some types of Medigap policies also cover:

  • Skilled nursing facility care coinsurance
  • Medicare Part A deductible
  • Medicare Part B deductible
  • Medicare Part B excess charges
  • Foreign travel emergency

Medigap Costs

Like almost all insurance plans, Medicare Supplement policies do require premium payments. Because Medigap plans are offered through private insurance companies, the costs associated with each plan may differ. For example, a Medigap Plan M you buy in Boston may not cost the same as a Medigap Plan M you buy in Laredo, but the coverage would be the same. Each private insurance company offering Medicare Supplement plans can set its own plan premiums using one of these rating systems:

  • Community-rated: Each beneficiary is charged the same monthly premium, regardless of age. These premiums will not increase as you age, but may increase over timeas the result of inflation.
  • Issue-age-rated: The premium cost of these plans is based on your age when you first buy the Medigap policy. In general, premiums are lower for younger buyers. These premiums will not increase as you get older, but may increase as a result of inflation.
  • Attained-age-rated: Premiums are set based on your current age and increase as you get older. Premiums are lower for younger buyers but increase over time.

Some factors that might affect the costs of a Medigap plan:

  • Some insurance companies may offer discounts to women, people who are married, and non-smokers.
  • Insurance companies might give discounts to those who pay yearly, or who pay their premiums using electronic funds transfer.
  • You may be able to purchase a high-deductible option for Medigap Plan F, which might offer a lower premium, but requires you to pay a substantial deductible before the plan begins its coverage.
  • If you enroll in a Medicare SELECT plan (a type of Medigap policy that may limit you to using doctors in the plan's network), you might have a lower premium.

***Besides your Medigap plan premium, you still need to pay your Original Medicare premium(s) as well; Medigap doesn't cover your Medicare Part A or Part B premium. If you worked at least 10 years while paying Medicare taxes, Part A is premium-free. But most beneficiaries pay a monthly Part B premium.

Eligibility

To be eligible to enroll in a Medicare Supplement plan, you must be enrolled in both Medicare Part A and Part B. Some states may offer Medigap plan options to beneficiaries under 65 who qualify for Medicare because of disability or certain conditions (such as end-stage renal disease). Federal law doesn't require states to sell Medicare Supplement insurance to beneficiaries under 65. However, depending on where you live, some states may offer Medigap coverage to beneficiaries under 65; eligibility and the specific available options may vary by state. If you're a Medicare beneficiary under 65 and interested in purchasing Medicare Supplement insurance, contact your state insurance department to learn if you're eligible for Medigap coverage in your state.