What is Medigap, and Why Do I Need Supplemental Insurance?

There’s nothing more personal than your health or finances; balancing both can be tricky. Original Medicare costs can add up quickly. By purchasing a Medigap policy, you are able to offset some of those costs. Continue reading to learn how Medigap works alongside Original Medicare.

Original Medicare (Part A and Part B) requires beneficiaries to still pay copays, deductibles, and co-insurance. Medicare Supplement Insurance, or Medigap policies, help you cover some of the costs Original Medicare doesn’t. Frequent hospital or doctor visits can be expensive without the right coverage.

A Medicare Supplement insurance plan offers:

• Different coverage levels with standard benefits for each plan. 
• A range of services and plans, each assigned a letter from “A” to “N.” It’s important to note plans “E”, “H”, “I” and “J” are no longer sold.
• Basic Medigap coverage is the same across most states and insurance companies.
• Each Medigap plan follows federal and state laws to protect you and your policy.

The terms “standard benefits” and “basic coverage” mean that Medigap plan “A” in one state is the same as Plan “A” in a different state. However, there are exceptions to this rule with a few states. We discuss these states below.

Medicare Supplement plans cover some costs not covered by Original Medicare. For example, a 20% co-insurance bill for a doctor visit could be covered with a Medigap plan. All Medicare Supplemental insurance plans must cover standard services. Additional benefits are available with specific plans. ^[1]

All Medicare Supplemental insurance plans must cover:

• Medicare Part A co-insuranceCoinsurance is the percentage of your medical costs that you pay after you meet your deductible. Your insurance company pays the remaining amount. For example: If you have a $1,000 medical bill and your coinsurance is 20%, you'll pay $200. Your insurance company will cover the final $800. costs up to an additional 365 days after Medicare benefits run out; co-insurance or copaymentsA copayment is the fixed amount you pay directly to your provider for medical services or prescription drugs covered in your plan. For example: If your plan includes a copayment of $20 for office visits, you'll pay $20 to your doctor whenever you have an appointment. for hospice care
• Medicare Part B co-insurance or copayments
• Up to three pints of blood

Other services covered depending on the plan:

• Skilled nursing facility careSkilled nursing facilities provide in-patient extended care with trained medical professionals to recover from injury or illness and activities of daily living. These facilities provide physical and occupational therapists, speech pathologists and medical professionals assist with medications, tube feedings and wound care. Skilled nursing stays are usually covered under Medicare Part A. co-insurance 
• Part A deductible
• Part B deductible (no longer covered for new Medicare beneficiaries)
• Part B excess charges
• Foreign travel emergency care

Medicare Supplement plans generally don’t cover:

• Prescription drugs
• Vision
• Dental
• Long-term care
• Hearing aids

Do you have more questions about Medicare Supplement coverage? Learn more.

With ten different plan options, it can be challenging to understand what each plan offers and whether it’s right for you.

We’ve created a chart for a side-by-side comparison of each plan. Any percentage less than 100% requires you to pay the remaining cost.

Necessary coverage Medigap policies are not the same if you live in Massachusetts, Minnesota or Wisconsin.

There are a few important changes and variations of the plan that you should know before choosing.

• Medicare Supplement Plan F and Plan G also offer a plan with a high deductible in some states. You must pay $2,340 in shared costs before regular Medicare 80/20 policy begins.
• As of January 1, 2020, new Medicare enrollees are not eligible for Plan C or Plan F. If you were eligible for Medicare before January 1, 2020, but did not enroll, you may still be eligible.
• Medigap Plans K and L pay 100% of covered services after you reach the annual out-of-pocket limit and pay the yearly Part B deductible. Your annual out-of-pocket limit and Part B deductible reset each calendar year. In 2020, the average Part B deductible is $198.
• Medicare Supplement Plan N pays 100% of the Part B co-insurance with certain exceptions. For example, an office visit copay of $20 or $50 copay for emergency room visits that don’t include inpatient admission.

Learn more about Medigap plan costs and how to enroll.

Is Medigap the right decision for you? Selecting a health insurance plan can be challenging. It’s important to compare each plan for your lifestyle because every Medicare Supplement plan is different.

Another option to consider is Medicare Advantage Plans (Part C). Those policies help with your Medicare costs and can add more benefits.