Medigap Plan

Medicare Supplement (Medigap) Plans

Today in the United States there are over 60 million people who get Medicare benefits. 40 million are enrolled in Original Medicare Part A and Part B, and 13.5 of these beneficiaries have a Medicare Supplement policy. 

Medicare Supplement plans, also known as Medigap plans, are appropriately named because they supplement, or fill in the gaps, left by traditional Medicare benefits. Medicare Supplement insurance helps pay for copayments, coinsurance, deductibles, and other expenses that Medicare Parts A and B don’t cover. 

Features of Medigap policies

There are 10 Medigap policies on the market, which are sold by Medicare-approved private insurance companies. These plans are:

• Standardized and consistent from year to year
• Governed by federal and state law
• Sold as “Medicare Supplement Insurance”
• Identified in all but three states as Plan A, B, C, D, F, G, K, L, M and N
• Standardized differently in Massachusetts, Wisconsin and Maine
• Sold for a monthly premium, which is in addition to the premium you pay for Original Medicare coverage

Once you get familiar with the benefits and limitations of each Medicare Supplement plan, you can select the one that best meets your health care needs and fits your budget.

Basic benefits

Following are the basic benefits that every Medicare Supplement plan must cover. Not all policies include 100% coverage, but they have to include at least a portion of these benefits:

• Part A (hospital insurance) coinsurance and inpatient costs for up to 365 days beyond Medicare coverage
• Part A coinsurance or copayment for hospice care
• Part B coinsurance or copayment
• Blood – first three pints that your health care provider needs to purchase for you

Plan A is limited to these basic benefits. Across other Medigap policies, you will find additional benefits reflected in higher premiums. Today there are ten Medigap plan types – A, B, C, D, F, G, K, L, M, and N that are available to from private insurance companies. The plans are standardized according to their letter, meaning they must provide the same benefits no matter who sells them. Plans F and C are no longer available for those new to Medicare as of January 1, 2020. But, if you have Original Medicare Parts A and B, you can purchase any of the other plans sold in your state as long as you have guaranteed issue rights.

When can I buy a Medigap plan? Understanding guaranteed issue rights 

When you turn 65 and are enrolled in Part B, you will have a 6-month Medigap enrollment period during which you have a guaranteed issue right to buy any plan sold in your state. During this time, you will not be subject to medical underwriting – so, pre-existing conditions you may have will not be a factor in your purchase. After this 6 month period is over, you can be turned down for coverage or charged more due to pre-existing conditions. 

Do you need a Medicare Supplement policy?

Having a Medicare Supplement plan is not mandatory for Medicare beneficiaries, but they help reduce out-of-pocket costs associated with Original Medicare Parts A and B. Medigap plans are  purchased from private insurance providers, so costs and benefits can vary. To get the most complete coverage from your Original Medicare benefits plus Medicare Supplement insurance, you should choose a plan that best fits your medical needs and your budget.

The Medigap plan that provides the most comprehensive coverage is Plan F. Unfortunately, Plan F is not available to those who are newly eligible for Medicare as of January 1, 2020. If you were eligible before this date but didn’t enroll in Medicare then, you may still be eligible to purchase Plan F. 

For new Medicare enrollees, Medigap Plan G has now taken over as the plan with the most comprehensive coverage. Medicare Supplement Plan G covers:

• 100 percent of the cost of Part A inpatient hospital coinsurance for 365 days after Original Medicare benefits are depleted
• 100 percent of Part B coinsurance or copayments
• The first three pints of blood you need after a procedure.
• 100 percent of Part A hospice coinsurance or copayments
• 100 percent of coinsurance at a skilled nursing facility for 80 days
• 100 percent of your Part A deductible
• 100 percent of your Part B excess charges
• 80 percent of the cost of foreign travel emergency care up to plan limits

The other Medigap plans available to new enrollees offer progressively less coverage but cost less per month. 

Before choosing a Medicare Supplement policy, you should also consider the expense and determine whether the coverage you get is worth the cost. What you pay for a Medigap Plan G depends mainly on where you live. Medicare Supplement plans are typically more expensive in states and cities where the cost of living is more expensive. But on average, the monthly premium is between $100.00 and $200.00. 

You must also factor in your other Medicare expenses. You must continue paying your Part A premium if you don’t qualify for premium-free Part A, your Part B premium and deductible, and Part D premium and copays if you have a prescription drug plan. 

If you are thinking about purchasing a Medicare Supplement policy, you should compare all the plans to see what coverage is best for your health care needs before you make your final decision. If you are a Medicare beneficiary looking for insurance that complements Original Medicare, a Medicare Supplement plan may be your solution.

Choosing a Medicare Supplement plan

Here are some things to think about as you consider which plan is the best fit for you:

• If you travel often, you may want to select a Medicare Supplement plan that covers medical emergency services you may need when you travel outside the U.S.: C, D, F, G, M and N.
• If the premium amount is a concern, you can save money with a high-deductible plan. High-deductible Medicare Supplement Plans F and G are available in some states.
• Beneficiaries with an eligibility effective date on or after January 1, 2020, will not have access to Plans C or F. You may be able to buy Plans C or F if you were Medicare-eligible prior to January 1, 2020, but not yet enrolled.
• Doctors who accept assignment agree to accept direct payments from Medicare and charge you only for deductibles and coinsurance. Some doctors charge an amount in excess of what Medicare pays for Part B services. This practice is prohibited in only a handful of states. Plans F and G cover Part B excess charges.
• If you have a Medicare Advantage or Part C plan, you don’t need a Medicare Supplement policy. In fact, insurance companies are not allowed to sell you a Medigap plan if you have Part C coverage unless you are switching from Medicare Advantage to Original Medicare. If this is the case, your Medigap coverage begins the day after your Part C plan expires.