Medicare is the federal health insurance program for people age 65 or older, people under age 65 with certain disabilities, and people of any age with End Stage Renal Disease (ESRD). However, it may sometimes leave beneficiaries responsible for out-of-pocket expenses such as deductibles, copayments, and coinsurance.
To help manage these costs, Medicare Supplement plans, also known as Medigap plans, are available. These plans are designed to help fill coverage gaps and help ensure that healthcare expenses remain predictable and manageable.
What is a Medicare Supplement plan?
Medicare Supplement Plans, or Medigap, are private insurance policies that help cover your portion of the out-of-pocket costs left after Original Medicare (Part A and Part B) has paid.
Unlike Medicare Advantage plans, which provide an alternative way to receive Medicare benefits, Medigap policies work alongside Original Medicare to help cover expenses such as deductibles, copayments, and coinsurance.
What do Medicare Supplement plans cover?
Medigap plans offer a variety of coverage options that differ based on the plan selected. Many Medigap policies help cover:
- Medicare Part A coinsurance and hospital costs after Medicare benefits are used (up to an additional 365 days)
- Medicare Part B coinsurance or copayments, which may include doctor’s visits and outpatient services
- First three pints of blood needed for a medical procedure
- Hospice care coinsurance or copayments under Part A
What isn’t covered under Medigap Insurance plans?
While Medigap policies can help cover many costs that Original Medicare d oes not, there are still some gaps:
- Routine vision and dental care , hearing aids, and long-term care services are not generally covered.
- Prescription drugs are also not included, making it essential to consider enrolling in a separate Medicare Part D plan to get medication coverage and avoid a late enrollment premium penalty.
Types of Medigap Plans
There are multiple types of Medigap plans with policies offering different levels of coverage. These differences allow beneficiaries to choose a Medigap plan that aligns with their budget and healthcare needs, ranging from basic coverage (Plan A or Plan B) to more comprehensive protection (Plan G or N).
Plan A | Provides the most basic coverage, including Part A coinsurance, hospital costs, and Part B coinsurance. Note: Plan A does not cover deductibles or additional benefits like skilled nursing care. |
Plan B | Like Plan A but also covers the Medicare Part A deductible. |
Plan C | Plan C is a Medigap policy that provides more comprehensive coverage, including costs like Part A and B deductibles, coinsurance, and skilled nursing care. Note: Plan C does not cover Part B excess charges and is only available to those who were eligible for Medicare before January 1, 2020, but not yet enrolled. |
Plan F & Plan G | These are the most comprehensive plans, covering almost all out-of-pocket costs, including the Part A hospital deductible, Part A and B coinsurance, Part B excess charges and foreign travel emergency care. Note: Plan F is only available to those who were eligible for Medicare before January 1, 2020, but not yet enrolled. |
Plan D | Offers coverage for many out-of-pocket costs, like coinsurance and the Part A deductible, but not the Part B deductible or excess charges. |
Plan K & Plan L | Offer lower premiums with higher out-of-pocket costs. They cover a percentage of certain benefits (e.g., Plan K covers 50% and Plan L covers 75% of the 20% not covered by Part B) rather than full coverage. |
Plan M | Covers half of the Part A deductible and offers partial coverage for some other benefits but does not cover the Part B deductible. |
Plan N | Provides coverage like Plan G but requires copayments for doctor visits and emergency room visits. It does not cover the Part B deductible or excess charges. |
How much do Medigap plans cost?
Monthly premiums for Medigap plans vary based on several factors, including age, location, and the insurance provider .
It is important to understand the monthly premium payments with potential out-of-pocket expenses when receiving medical care.
How do you choose a Medigap plan?
- Determine the level of coverage you require and how much you are willing to pay for monthly premiums.
- Review your healthcare usage and financial situation to decide whether lower premiums with higher out-of-pocket costs or higher premiums with lower costs are a better fit.
- Consult a licensed insurance agent who is -certified to help you explore your options and make a more informed decision based on your specific situation.
How to Enroll in a Medigap Plan
Enrolling in a Medigap plan can be a straightforward process, but timing and eligibility requirements are key factors to consider.
Is Medicare Supplemental Insurance right for you?
- Individuals with chronic health conditions or who have frequent doctor visits and prefer more predictable medical costs
- Retirees who prefer to budget for healthcare expenses with fixed costs each month
- High-income earners who may be subject to Medicare surcharges and want to minimize out-of-pocket expenses
Medicare Supplement Insurance can be an excellent choice for those who want to avoid high out-of-pocket expenses in retirement. It helps cover costs that Original Medicare doesn’t, making it an ideal option for those with frequent healthcare needs or who wish to have stable and predictable medical expenses.
Whether you’re looking for comprehensive coverage or a more budget-friendly option, it’s crucial to assess your situation carefully.
Don’t Leave Your Medicare Coverage to Chance.
The Medigap policy professionals with American Fidelity Retirement Services can help you explore and compare Medicare Supplement plans and find the right match for your health and finances. Reach out now and take the first step toward additional coverage.
This blog is up to date as of February 2025 and has not been updated for changes in the law, administration or current events.
This information is general in nature and should not be considered financial, legal or tax advice. Consult an attorney or a tax professional regarding your specific situation.
