What are Medicare Supplements?

If you’re one of the 10,000 people turning 65 every day, you may be wondering about Medicare and whether Medicare Supplements are worth adding to your health coverage.

What are Medicare Supplements? 

In most states, there are up to 10 standardized insurance plans called Medicare Supplements or Medigap plans that are lettered A through N. The insurance companies selling these plans are required by law to provide standardized coverage — meaning they have to offer the same benefits — so, the only difference between one company’s plan and another of the same letter is price. 

Medigap plans offer additional benefits that original Medicare do not, such as: 

  • Medicare Part A deductible
  • Part B excess charges
  • Part B preventative care
  • Skilled nursing facility care coinsurance
  • Foreign travel emergency care (up to plan limits)
  • First three pints of blood of a transfusion (per calendar year)

Some plans purchased before January 1, 2020 cover Medicare Part B’s deductible, but are being phased out.

Medigap enrollment and eligibility

You become eligible to enroll in a Medigap plan the first day of the month you are both age 65 or older and enrolled in Medicare Part B. Initial open enrollment lasts for six months after you first are enrolled in Part B. 

In most states, this is the best time to apply for a supplement because it is the only time you can receive guaranteed coverage and not be denied for having pre-existing conditions. 

You can apply after this date, but you may be denied coverage or charged a higher premium based on your condition. 

In some states, there are multiple times of open enrollment in which you can receive guaranteed coverage. Be sure to speak to a licensed Medicare agent to get state-specific Medicare information.

Medicare Supplement insurance premium

Even though insurance companies are required to offer the same basic benefits for plans of the same letter, they are allowed to charge different premiums. 

There are multiple ways they can price their premiums such as issue-age (based on the age you first enroll in the policy) and attained-age (based on the age you first bought the policy, but increases as you get older). 

Just know that no matter what method the company uses, premiums can increase over time for reasons other than age.

What do Medicare Supplement plans cover?

These plans don’t actually cover specific health benefits. Medigap covers the costs you’re responsible for with original Medicare. Costs covered can include: 

  • Medicare deductibles
  • Coinsurance
  • Hospital costs after you run out of Medicare-covered days
  • Skilled nursing facility care after you run out of Medicare-covered days
  • Foreign travel emergency care
  • First three pints of blood of a transfusion (per calendar year)

This is how the plan operates: You pay a monthly premium for your Medigap plan. Then, when you go to the doctor, your plan pays for the applicable Medicare costs left over by original Medicare.

Depending on your plan, you could have a couple of insurance cards that you will present at time of billing. There are no network rules associated with Medicare Supplements. You can see any doctor that accepts Medicare.

What is the best Medicare supplement insurance plan?

Starting January 1, 2020, Medigap plans sold to new Medicare beneficiaries aren’t allowed to cover the Part B deductible. Therefore, plans C and F are no longer available. If you already have either of these two plans, you can keep them. 

So, the new most comprehensive supplement is Plan G. It covers: 

  • Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used up
  • Part B coinsurance or copayment
  • First three pints of blood of a transfusion (per calendar year)
  • Part A hospice care coinsurance or copayment
  • Skilled nursing facility care coinsurance
  • Part A deductible
  • Part B excess charge
  • Foreign travel emergency care (up to plan limits)

However, there are other plans that lower coverage amounts but introduce out-of-pocket limits. To ensure you have proper coverage amounts for an affordable premium, you should talk to a licensed Medicare insurance agent.

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