Medicare recipients have several options when it comes to expanding or enhancing their Original Medicare benefits. These options vary widely, so understanding their differences can help recipients make the best choice for their care.
What is a Medicare Supplement Plan?
Original Medicare, Part A (hospital insurance) and Part B (medical insurance), require beneficiaries to share the cost of their care through deductibles, copayments and coinsurance charges. To keep premiums low, Original Medicare also imposes restrictions and limitations on certain benefits.
Medicare Supplement plans, also known as Medigap plans, help to reduce out-of-pocket expenses and expand on restrictions and limitations. Recipients still pay a premium for these plans and, depending on the plan they choose, may still be required to meet both the Part A and Part B deductibles. They save money on many other benefits that would incur copays, coinsurance charges or exceed coverage limits that would leave the recipient paying for the full cost of their care.
These plans are standardized, which is why they are given letter names. Even though Medigap plans are offered by private insurers, the plans themselves are exactly the same no matter which carrier offers them.
Medicare Plan G Benefits
Many Medicare recipients want the most comprehensive coverage enhancements possible. Plan G offers full coverage of the Part A deductible and the Part A coinsurance charges. Under Original Medicare, inpatient hospital stays are only covered for the first 90 days, with 60 lifetime reserve days available if recipients exceed those 90 days. Medigap Plan G extends that coverage for up to 365 additional days once Original Medicare benefits are exhausted.
For surgeries that require blood transfusion, Plan G pays for the first three pints. If a recipient requires skilled nursing care following an inpatient stay at a hospital, Plan G pays for the skilled nursing facility coinsurance charge. Part A’s coinsurance or copayment charges for hospice are also fully covered by Medigap Plan G.
Medigap plans that paid the Part B deductible have been discontinued as of January 1st, 2020, which leaves Plan G as one of the most comprehensive plans still available for newly eligible Medicare beneficiaries. Although it does not cover the Part B deductible, Plan G does cover costs related to Part B coinsurance or copayment charges. It also covers any excess charges that Medicare allows health care professionals to bill to the recipient for the services they receive.
Some Medigap plans impose an out-of-pocket limit, which works much the same as an Original Medicare deductible — Plan G, however, does not require enrollees to meet an out-of-pocket limit before coverage begins. It also offers the maximum amount of coverage for treatment during foreign travel, which is 80% of the cost of care.
Medigap plans do not offer prescription drug coverage, but Part D prescription drug plans are available as standalone plans that can be purchased alongside Medigap coverage. Medicare Advantage plans can offer similar coverage options combined with prescription drug coverage, but recipients cannot enroll in both a Medicare Supplement and Medicare Advantage plan at the same time.