Out of the 64 million people in the United States who have traditional Medicare benefits, 81 percent of them have one sort of Medicare supplement insurance. These supplemental plans may include those that are provided by an employer, Medigap plans, or supplemental health care coverage through Medicaid.

Medicare supplement insurance policies help fill in the gaps left by Original Medicare health care insurance. For many people, Medicare Supplement, also known as Medigap, insurance helps them economically by paying some of the out-of-pocket costs associated with Original Medicare.

If you are considering a Medicare Supplement plan and would like to know how it works, what it covers, and how much it may cost, here are some of the important facts you should know.

Who is eligible for Medicare Supplement insurance?

In order to purchase a Medicare Supplement plan, you must be 65 years of age and enrolled in Part B. To be eligible for Medicare, you must be at least 65 years old, a citizen of the United States or permanent legal resident for at least five consecutive years. Also, you, or your spouse, must have worked and paid federal taxes for at least ten years (or 40 quarters).

You are also eligible for traditional Medicare insurance if you are younger than 65 but have received disability benefits for 24 consecutive months, have end-stage renal disease, or Lou Gehrig’s disease. However, not all private insurance providers sell supplement insurance policies to those who are younger than 65 even if they are enrolled in Medicare Parts A and B. Private companies are not required by federal law to accept people younger than 65.

When you turn 65 and enroll in Part B, you will have a 6-month Initial Enrollment Period to purchase any Medigap plan sold in your state. During this time, you have a “guaranteed issue right” to buy any plan available. They are required to accept you and cannot charge you more due to any pre-existing conditions.

If you are younger than 65 and qualify for Medicare, you may find a private insurance provider that does sell Medigap plans to those under 65 who meet the eligibility requirements. Make sure to ask an insurance company representative for this information if you are interested in supplement insurance.

What is Medicare Supplement insurance and what does it cover?

Medicare Supplement plans are standardized by the federal government and are identified as letters. Supplement insurance plans are sold by some private insurance providers in the United States. Not all companies have them, or sell all available plans, so you may have to look for one in your area.

These plans help Original Medicare beneficiaries pay for some of the out-of-pocket health care costs left unpaid by Medicare. Most supplement plans pay for Medicare copayments, coinsurance, and deductibles. But the coverage may vary according to the plan you choose.

Medicare Supplement plans work together with Original Medicare. First, Medicare pays for a percentage, usually 80 percent, of the Medicare-approved cost of your health care service. After this is paid, your supplement policy pays your portion of the remaining cost. This is generally 20 percent.

Some policies pay your deductibles The deductible is a set amount which you must pay before Medicare begins covering your health care costs. It is important to note that beginning on January 1, 2020, Medigap plans are no longer allowed to cover the Part B deductible. If you had already purchased Medigap Plans C or F, you will be able to keep your coverage, but these plans will not be available for new Medicare enrollees.

Medicare Supplement insurance plans are different from Medicare Advantage (Part C) plans. If you have a Part C plan, you cannot purchase a Medicare Supplement insurance plan.
Each plan varies in what it covers, but all plans pay for Medicare Part A (hospital insurance) coinsurances for up to 365 days beyond the coverage that Medicare offers. Some of the plans cover a percentage of the cost for emergency health care while traveling abroad. Most plans do not cover long-term care, vision, dental, hearing care, or private nursing care.

All Medicare Supplement insurance coverage comes with a monthly premium which you pay directly to your provider. How much you pay depends on which plan you have. Depending on your health care needs, it may be beneficial to you to have a supplement insurance plan. It is worth the time to see what plans are available in your area.

Keep in mind that, just like Medicare, Medicare Supplement plans are individual insurance policies. They only cover one person per plan. If you want coverage for your spouse, you must purchase a separate plan. These plans also do not include prescription drug coverage. In order to get prescription drug coverage, you can enroll in a Part D Prescription Drug Plan.

Related articles:

Does Medicare Supplement Cover Deductibles? (Opens in a new browser tab)

Can I Take My Medigap Plan with Me When I Move?(Opens in a new browser tab)