Medicare allows some private insurance companies to create insurance policies that supplement Original Medicare Part A and Part B coverage. These plans, called Medigap or Medicare Supplement plans, are sold to eligible Medicare recipients. Medigap plans charge varying premiums based on the wide range of benefits offered by each plan. Medigap plans are standardized and identified by letters, but compare the options available in your state to find the policy that meets your specific needs.

What a Medicare Supplement Plan Provides 

Original Medicare covers the costs of many medical expenses, but many recipients worry about the potential for out-of-pocket costs. Medicare Part A covers some costs associated with inpatient hospital treatment, a skilled nursing facility, or hospice. Medicare Part B covers some costs associated with medically necessary outpatient services and supplies. Although Medicare Part A and Part B can help cover many expenses, recipients are still obligated to pay deductibles, copayments and coinsurance amounts.

A Medigap plan can help alleviate the burden of some of the costs of deductibles, coinsurance, copayment, and medical care outside of the United States. There are a variety of policies that offer supplemental coverage. In most states, each plan is designated by a letter, with current Medigap plans labeled as A, B, C, D, F, G, K, L, M and N. These plans are standardized by the federal government and can help recipients identify what benefits are offered by each plan since these plans are required to provide the same type of coverage no matter what state the insurer is in.

Some states, such as Massachusetts, Minnesota and Wisconsin, may label and regulate their supplemental plans differently. Nationally, Medicare laws can also change and that can have an impact on which Medigap plans are still valid and which may be phased out.

These are the benefits that may be available with a Medicare Supplement plan:

  • Coverage for Part A hospital coinsurance costs for up to 365 days once Part A’s coverage is used up.
  • Part B copayments and coinsurance amounts.
  • Coverage for the first three pints of blood if required during treatment.
  • Hospice care share-of-cost obligations with Part A.
  • Coinsurance related to a stay in a skilled nursing facility.
  • Coverage for the deductibles for Part A or Part B.
  • Excess charges not covered by Part B.
  • Medical emergencies while traveling in a foreign country.

Each Medigap plan can determine which benefits it offers, so some plans may not include every benefit listed here. Insurers can also decide how much of the cost they cover in certain cases, so some plans may cover 100% of a deductible, copayment or coinsurance amount while others will only cover a partial amount. Carefully evaluating your health needs can help you pick a plan that will provide the most cost-effective opportunities.

Are Medigap and Medicare Advantage Plans the Same? 

Because Medicare Advantage Plans also provide benefits in addition to the coverage that Original Medicare provides, it can be easy to confuse these types of policies. However, Medigap works as a supplement to Original Medicare Part A and Part B only. If you enroll in a Medicare Advantage plan, you cannot purchase a Medigap plan. Medicare Advantage plans bundle Part A and Part B benefits with additional coverage, such as vision and dental care and prescription drug coverage. Recipients cannot have both a Medigap plan and a Medicare Advantage plan.

Important Considerations for Medigap Plans 

The initial enrollment period for a Medigap plan begins the month a recipient turns 65 and is enrolled in Part B. Recipients have a 6-month period to purchase any Medigap plan available in their state.  During this initial enrollment period, recipients have a guaranteed issue right to purchase a Medigap plan without being subject to medical underwriting. If you do not choose a plan during this time period, there may be special enrollment options available if you lose supplemental coverage through an employer or another Medigap or Medicare Advantage plan provider. A special enrollment period begins 60 days before a loss of coverage is expected to occur and can last up to 63 days after it happens.

Recipients with pre-existing conditions should be aware that they may face an increase in premiums or a waiting period for coverage if they purchase a Medigap plan outside of an initial or special enrollment period. This waiting period may last for up to 6 months. During this time, healthcare costs that are not related to the pre-existing condition can be covered by Medigap benefits, but any related expenses are still the recipient’s responsibility to cover until the waiting period is over.

Related articles:

What is Medigap?

What is Medicare Parts A & B