Medicare supplement insurance plans, otherwise known as Medigap policies, are designed to help with some of the cost exposure inherent in Original Medicare, such as copayments, coinsurance and deductibles. Some of these policies cover deductibles as well. Of course, the associated cost is reflected in the level of benefits each plan provides.
Cost of Medicare Supplement Insurance
Only those enrolled in Original Medicare Parts A and B are eligible for supplement plans. Premiums due include payments to Medicare for Part B plus payments to the insurance carrier for the Medigap policy. Additionally, unlike some Medicare Advantage plans, supplement plans do not include Part D. Therefore, a premium would also be due to the insurance company carrying your drug coverage. It is possible that the company in which you are enrolled for supplement insurance also offers Part D. In that case, inquire if the premiums are rolled into one bill or collected separately.
Comparison of Supplement Plans
The 10 supplement plans currently on the market are labeled by letter: A, B, C, D, F, G, K, L, M and N. Three states are an anomaly in the standards that apply. If you live in either Massachusetts, Minnesota or Wisconsin, visit Medicare.gov to learn how the plans differ in your state of residence.
The plans are sold only through private insurance carriers. Regardless, all plans must include the same basic benefit provisions at minimum. Although these companies sit outside the government, they are obligated to adhere to federal and state laws. These regulations require that if a private insurance company elects to offer Medigap policies, they must include plan A in their offering because it is the standard plan for basic coverage.
Plan B Coverage
Plan B is one notch above the coverage in Plan A. Basic coverage includes Part A coinsurance and hospital costs for up to 365 additional days after Original Medicare benefits have been exhausted. Also, Plan A covers Part B coinsurance or copayments, the first three pints of blood annually, Part A hospice care coinsurance or copayments and skilled nursing facility care coinsurance. Where Plan B becomes advantageous is that it also covers the Part A deductible, which, in 2020, is projected to rise to $1,420.
Check to see if Plan B is available in your state. The private carriers who sell supplement plans are not required to make every plan available, and state laws may impact those they may offer. Generally, the more generous the plan, the higher the premium. Therefore, research the plans you have access to, and select the one that offers the benefits you need at a price you can afford.
Medicare Supplement Enrollment
When you are 65 years of age and enrolled in Medicare Part B, you enter your Medicare Supplement Initial Enrollment Period. This is a 6-month period when you have a guaranteed issue right to purchase any Medicare Supplement plan sold in your state. After this period ends, you may be subject to medical underwriting and can be rejected or charged more for a plan.