Medicare Supplement (Medigap) plans are health insurance policies that pay secondary to Original Medicare. These plans limit the amount you pay after Original Medicare benefits.
Once Medicare Part A and Part B pay their portion, Medicare Supplement plans cover the costs left behind. Enrolling in a Medicare Supplement plan can set Medicare beneficiaries up for success by offering low out-of-pocket costs and reasonable monthly premiums.
What is a Medicare Supplement Plan?
Private insurance companies sell Medicare Supplement insurance policies to help cover the out-of-pocket costs associated with Original Medicare. There are 10 Medicare Supplement plans available for beneficiaries and two high deductible plans with lower monthly premiums. These Medigap plans are available in 47 of 50 states nationwide.
Minnesota, Massachusetts, and Wisconsin are the only three states that do not offer the traditional Medicare Supplement plans. These states have unique plans that provide similar benefits to conventional Medigap plans.
The federal government standardizes each Medicare Supplement plan to allow equal benefits regardless of the plan’s carrier. Thus, Medigap Plan G must offer the same benefits from carrier to carrier.
How Does A Medicare Supplement Plan Work?
Medicare Supplement plans work with Original Medicare to help decrease the out-of-pocket costs not covered by Medicare Part A and Part B. Medicare Supplement plans offer several unique benefits that help them remain a top plan option for Medicare beneficiaries.
Medicare Supplement Plan Perks:
- No referrals to see a specialist
- Predictable costs – no unexpected out-of-pocket costs
- Wide range of plans available
- Guaranteed renewable coverage
- Coverage travels with you across 50 states
- International emergency coverage
- No network restrictions
As you can see, there are several perks of enrolling in a Medicare Supplement plan.
What Do Medicare Supplement Plans Cover?
Medicare Supplement plans cover the costs left over by Original Medicare. If Original Medicare does not typically cover the service, your Medicare Supplement plan will also not provide benefits. After Medicare Part A and Part B pay their share, Medicare Supplement plans cover some additional costs that would typically be the beneficiary’s responsibility.
Medicare Part A and Medicare Part B have deductibles, coinsurance, and copays for which beneficiaries are responsible. Medicare Supplement plans help cover these costs. The purpose of Medigap is to protect beneficiaries from the gaps in Medicare Part A and Part B.
However, not every Medicare Supplement plan covers the same benefits. The chart below depicts the ten standardized Medicare Supplement plans and the two High Deductible plans and their benefits.
Like Original Medicare, Medicare Supplement plans only cover one person. So, a husband and wife can be on the same plan but must be under two separate policies. Or, if a husband and wife have different health needs, there is no issue with them having a different plan or different carrier.
Medicare Supplement plans do not cover:
- Prescription drug coverage
- Additional services not covered by Original Medicare.
If you enroll in a Medicare Supplement plan, stand-alone plans and Medicare Part D are available if you require additional benefits.
How Much Do Medicare Supplement Plans Cost?
Medicare Supplement plan benefits are standardized. However, the cost of the plans from one carrier to another is not. So, it is essential to compare Medigap plan prices when enrolling.
Several factors influence the monthly premium cost of Medicare Supplement plans. These factors can include age, location, health, gender, etc. Additionally, each Medicare Supplement plan letter has a different premium starting point.
When it comes to cost, the plans with the lowest benefits will have a lower monthly premium, and the plans with the most comprehensive coverage will have a higher monthly premium. Depending on the coverage level, these costs can range anywhere from $50-$500 per month.
What is the Best Medicare Supplement Plan?
When deciding which Medicare Supplement plan is the best, there are many plans to choose from. Finding the best plan for you depends on your wants and needs for health care coverage. Medicare does not offer one plan that fits every beneficiary’s needs, so an array of options is offered based on coverage level.
If you are looking for the most comprehensive plan on the market, you might find Medicare Supplement Plan F to be the best option for you. Keep in mind, the Medicare Supplement Plan F is not available to those new to Medicare.
If you did not receive Medicare before January 1, 2020, you would not be eligible to enroll in Plan F. In this case, Medicare Supplement Plan G would be your most comprehensive coverage option.
If you are only looking for coverage in the case of an emergency, Medigap Plan N might work best for you.
Because these three plans offer the most coverage, they are also the most popular among Medicare Supplement plan enrollees. The chart below shows the breakdown of Medicare Supplement beneficiaries enrolled in each plan during 2019.
|Plan Type||% of Enrollees||Total Enrollees|
|Plan F||49%||6.8 million|
|Plan G||22%||3 million|
|Plan N||10%||1.4 million|
|All other plans||19%||2.8 million|
|Medicare Supplement policies in force from 2016 through 2019. Source: The State of Medicare Supplement Coverage. ahip.org. Accessed on October 15, 2021.|
Medicare Supplement Plan Eligibility And Enrollment
If you have Medicare Part A and Part B, you are eligible for a Medicare Supplement plan. When you first become eligible for Medicare, you get an Initial Enrollment Period. Alongside this enrollment period, you also qualify for the Medicare Supplement Open Enrollment Period (MSOEP).
During the Medicare Supplement Open Enrollment Period, you have six months to enroll in a Medicare Supplement plan without underwriting health questions. This means that a Medigap carrier cannot deny you coverage for any reason.
If you miss your MSOEP, you can still apply for a Medigap plan at anytime. However, you are now subject to underwriting health questions and can be denied coverage based on pre-existing conditions.
Thus, the best time to enroll in a Medicare Supplement plan is during your Medicare Supplement Open Enrollment Period.
Do Medicare Supplement and Medicare Advantage Plans Work Together?
If you enroll in a Medicare Advantage plan, you cannot enroll in a Medicare Supplement plan. The Center for Medicare & Medicaid Services (CMS), the governing body of Medicare, only allows beneficiaries to enroll in one plan or the other.
If you enroll in both plans, cost-sharing implications would contradict themselves, and one plan would outweigh the other. This means that you would never be able to use the benefits simultaneously. To clear any confusion for beneficiaries, it is illegal to enroll in both plan types.
Thus, the two plans do not work together. Medicare Supplement plans work as their own plan secondary to Original Medicare.