Medicare Supplement (Medigap) Plans
Medicare Supplement plans, also called Medigap, help cover costs not included in Original Medicare (Parts A and B), such as deductibles, copayments, and coinsurance. Unlike Medicare Advantage (Part C) or prescription drug plans (Part D), Medigap plans work to fill gaps in Original Medicare coverage without replacing it or adding new benefits.
Medigap plans are offered by private insurers but must follow federal and state regulations to ensure standardized coverage. The Centers for Medicare & Medicaid Services (CMS) oversee Medicare programs, but the details of Medigap plans, such as pricing and additional offerings, are handled by licensed insurers.
Overview of Medicare Supplement Plans
Medigap plans are available in 10 standardized types: A, B, C, D, F, G, K, L, M, and N. Although the plan benefits are the same across states, with exceptions in Massachusetts, Minnesota, and Wisconsin, insurers can charge different premiums. Each plan covers a portion of out-of-pocket costs, with some providing extra benefits like foreign travel emergency coverage.
Key points to remember:
- Medicare Part A and B enrollment is required to buy a Medigap policy.
- Medigap plans only cover one individual—you and your spouse must purchase separate policies if both want coverage.
- Medigap plans are guaranteed renewable, so your coverage can’t be canceled due to health conditions, provided you continue to pay premiums.
- You cannot have both a Medigap policy and a Medicare Advantage plan. If you switch from Medicare Advantage back to Original Medicare, you can then apply for a Medigap policy.
Medigap Plans: Coverage Differences and Changes
Medigap plans differ in terms of the benefits they provide, especially regarding coverage for foreign travel and costs not covered by Original Medicare. However, certain plans have been discontinued for new beneficiaries due to changes in Medicare regulations. For example, Plan C and Plan F are no longer available to those newly eligible after January 1, 2020, as they cover the Part B deductible, a feature that the government has phased out to reduce unnecessary healthcare use.
If you already had one of these plans before 2020, you can keep your coverage, though premiums may rise over time.
Comparing Medicare Supplement Plans
Although all Medigap plans must provide the same standardized benefits, the pricing varies depending on how insurers calculate premiums:
If you already had one of these plans before 2020, you can keep your coverage, though premiums may rise over time.
- Community-rated: Premiums are the same regardless of age, but may adjust for inflation.
- Issue-age-rated: Your premium is based on the age you are when you first buy the policy, with younger enrollees paying less. Premiums do not increase as you age but may adjust for inflation.
- Attained-age-rated: Premiums start lower but increase as you get older, with adjustments for both age and inflation.
This pricing structure can make comparing Medigap policies a key factor in choosing a plan. Lower premiums at the time of enrollment don’t always mean long-term savings.What About Extra Benefits?
While Medigap plans primarily cover out-of-pocket expenses, some insurers offer additional benefits to attract enrollees, such as international travel coverage or discounts on fitness programs like SilverSneakers. Be aware that these extras may result in higher premiums.
Understanding the Coverage of Each Plan (Plans A through D)
Medigap Plans A, B, C, and D offer similar basic benefits, including:
- Part A hospital coinsurance and costs up to an additional 365 days after Medicare benefits are exhausted.
- Part A and Part B copayments and coinsurance.
- Coverage for the first three pints of blood needed for medical procedures.
Differences include:
- Plan A does not cover the Part A deductible or skilled nursing facility coinsurance.
- Plan B covers the Part A deductible but not skilled nursing.
- Plan C, which is no longer available to new beneficiaries, covers both Part A and Part B deductibles.
- Plan D covers the Part A deductible but not the Part B deductible
The Difference Between Plan F and Plan G
Plan F, which is no longer available to new enrollees, and Plan G are the most comprehensive Medigap plans. Both cover the Part A deductible, skilled nursing facility coinsurance, foreign travel emergencies, and more. The key difference is that Plan G does not cover the Part B deductible, making it a popular alternative now that Plan F is closed to new enrollments.
Plan G also comes in a high-deductible version for those looking to lower their premiums, though they will need to meet a higher deductible before the plan’s benefits kick in.
Plans K, L, M, and N
Medigap Plans K, L, M, and N offer reduced coverage levels compared to Plans F and G. For instance:
- Plan K covers 50% of certain costs, including Part B copayments and deductibles.
- Plan L covers 75% of these expenses.
- Plan M provides 100% coverage for Part B copayments but only 50% of the Part A deductible.
- Plan N covers most costs but requires copayments for certain services, such as doctor visits.
Medicare Advantage vs. Medigap
It’s essential to understand that Medicare Advantage and Medigap plans are not the same. Medicare Advantage (Part C) plans often provide additional healthcare benefits, like vision or dental coverage, whereas Medigap plans supplement your Original Medicare by covering financial gaps like deductibles and copayments. You cannot have both types of plans at the same time.
Coverage for Pre-Existing Conditions
If you enroll in a Medigap plan during your Medicare Initial Enrollment Period (IEP) or during a Medigap Open Enrollment Period, you are guaranteed issue rights. This means insurers cannot deny you coverage or charge more based on your health or pre-existing conditions. However, if you apply after these periods, the insurer may require medical underwriting and could impose a waiting period or higher premiums based on your health history.
Prescription Drug Coverage and Dental Services
Medigap plans do not include prescription drug coverage. If you need prescription coverage, you should consider enrolling in a Part D prescription drug plan. Additionally, routine dental care, such as cleanings and fillings, is not covered under Medigap policies. You can get dental coverage through standalone dental plans or by choosing a Medicare Advantage plan that offers dental benefits.
How Much Do Medicare Supplement Plans Cost?
Medigap plans require an additional monthly premium beyond what you pay for Part B coverage. Premium amounts depend on several factors, including the plan type, your location, and the insurer’s pricing method. For instance, Plan F tends to have higher premiums due to its comprehensive coverage, while Plan A, which offers fewer benefits, may have lower premiums.
How to Enroll in a Medicare Supplement Plan
To enroll in a Medigap plan, you must already be enrolled in Medicare Parts A and B. The best time to sign up is during your Medigap Open Enrollment Period, which lasts six months after you first enroll in Part B. During this time, you have guaranteed issue rights and can’t be denied coverage or charged higher premiums based on your health. Waiting until after this period may lead to higher premiums or denial of coverage based on medical underwriting.
Before purchasing, carefully consider your health needs, potential future medical expenses, and budget to select the best Medigap plan for you.
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