Medicare supplement insurance, also known as Medigap, is extra insurance policies sold by private companies. The purpose of a Medicare supplement insurance plan is to help pay for the associated healthcare costs that are not covered by Original Medicare. Some of these expenses include: 

  • Co-payments 
  • Co-insurance 
  • Deductibles 
  • Medical care if you travel outside the U.S. 

While Medicare supplement insurance does help provide gap coverage to some healthcare costs, does not cover areas like: 

  • Long-term care 
  • Dental
  • Vision 
  • Hearing-aids 
  • Eyeglasses 
  • Private-duty nursing 

In addition, most Medigap policies don’t cover prescription medications. 

How Medicare Supplement Insurance Works 

Medicare supplement insurance is only available to Orginal Medicare policyholders — and those subscribers must have Medicare Part A and Part B. With a Medigap policy, you will pay a monthly premium to the private insurance company, while on top of your Part B premium. 

Medigap policies only cover one individual. Therefore, if your partner also wants additional coverage, they will need their own policy. A standardized Medicare Supplement insurance policy is guaranteed renewable as long as you continue to pay your premium — your health problems cannot exclude you from coverage. 

Since most Medigap policies don’t cover the cost of prescription medicine, Medicare Part D policies are often picked up by individuals. Medicare supplement insurance plans offer multiple policy options. Labeled A – N, with policies E, H, I, J being unavailable to new subscribers. 

These policies vary in price from private insurance firms, and it is recommended to work with a Medicare insurance broker to help find you the right coverage (and price) for your healthcare needs.  

Medicare Supplement Insurance Plans

Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used upyesyesyesyesyesyes yesyesyesyes
Part B coinsurance or copaymentyesyesyesyesyesyes50%75%yesyes***
Blood (first 3 pints)yesyesyesyesyesyes50%75%yesyes
Part A hospice care coinsurance or copaymentyesyesyesyesyesyes50%75%yesyes
Skilled nursing facility care coinsurancenonoyesyesyesyes50%75%yesyes
Part A deductiblenoyesyesyesyesyes50%75%50%yes
Part B deductiblenonoyesnoyesnonononono
Part B excess chargenonononoyesyesnononono
Foreign travel exchange (up to plan limits)nono80%80%80%80%nono80%80%
Out-of-pocket limit in 2020**N/AN/AN/AN/AN/AN/A$5,880$2,940N/AN/A

* Plans F and G also offer a high-deductible plan in some states. With this option, you must pay for Medicare-covered costs (coinsurance, copayments, and deductibles) up to the deductible amount of $2,340 in 2020 before your policy pays anything. (Plans C and F aren’t available to people who are newly eligible for Medicare on or after January 1, 2020.)

** For Plans K and L, after you meet your out-of-pocket yearly limit and your yearly Part B deductible ($198 in 2020), the Medigap plan pays 100% of covered services for the rest of the calendar year.

*** Plan N pays 100% of the Part B coinsurance, except for a copayment of up to $20 for some office visits and up to a $50 copayment for emergency room visits that don’t result in an inpatient admission.

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