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
| Benefits | A | B | C | D | F* | G* | K | L | M | N |
| Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used up | yes | yes | yes | yes | yes | yes | yes | yes | yes | yes |
| Part B coinsurance or copayment | yes | yes | yes | yes | yes | yes | 50% | 75% | yes | yes*** |
| Blood (first 3 pints) | yes | yes | yes | yes | yes | yes | 50% | 75% | yes | yes |
| Part A hospice care coinsurance or copayment | yes | yes | yes | yes | yes | yes | 50% | 75% | yes | yes |
| Skilled nursing facility care coinsurance | no | no | yes | yes | yes | yes | 50% | 75% | yes | yes |
| Part A deductible | no | yes | yes | yes | yes | yes | 50% | 75% | 50% | yes |
| Part B deductible | no | no | yes | no | yes | no | no | no | no | no |
| Part B excess charge | no | no | no | no | yes | yes | no | no | no | no |
| Foreign travel exchange (up to plan limits) | no | no | 80% | 80% | 80% | 80% | no | no | 80% | 80% |
| Out-of-pocket limit in 2020** | N/A | N/A | N/A | N/A | N/A | N/A | $5,880 | $2,940 | N/A | N/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.