Medicare Supplement (Medigap) Plans: Coverage, Costs, and Eligibility

As you approach your 65th birthday, choosing a Medicare plan might seem overwhelming, but it’s not so bad when you break it down. Medicare has two sections: Part B and Part A.

Medicare Part A covers your hospital care, skilled nursing facilities, and hospice costs. It’s generally premium-free. Medicare Part B provides medical and preventative services as well as medical equipment, for which you pay a monthly premium.

In this article, we’ll cover the most important things you need to know about supplemental Medicare insurance, as well as how to find the best Medicare Supplement plans and how you can get free quotes without getting spammed.

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Original Medicare benefits cover about 80% of all major medical costs.
Medicare Supplement Insurance (Medigap) is available from private insurance companies to cover the 20% coverage gaps in Medicare.
Benefits vary from plan to plan, but they are standardized.
If you are eligible for Medicare, the best time to get a Medicare Supplement Insurance plan is during your Medicare Supplement Open Enrollment Period while you have a guaranteed issue right.
After your guaranteed issue right expires, a private insurance company is not required to sell you a policy. By federal law, Medicare Supplement plans can turn you down.
The alternative to a Medicare Supplement is Medicare Advantage. They cover the same benefits as Original Medicare and may offer additional benefits.

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What’s the Difference Between Medicare and Medicare Supplement?

Medicare, which is run by the Centers for Medicare & Medicaid Services, is a federal program that provides health insurance to millions of Americans. Most people are eligible for Medicare at age 65. Some people qualify due to their Social Security disability status.

A Medicare Supplement is additional insurance from private insurance companies. People buy it to help cover some of the gaps in Medicare’s coverage.

Medicare Supplements Work with Original Medicare

Medicare Supplement insurance works in conjunction with Medicare Part A (hospital costs) and Medicare Part B (medical care). These two parts of Medicare, also known as Original Medicare, cover about 80% of a beneficiary’s major medical costs.

The other 20% is the beneficiary’s responsibility. These out-of-pocket costs are paid through deductibles, copayments, and coinsurance charges when you use healthcare services.

People cover these out-of-pocket expenses in one of a few different ways:

Directly out of pocket;
Through retiree healthcare benefits;
Using veteran or TRICARE benefits;
Using Medicaid benefits;
By joining a Medicare Advantage plan, and;
With a Medigap policy.

Trying to cover these costs directly out of pocket is a mistake. Even for the healthiest people.

The cheapest Medicare Supplements start at less than $50 per month in most areas. Compare this with the Medicare Part A deductible, which is [medicare_costs value=”parta-deductible”] per benefit period.

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Who is Eligible for a Medicare Supplement?

Anyone enrolled in both Medicare Parts A and B can apply for supplemental Medicare coverage. That said, there’s no guarantee your application will be accepted, except for one.

Medicare Supplements are regulated by both federal and state laws. Federal law requires all companies to issue a policy to an individual when they have a guaranteed issue right. This protection occurs when an individual turns age 65 and enrolls in Medicare Part B.

Some states have expanded enrollment rules. And, some states required insurance companies to cover people under the age of 65, whereas federal laws do not.

How Much Do Medicare Supplements Cost?

Plan costs vary significantly. Where you live is a factor. Your age is a factor. And the amount of coverage you want is a factor.

The best way to get plan costs for your particular situation is to use our Free Medicare Supplement Rate Comparison Service. Simply tell us the plan information you want and we’ll send it to you.

We can help you find a cheap Medicare Supplement, like Plan N, Plan K, or High Deductible Plan G. Or we can show you the rates on the best-selling plan, Medicare Supplement Plan G. It’s up to you. We’re here to help you find what works best for you.

What Medicare Benefits do Medicare Supplements Cover?

Medicare Supplements cover the out-of-pocket costs of Medicare-approved healthcare services. They do not add additional Medicare benefits.

Most of your Medicare out-of-pocket costs can be broken down into deductibles, coinsurance or copayments, excess charges, and the cost of blood. Medicare Part A and Part B work differently, so it’s important to understand the Medicare-approved costs in each part.

The following Medicare Supplement Plans Comparison Chart explains the Medigap coverage you get with each plan:

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Now that you know what’s what, let’s take a look at some plans.

The 10 Standardized Medicare Supplement Plans

The standardized Medigap plans (A, B, D, G, K, L, M, and N) are designed to make supplemental coverage easier to compare. Each lettered plan offers the exact same benefits, regardless of which insurance company you use. The only difference is the price.

The three most common policies sold are Plan F, Plan G, and Plan N.

Medigap Plan F

Even though Plan F is no longer available to people turning age 65 this year, we’ll cover it here so you can understand why it’s not really a great loss.

Plan F was a favorite because it covered all of the gaps in Original Medicare. It covered all deductibles, copayments, and coinsurance. So, for a single monthly payment, you were covered for everything. This is why it was so popular.

There is also a high deductible Plan F. It offers its beneficiaries big savings on their monthly premium, but coverage does not start until Part A and B costs reach the annual deductible amount ([medicare_costs value=”medigap-high-deductible”]).

Medigap Plan G

Medicare Supplement Plan G is identical to Plan F with a single exception. Plan G does not cover the annual Medicare Part B deductible. As a result, if you have this plan you will pay all costs to see your doctor, or receive other medical services until the Part B deductible is met ([medicare_costs value=”partb-deductible”]). Other than that, Plan G covers all other deductibles, copays, and coinsurance.

The interesting thing about Plan G is that it usually costs less than a Plan F policy when you factor in the Medicare Part B deductible. For this reason, most people don’t consider the loss of the Plan F policies a loss at all.

One of the important costs Plan G covers is Part B excess charges. What are excess charges in Medicare? They are costs above the Medicare-approved amount that some doctors and other healthcare providers charge. Without this coverage, Medicare pays its approved amount and you pay the remainder.

Medigap Plan N

First offered in 2010, Plan N is one of the newer Medigap plans and is quickly becoming a favorite. Unlike Plan G, which covers almost everything, Plan N does have some cost-sharing. But, its cost-sharing is simple and not burdensome for most people.

That’s why people like it. It’s particularly well suited to healthy individuals.

With a Plan N policy, you pay up to $20 for doctor office visits and up to $50 when you use the emergency room. You are also responsible for Medicare Part B excess charges on all covered services.

You can learn about the other Medicare Supplement coverage available on these pages:

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Does Medicare Supplement Insurance Cover Any Extras?

Unlike Medicare Advantage plans, which can add additional benefits, Medicare Supplement insurance cannot. So, if Medicare doesn’t cover it, Medicare Supplement plans can’t cover it either.

Medicare and Medigap are in lock-step when it comes to the coverage of healthcare services. If a service isn’t Medicare-approved, it can’t be covered by a Medigap policy, either.

As a result, there are some things that are not covered by Medicare and Medigap that most people need, including:

Prescriptions
Routine dental
Vision and hearing exams
Hearing aids
Eyeglasses or contacts
Long-term care or custodial care

The number one additional coverage most people want and need is a prescription drug plan. Prescription drug coverage is available through Medicare Part D starting at about $20 per month. You can shop and compare Medicare Part D prescription drug plans here. Medicare Part D is compatible with all Medicare Supplement Insurance plans.

For your dental and vision needs, we recommend DentalPlans.com.

Medicare Supplement Plans vs. Medicare Advantage

If you are just becoming eligible for Medicare, now is a good time to compare what you get with a Medicare Supplement plan vs. a Medicare Advantage plan. Both offer more coverage, but they do it in completely different ways.

Whereas a Medicare Supplement plan works in conjunction with Parts A and B, a Medicare Advantage plan completely replaces these benefits with private insurance. Most plans offer some of the medical coverage Medicare does not cover, including a prescription drug plan, dental, vision, and hearing, to name just a few.

Most Medicare Advantage plans have network restrictions. Health Maintenance Organization (HMO) plans require you to get all of your care, except emergency room visits, through network providers. With Preferred Provider Organization (PPO) plans, you will pay more if you go out-of-network for care.

Both Medicare Advantage HMO and PPO plans require referrals and pre-authorization of some services. This is how private insurance companies save money.

If you are wondering, do I really need supplemental insurance with Medicare, consider this. None of the restrictions just mentioned exist with Medicare Supplement plans.

There are no networks. And referral and pre-authorization are never required. If Medicare pays, your Medicare Supplement Insurance plan pays (up to the plan limit). This is why most experts feel Medicare Supplements are better than Medicare Advantage. They are worth the cost.

When Can I Enroll in a Medicare Supplement Plan?

Unlike other types of Medicare health plans, there isn’t a Medicare Supplement open enrollment period at a set time each year. You can apply for a new plan anytime. And, you can cancel your existing plan at any time.

That said, we each have a personal Medicare Supplement Open Enrollment Period. This open enrollment period begins when you first enroll in Medicare Part B and last for six months.

During this period of time, you have certain protections. The most important protection is your guaranteed issue right.

This right allows you to buy any plan from any insurance company you choose. You cannot be turned down.

Once your guaranteed issue right expires, you can be denied a policy. If you have a chronic health issue, you are almost certain to be turned down. If your application is accepted, they may require you to accept a six-month waiting period or a policy with less coverage.

How Do I Apply for Medicare Supplement Insurance (Medigap)?

To apply for a plan you will need to work with a licensed insurance agent. We have partnered with HealthCompare, an Allstate company, to assist our visitors. They offer a wide selection of plans from AARP/United Healthcare, Humana, Aetna, Cigna, Wellcare, Mutual of Omaha, and many more.

Call 1-855-728-0510 (TTY 711) and speak with a licensed HealthCompare insurance agent. There’s no obligation, and they offer more plan options than any other national agency.

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Frequently Asked Questions

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