What is Medicare Supplemental Insurance?


Sep 12, 2018

Medicare is one of the largest federally funded agencies and gives senior citizens the peace of mind of knowing that their essential health care needs are met.

While it continues to be a valuable program, there are some essential services that are not covered by original Medicare Part A and Part B. Gaps in coverage can result in colossal healthcare bills that can be a tremendous burden for sick and disabled individuals. Consequently, Medicare Supplemental insurance plans were created to fill those gaps and ensure senior citizens have access to necessary medical benefits. Medicare Supplemental Insurance, also known as Medigap, are policies sold by private insurance companies to cover original Medicare out-of-pocket expenses. Medigap plans are federally standardized and available in 47 states. There are 10 Medigap insurance plans that are identified by letters A through N. Plans E, H, I, and J are no longer available. Because Medicare Supplemental plans are standardized, a person enrolled in Plan D in Texas will receive the same coverage as an individual in Kansas enrolled in Plan D, although the premiums may vary. In order to qualify for Medicare Supplemental Insurance, purchasers must already have Medicare Part A and Part B. In addition, Medigap policies cannot be combined with Medicare Advantage plans.

Medicare Supplemental Insurance Basic Benefits

All of the 10 Medicare Supplemental insurance plans offer a different combination of services. However, these plans do not pay for dental, vision, long-term care, hearing aids or prescription drugs. Yet Medigap plans offer full or partial coverage for the following basic benefits:

  • Medicare Part A hospital care and coinsurance for costs up to 365
  • Medicare Part A and B deductible
  • Medicare Part B excess charges
  • Medicare Part B copayments and coinsurance
  • Skilled Nursing Facility with coinsurance
  • First three pints of blood as necessary for a transfusion
  • Emergency medical foreign travel

Insurance companies selling Medicare Supplemental plans do not offer every Medigap plan, but they must all provide Plan A which is the most basic of all the supplemental plans. It covers 20% of outpatient services that Medicare doesn’t cover. Medigap Plan B pays for the same services in Plan A while picking up the Medicare Part A hospital deductible. Plan C pays for all the additional benefits except the excess charges. These are the fees that physician's charges above and beyond the Medicare-allowable amount for services. Consequently, Plan C is considered a very comprehensive policy. In contrast, Plan D also pays for most of the supplemental benefits with the exception of the Part B deductible as well as the Medicare excess charges. This has made Plans D a less attractive policy. It is important to keep in mind that Medicare Supplemental Plan D is not the same as Medicare Part D which provides prescription coverage. Medigap Plan F is the most popular Medicare Supplemental plan because it covers all the gaps in original Medicare services including the hospital and outpatient deductible. Under this plan purchasers will not have any out of pocket expenses. Plan G does not have the Part B deductible, although it is very similar to Plan F. However, the premiums are less expensive than Plan F, so it is also a highly requested option. Medigap Plans K, L, and M offer partial coverage of certain benefits and are the least requested of the Medicare Supplemental plans which is why some of the participating insurance companies do not carry them. While Plan L pays 75 percent of each of the remaining Medigap benefits related to original Medicare coinsurance, copayment, blood, and skilled nursing facility care; Plan K covers only 50 percent. Plan M also pays 50% of the Part A deductible, and neither Plan K, L or M pay excess charges. Because of its lower premiums, Plan N generates more interest; however, under this plan, individuals will have to pay a copay for services like doctor and emergency room visits. And unlike Plans F and G, this plan does not cover excess charges.

Questions and Answers

The following are some of the commonly asked questions and answers related to Medicare Supplement Insurance.

Q. How much do Medigap plans cost?

A. Because Medicare Supplemental Insurance is sold on the private market, premium costs will differ for each plan based on the pricing model developed by individual insurance companies.

Q. Am I eligible for Medicare Supplement Insurance?

A. In order to purchase a Medigap plan, individuals must be enrolled in Medicare Parts A and B, be at least 65 years old or live in a state that offers coverage for individuals under 65 with a qualifying disability.

Q. When can I enroll in Medicare Supplemental Insurance?

A. The best time to enroll is during the six-month open enrollment. During this period, insurance companies cannot penalize applicants for pre-existing conditions when considering their applications.

Q. Can I keep my doctor?

A. Any doctor or medical facility that accepts Medicare will also accept all of the Medigap plans.

Q. How do I enroll in a Medigap plan?

A. The easiest way to enroll in a Medigap plan is to contact a licensed agent to compare prices from different insurance agencies.


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