Medicare Supplement plans, also known as Medigap, are policies that can potentially save you thousands in healthcare costs. They help close gaps in your healthcare spending. Before you sign up for one, you need to know how they work.
PRO TIP: They sound similar but do not confuse Medicare Supplement plans with Medicare Advantage supplemental benefits. The first pays down costs that Medicare leaves on the table. The second provides direct coverage for additional health services.
What Medigap Plans Do
Medigap policies are not health care in their own right. These Medicare Supplement plans help you pay for deductibles, coinsurance, and other fees left uncovered by Original Medicare. With the exception of extending foreign travel coverage, it generally does not add new services for coverage.
These plans are lettered alphabetically from A to N but do not confuse them with the parts of Medicare, i.e., A, B, C and D. Medigap plans are NOT officially a part of the Medicare program, although the private insurance companies that sell you these plans have to adhere to standards set by the federal government.
Medigap only pays toward care approved by Original Medicare. If you were denied care for any reason, a Medigap plan is not going to help.
What Medigap Plans Cover
| Coverage | A | B | C* | D | F*/** | G** | K | L | M | N |
| Part A hospital coinsurance + 365 days coverage after lifetime reserve days are used up | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
| Part A hospice coinsurance | 100% | 100% | 100% | 100% | 100% | 100% | 50% | 75% | 100% | 100% |
| Part A SNF coinsurance | — | — | 100% | 100% | 100% | 100% | 50% | 75% | 100% | 100% |
| Part A deductible | — | 100% | 100% | 100% | 100% | 100% | 50% | 75% | 100% | 100% |
| Part B coinsurance | 100% | 100% | 100% | 100% | 100% | 100% | 50% | 75% | 100% | *** |
| Part B deductible | — | — | 100% | — | 100% | — | — | — | — | — |
| Part B excess charge | — | — | — | — | 100% | 100% | — | — | — | — |
| Blood (first 3 pints) | 100% | 100% | 100% | 100% | 100% | 100% | 50% | 75% | 100% | 100% |
| Foreign travel coverage | — | — | 80% | 80% | 80% | 80% | — | — | 80% | 80% |
| Out of pocket limit | N/A | N/A | N/A | N/A | N/A | N/A | $6,620 in 2022 | $3,310 in 2022 | N/A | N/A |
** Plans F and G have two options, a standard plan and a high-deductible plan (i.e., a $2,490 deductible in 2022).
***Plan N Part B coinsurance coverage varies based on the kind of service. It pays $20 toward most office visits (i.e., excludes Annual Wellness visits which are always free to you), $50 toward ED visits if you don’t end up hospitalized, and 100% for other services.
These lettered plans are the same across all states with the exceptions of Massachusetts, Minnesota, and Wisconsin which offer their own variations. Minnesota, while offering its own state plan, does also offer the F (high-deductible version), K, L, M, and N plans.
What You Need to Know About Medigap
- You cannot sign up for a Medigap plan if you are on Medicare Advantage. You must be on Original Medicare.
- Medigap plans are not required to offer coverage to people under 65 or to people on ESRD Medicare. Check with your state to see if you’re eligible.
- Unlike Medicare, there is only one main enrollment period for Medigap. It starts when you sign up for Medicare Part B and lasts 6 months. During this Medigap Initial Enrollment Period, the insurance company offering that plan cannot charge you more based on your age or preexisting conditions.
- When you change Medigap plans outside of the Initial Enrollment Period and you do not have guaranteed issue rights to protect you, you could be faced with medical underwriting. It could mean that you pay higher premiums or could be denied coverage altogether.
- Even though every lettered Medigap plan covers the same benefits, you still want to shop around for the best plan. Every insurance company offers different rates and may have better (or worse) customer service.
References
Aging: Medigap Helpline. Wisconsin Department of Health Services. https://www.dhs.wisconsin.gov/aging/medigap.htm
Medicare | Minnesota.gov. Minnesota.gov. https://mn.gov/commerce/consumers/your-insurance/health-insurance/medicare.jsp
Medicare Supplement Plans Offered in Massachusetts 2022 Comparison of Plans Core Supplement 1* Supplement 1A. Massachusetts.gov. https://www.mass.gov/doc/2022-medicare-supplement-plan-listing/download
Your Medicare Rights and Protections. CMS.gov. https://www.cms.gov/medicare/appeals-and-grievances/mmcag/downloads/rightsandprotections.pdf
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