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Medicare Supplement Plans, also known as Medigap Plans, are essential for providing additional coverage to Medicare beneficiaries. The challenge for many, however, is comparing the various plans available on the market and finding one that meets their specific requirements.
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The Need for Supplemental Coverage
Medicare is a federal healthcare program that provides essential health coverage to senior citizens who are 65 years and older, besides those with end-stage renal disease or certain disabilities.
Medicare is divided into several parts that cover different aspects of healthcare coverage, including Part A, Part B, Part C and Part D, among others. Beneficiaries might still have to pay deductibles, coinsurance, and copayments in some instances, as defined by the rules.
These various parts, however, do not, cover all healthcare expenses, leaving gaps that can result in significant out-of-pocket expenses for enrollees. Medicare Supplement Plans close these gaps to offer beneficiaries security and financial safety.
Medicare Supplement Plans are standardized and regulated by the government to cover specific costs that original Medicare doesn’t cover. They are a good choice for those looking for comprehensive coverage.
Understanding Medicare Supplement Plans (Medigap)
Private insurance policies offered under Medicare Supplement or Medigap plans are intended to work in conjunction with Original Medicare.
These plans are designed to assist beneficiaries by covering out-of-pocket expenses that are not fully covered by Medicare. They include costs related to emergency medical coverage when traveling outside the US, deductibles, coinsurances or copays, and other out-of-pocket expenses.
Overview of Standardized Plan Options
Each Medigap plan is federally standardized, which means they offer the exact same coverage and benefit options regardless of the insurance company that provides it.
For instance, Medigap Plan F covers Medicare Part A and Part B deductibles and coinsurance entirely. Medigap Plan G offers a similar level of coverage, with Medicare Part B deductibles being the only exception.
| Plan A | Plan B | Plan C | Plan D | Plan F* | Plan G* | Plan K | Plan L | Plan M | Plan N | |
|---|---|---|---|---|---|---|---|---|---|---|
| Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used up | Y | Y | Y | Y | Y | Y | 50% | 75% | Y | Y |
| Part B coinsurance or copayment | Y | Y | Y | Y | Y | Y | 50% | 75% | Y | Y*** |
| Blood (first 3 pints) | Y | Y | Y | Y | Y | Y | 50% | 75% | Y | Y |
| Part A hospice care coinsurance or copayment | Y | Y | Y | Y | Y | Y | 50% | 75% | Y | Y |
| Skilled nursing facility care coinsurance | — | – | Y | Y | Y | Y | 50% | 75% | Y | Y |
| Part A deductible | — | Y | Y | Y | Y | Y | 50% | 75% | 50% | Y |
| Part B deductible | — | — | Y | – | Y | – | — | – | – | – |
| Part B excess charge | — | – | – | – | Y | Y | – | — | – | – |
| Foreign travel exchange (up to plan limits) | — | — | 80% | 80% | 80% | 80% | — | – | 80% | 80% |
| Out-of-pocket limit** | N/A | N/A | N/A | N/A | N/A | N/A | $6,940 in 2023 | $3,470 in 2023 | N/A | N/A |
Notes: Y = Yes, — = Not Covered
* 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 $2,700 in 2023 before your policy pays anything. (Plans C and F aren’t available to people who were 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, 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 inpatient admission.
Differentiating Medicare Supplement Plans from Medicare Advantage
Medicare Advantage plans and Medicare Supplement Plans are two separate entities. Medigap plans act as a complement to Original Medicare, helping fill some of its gaps. Medicare Advantage (Part C) plans, on the other hand, offer extra benefits like prescription drug coverage, vision, hearing, and dental care, besides certain other health and wellness services.
You can choose to enroll in a Medicare Advantage Plan or purchase Medigap when you first start receiving benefits from Medicare, but not both.
Key Factors to Consider When Comparing Medicare Supplement Plans
It is important to examine the specific benefits provided by each offering when comparing Medicare Supplement Plans. Advantages can range from basic protection like Part A coinsurance and hospital expenses to more comprehensive protection such as skilled nursing coinsurance and emergency overseas travel.
Premiums and Cost-Sharing Requirements
Medicare Supplement Plans have monthly premiums. Depending on the level of coverage provided, some plans may have higher premiums than others. You must also understand cost-sharing requirements like deductibles or co-payments related to your plan.
Provider Networks and the Freedom to Choose Doctors and Hospitals
Unlike Medicare Advantage plans, there are no provider networks for Medicare Supplement plans. Beneficiaries are free to choose any healthcare facility that accepts Medicare, so they do not have to be concerned about network limitations when choosing a doctor or a hospital.
Additional Benefits and Added Value
Even though Medicare Supplement plans provide standardized benefits, some of them might have extra features like foreign travel insurance and wellness program coverage. Those who have specific medical requirements or travel plans will find these additional benefits attractive.
Besides these key factors, you must consider the following points before picking a Medicare Supplement plan:
- Household discount: You may qualify for a household discount of up to 12%–15% when you enroll in a Medicare Supplement plan. You’ll need to confirm if you’re eligible for the discount.
- Guaranteed issue plan: ‘Guaranteed issue’ refers to an insurance company’s guarantee that it will issue you a policy at the best rate without any underwriting for health or preexisting conditions. It applies only during the Medicare Supplement Open Enrollment period.
Steps to Compare Medicare Supplement Plans
Here are the steps necessary for an effective comparison of Medicare Supplement plans:
- Assess your healthcare needs and priorities: It is vital to accurately assess your healthcare needs, including prescription drug requirements, anticipated medical services, and financial considerations, before comparing plans.
- Research available plans in your area: Make a list of the Medicare Supplement plans offered in your area based on your research. Use online resources to contract providers directly to get a comprehensive picture of each plan.
- Compare plan costs and coverage details: Compare the costs, advantages, and specifics of each plan on your list. Keep a close eye on the cost of the premiums, coverage gaps, and potential out-of-pocket costs.
- Consider the stability and reputation of insurance companies: Analyze the reputation and stability of the insurance companies providing the plans. Check out ratings and reviews to learn more about their level of customer service and satisfaction.
- Utilize online resources and tools for plan comparison: Leverage online resources and comparison tools to make your choice. Comparison tools are available on official websites like Medicare.gov, and private insurance websites.
Questions to Ask When Comparing Medicare Supplement Plans
Here are some of the most important questions to consider when you’re comparing Medicare Supplement plans:
What are the monthly premiums and how do they fit into my budget?
Examine your monthly income and spending to determine if you can afford the premiums.
What out-of-pocket costs are associated with each plan?
Know the potential out-of-pocket expenses for each plan, including deductibles and copayments.
Are there any limitations or restrictions on coverage?
Verify any pre-existing condition restrictions or limitations that may apply to a plan.
Can I keep my current doctors and hospitals with the plan I select?
Check to see if your preferred healthcare providers accept the Medicare Supplement Plan you are considering.
Does the plan I want offer additional benefits or discounts?
Explore whether the plan provides any extra benefits or discounts that align with your needs.
How stable is the insurance company offering the plan I want?
To make sure you receive reliable coverage, check the financial standing and reputation of the insurance provider offering the plan.
Additional Resources for Comparing Medicare Supplement Plans
Here are a few additional resources to help you out while comparing Medicare Supplement plans:
- Medicare.gov and the Plan Finder Tool: The official Medicare website provides an easy-to-use Plan Finder tool to assist beneficiaries in comparing available plans and their costs.
- State Health Insurance Assistance Programs (SHIPs): SHIPs are excellent resources that offer personalized guidance and support to Medicare enrollees exploring Medicare Supplement plans.
- CoverRight: CoverRight provides educational articles and resources to assist people in understanding and comparing Medicare Supplement Plans. That makes it a tool of considerable value to the decision-making process.
The goal of CoverRight is to simplify the Medicare plan selection process. We are available to assist you in locating the Medicare plans that are best suited to your individual needs. Take our self-guided Medicare quiz to find the perfect plan for your needs.
