Medicare Supplement (Medigap) Plans

Summary: Medicare Supplement plans, often referred to as Medigap, help cover your out-of-pocket costs for Original Medicare. These plans are standardized by the federal government but are offered by private insurance carriers. By reading this article, you’ll gain an understanding of what Medicare Supplement plans cover, how they work, and how you can enroll in one. Estimated Read Time: 6 min

What is a Medicare Supplement Plan?

Medicare Supplement plans, often referred to as Medigap plans, are Medicare insurance plans offered by private carriers that help cover the out-of-pocket costs associated with Original Medicare. Each Medicare Supplement plan is standardized by the federal government to allow equal benefits regardless of which carrier you get the plan from.

There are 10 different types of Medicare Supplement plans available in most states for individuals who are enrolled in Original Medicare. These plans are named by letters: Medicare Supplement Plan A through D, Plan F, Plan G, and Plans K through N. Additionally, there are two high-deductible plans available: High-deductible Plan F and High-Deductible Plan G. Plan availability will vary by location and carrier.

These lettered plans are available in most states, with Massachusetts, Minnesota, and Wisconsin being the three states that standardize Medicare Supplement insurance in a different way. Below is a brief overview of how these three states handle Medicare Supplement plans differently.

• Massachusetts – has three Medigap policies available: the Core Plan, the Supplement 1 Plan (only available to individuals who were eligible for Medicare before Jan 1, 2020) and the Supplement 1A Plan.
• Minnesota – has two Medigap policies available: the Basic Plan and the Extended Basic Plan.
• Wisconsin – only has one Medigap plan available, though there are plans known as “50% and 25% Cost-sharing Plans” as well as a high-deductible plan that are available.

How do Medicare Supplement Plans Work?

Medicare Supplement Insurance works as a secondary insurance to Original Medicare. This means that when you use your Original Medicare coverage, Medicare pays first, and your Medicare Supplement plan pays second. Any costs left afterwards will need to be paid out-of-pocket.

Since Medicare Supplement plans act as a secondary insurance to Original Medicare, you will need to be enrolled in both Medicare Part A and Medicare Part B before enrolling in a Medicare Supplement plan. Because Medicare Supplement plans haven’t included drug coverage since 2005, you can enroll in a standalone Medicare Part D Prescription Drug plan in addition to having a Medicare Supplement plan.

Medicare Supplement plans differ from other Medicare plans (such as Medicare Advantage plans) because if you wait to sign up for coverage, you may be unable to enroll due to pre-existing health conditions or medications. When you first become eligible for Medicare Supplement Insurance, you can enroll in any available Medicare Supplement plan without undergoing medical underwriting. However, if you miss this window, you may not be able to buy a Medicare Supplement policy, or it may cost more. This is why it’s essential to understand Medicare Supplement Enrollment Periods.

Like Original Medicare, Medicare Supplement plans only cover one person. If you and your spouse both want the coverage provided by a Medigap plan, you will both need to individually enroll in a plan. Once enrolled, your Medicare Supplement plan is guaranteed renewable. This means your policy will automatically renew each year as long as you continue to pay your premium, even if you have increased healthcare needs.

Some individuals may find that their Medicare Supplement plan no longer meets their healthcare needs. Even though plans automatically renew each year, you can still choose to change your coverage during an appropriate enrollment period. For example, you may choose to drop your Medicare Supplement plan and enroll in a Medicare Advantage plan.

What is Medigap Coverage Used For?

Medigap (Medicare Supplement) plans provide coverage for some of the costs left behind by Original Medicare. When you have a Medicare Supplement policy, you will pay less out-of-pocket costs when using your Medicare Part A or Medicare Part B benefits.

Medigap plans can help cover your Original Medicare costs including:

• Copayments
• Deductibles
• Coinsurance

Each Medicare Supplement plan will provide different coverages and benefits. Refer to the chart below to see what is covered by each plan. As mentioned above, Medicare Supplement plans are standardized, which means plans will offer the same benefits regardless of which carrier you get your plan through. For example, Medicare Supplement Plan A will offer the same coverage and benefits whether you get your plan through Cigna, Humana, or any other insurance company.

Medicare Supplement Insurance does not typically cover services that are not covered by Original Medicare. Services that are not covered by Medigap plans include vision care, dental care, vision care, and long-term care.

Foreign Travel Emergency Coverage

Though Medicare Supplement plans generally don’t cover services that aren’t covered by Original Medicare, some plans do offer emergency coverage when traveling outside of the U.S. If you are a frequent traveler and are interested in getting coverage for emergency care while traveling abroad, here’s a few things you should know:

• Medicare Supplement plans that cover emergency care when traveling abroad have a lifetime limit of $50,000.
• You can use this coverage if your emergency care begins within 60 days of your trip.
• After meeting a $257 annual deductible, your plan will cover 80% of your billed charges for certain medically necessary emergency care outside of the U.S.

*Medicare supplement plans C, F, and High-deductible F are only available to those who were eligible for Medicare prior to 2020.

In addition to the lettered plans above, there is also another type of Medicare Supplement plan called Medicare SELECT, which is available in some states. Medicare SELECT is an outlier among Medicare Supplement plans, as it requires you to use hospitals and providers within the plan’s network. If you choose to enroll in a Medicare SELECT policy, you will have a period of 12 months in which you can switch to a standard Medigap policy if the Medicare SELECT plan does not meet your needs.

How Much Do Medicare Supplement Plans Cost?

Though Medicare Supplement plan benefits are standardized, the costs of plans will vary between carriers. When you enroll in a Medicare Supplement plan, you will be responsible for paying a monthly premium for your plan in addition to your Medicare Part B premium. Several factors influence the monthly premium cost of Medicare Supplement plans. These factors can include your age, your gender, your location, whether you use tobacco products, and more.

For example, Susanne is a 65-year-old woman living in Tampa, FL. Her monthly premium for Medicare Supplement Plan A is $135. Her neighbor Bob is a 75-year-old man, however his monthly premium for Medicare Supplement Plan A (from the same carrier) is $156. Though these two individuals live in the same area and signed up for Plan A under the same carrier, Bob’s premium is higher due to his age.

Medigap Eligibility And Enrollment

Understanding Medicare Supplement eligibility and enrollment is essential for making sure you get the coverage you need. Before signing up for a Medicare Supplement plan, you must first be eligible. Medigap eligibility requirements are:

• You must have both parts of Original Medicare (Medicare Part A and Medicare Part B).
• The plan you want must be available in your area.
• You may need to be able to pass medical underwriting (situational)*

*Your health, including pre-existing conditions and medications are not a factor in your Medigap eligibility if you apply for a Medicare Supplement plan during your Medicare Supplement Open Enrollment Period or if you qualify for guaranteed-issue rights.

Medicare Supplement plans are unique among Medicare plans because you can apply for a Medicare Supplement plan at any time. However, it is very important to understand that if you sign up for a Medigap plan outside of your Medicare Supplement Open Enrollment Period, you may be subject to medical underwriting. A carrier can then decide to deny you coverage or charge you a higher premium based on your pre-existing conditions or medications.

There are special situations in which you will qualify for guaranteed-issue rights. These rights permit you to enroll in any Medicare Supplement plan of your choice (that’s available in your area) without undergoing medical underwriting. You can learn more about the different Medicare Supplement enrollment periods by checking out our links below.

If you have questions about how Medicare Supplement plans work, or whether you qualify for guaranteed-issue rights, give us a call at the number above. Our team of licensed agents can help answer your questions and help you determine whether a Medigap plan would work for you.

Sources

Get Medigap Basics, Medicare.gov. Accessed December 2023

https://www.medicare.gov/health-drug-plans/medigap/basics

Medigap (Medicare Supplement Health Insurance), Centers for Medicare and Medicaid Services. Accessed December 2023

https://www.cms.gov/medicare/health-drug-plans/medigap