Medicare Supplement Plans(Medigap)

How Does Medicare Supplement Plan Work?

Medicare Supplement plans, or Medigap, are insurance policies sold by private insurance companies licensed to sell Medicare plans. They help you pay for out-of-pocket costs for services covered under Medicare Part A and Part B. These include deductibles, coinsurance, copayments, hospital costs after Medicare pays its share, skilled nursing facility costs, and more. Some Medicare Supplement insurance plans even include coverage for medical services while traveling outside the United States.

Which Medicare Supplement Plan Should I Choose?

Some Medicare beneficiaries want a plan that covers everything, so they don’t have to worry about out-of-pocket expenses. Others simply want some of their deductibles and copays paid for but are primarily worried about low premiums. Ultimately, the choice is up to you.

Which Supplement Plan Has the Highest Coverage?

Medicare Supplemental Plan F has the highest level of coverage. It pays for all your cost-sharing on covered services so you have no out-of-pocket expenses. However, Plan F is being phased out by Medicare, and anybody who becomes eligible for Medicare after 2020 will not be able to purchase Plan F.

Medicare Supplemental Plan G is the second-best in terms of coverage. The only thing not covered is that you still pay the Part B deductible once per year. This keeps your Medigap premium lower and, in turn, may save some beneficiaries some money in the long run.

When Can I Enroll in Supplement Plan?

Once you have Medicare Part B, you have six months to enroll in a Medicare Supplement plan with no health questions. This is a one-time open enrollment in which you cannot be turned down for any health conditions, be asked any medical questions, and not be charged an additional premium for health reasons.

However, once this one-time enrollment is over, insurance companies can refuse you based on your health.

This is why open enrollment is a necessary time to remember.

Medigap Plan Types

As already established, there are 10 standardized policies, and each letter provides a different level of coverage. Your coverage options in general, are:

Medigap Plan A

Plan A offers coverage for hospitalization, hospice care coinsurance, some Medicare Part B expenses, and coverage for the first three pints of blood per year. It is the most affordable and least comprehensive among all the Medigap plans. It is suitable for individuals who prioritize a low monthly premium and are not overly concerned about hospital costs. On average, the cost of this plan ranges from $110 to $180 per month, although it may be higher in states with a high cost of living. It is important to note that this plan is not recommended for individuals who plan to travel outside of the United States.

Medigap Plan B

Plan B covers expenses not included in Original Medicare, such as out-of-pocket expenses for Part B, coinsurance for preventive care, the first three pints of blood, out-of-pocket expenses for hospital care, and copayments/coinsurances for hospice care under Part A. It may be a suitable choice for individuals who have good health, do not travel outside of the United States, and seek to reduce their premium costs. On average, the monthly premium ranges from $110 to $210.

Medigap Plan C

Plan C is a popular option that provides coverage for most expenses not covered by Original Medicare, with the exception of Part B excess charges. It includes benefits for doctor and hospital visits, foreign travel, and more. The average monthly premium for this plan ranges from $140 to $420. Plan C may be the most suitable choice for individuals who have frequent hospital visits, travel internationally, and can afford a higher monthly premium. The cost may be higher in states with a high cost of living. Plan F offers more comprehensive coverage than any other plan, but it is not available to new Medicare beneficiaries who were not eligible prior to January 1, 2020.

Medigap Plan D

This plan provides a satisfactory level of coverage for a moderate premium, usually ranging from $120 to $200 per month. It includes expenses for hospital and hospice care, Medicare Part A deductible, Part B coinsurance, and copayment, coinsurance for skilled nursing facility care, and emergency medical care when traveling abroad. Nonetheless, it does not cover Part B deductible and excess charges, dental, vision, hearing care, or prescription drugs. The premium for Plan D may fluctuate depending on the cost of living in a specific state.

Medigap Plan F

The most comprehensive plan available to Medicare enrollees who enrolled before January 1, 2020, offers extensive coverage across a range of costs. This plan includes coverage for the Part A deductible, coinsurance, and costs associated with hospital and hospice care. Additionally, it covers the Part B deductible and coinsurance, SNF care coinsurance, three pints of blood annually, and emergency healthcare for up to 60 days while abroad. However, this plan does not cover prescription drugs, dental, vision, hearing care, or cosmetic procedures. The average monthly premium for Medigap Plan F ranges from $150-$400, with higher premiums in states with a higher cost of living.

Medigap Plan G

Plan G is the second most comprehensive Medicare supplement plan, offering coverage for a wide range of costs and helping to reduce out-of-pocket expenses. Although it does not cover as much as Plan F, it does provide coverage for the Part A deductible and coinsurance associated with hospital and hospice care, Part B coinsurance and copayments, the first three pints of blood annually, 80% of foreign travel exchange costs, and SNF care. However, it does not cover the Part B deductible, dental, vision, and hearing care, or cosmetic procedures. Plan G is a suitable option for new Medicare beneficiaries and is considered one of the best choices for all Medicare beneficiaries. The average monthly premium for this plan ranges from $100-$300.

Medigap Plan K

Plan K is a cost-sharing Medicare supplement plan that features a lower monthly premium but provides coverage for only 50% of the costs. It is one of two plans that have a maximum out-of-pocket limit. Plan K covers 50% of the Part A coinsurance, hospice coinsurance and deductible, 50% of the Part B coinsurance and copayments, 50% of the first three pints of blood each year, and 50% of the SNF care coinsurance. Once the out-of-pocket limit of $6940 is reached in 2023, Plan K will cover the remaining costs. The average monthly premium for Plan K ranges from $40-$100.

Medigap Plan L

Plan L is another Medicare supplement plan that includes a maximum out-of-pocket limit but covers only 75% of the costs instead of full coverage. It covers 75% of the Part A coinsurance, hospice coinsurance and deductible, 75% of the Part B coinsurance and copayments, 75% of the first three pints of blood each year, and 75% of the SNF care coinsurance. Once the out-of-pocket limit of $3470 is reached in 2023, Plan L will cover the remaining costs. The average monthly premium for Plan L ranges from $100-$200.

Medigap Plan M

Plan M has low monthly premiums and is ideal for individuals not worried about out-of-pocket expenses. It provides coverage for coinsurance, copayments, deductibles, and certain foreign travel costs. However, it does not cover Part B deductibles or excess charges. On average, the monthly premium falls from $120 to $200.

Medigap Plan N

Plan N is well-liked because of its lower premiums compared to Plans F and G, as well as its extensive coverage of medical expenses. It covers deductibles, coinsurance, copayments, and certain foreign travel expenses, but it does not cover the Part B deductible or excess charges. On average, the monthly premium for this plan falls within the range of $120 to $180.