Medicare Supplement insurance, also called Medigap, may help pay some of the costs left behind by Original Medicare. It is private insurance designed to work alongside Medicare Part A and Part B.
For many people new to Medicare, this is an important distinction. Original Medicare generally pays a large share of covered medical costs, but it does not pay everything. You may still have deductibles, coinsurance, and copayments. A Medicare Supplement plan can help with certain remaining costs, depending on the plan you choose.
Understanding what Medigap covers can make it easier to compare your Medicare choices and decide whether a supplement may fit your needs.
How does Medicare Supplement insurance work?
Medicare Supplement plans work with Original Medicare, which includes Part A for hospital care and Part B for medical and outpatient care.
When you receive a Medicare-covered service, Original Medicare generally pays its approved share first. Your Medicare Supplement plan may then pay some or all of the remaining approved costs, based on your plan’s benefits.
For example, Medicare Part B generally pays 80% of the Medicare-approved amount for many covered doctor visits, outpatient services, and medical equipment after you meet the Part B deductible. Without supplemental coverage, you may be responsible for the remaining 20%. Many Medicare Supplement plans can help pay that Part B coinsurance.
You must remain enrolled in Medicare Part A and Part B to have a Medicare Supplement plan. You also continue paying your Part B premium, along with the separate premium for your Medigap policy.
What costs can Medigap plans help cover?
Medicare Supplement benefits are standardized in most states. This means a Plan G from one insurance company generally has the same basic medical benefits as a Plan G from another company. Premiums, customer service, household discounts, and availability may vary by carrier and state.
Depending on the plan letter, a Medicare Supplement policy may help cover these costs:
- Part A hospital coinsurance: This can include hospital costs after Original Medicare benefits are used.
- Part B coinsurance or copayments: This often includes the share you would otherwise pay for many doctor and outpatient services.
- Blood: Medigap plans may help pay for the first units of blood needed for a covered medical treatment.
- Part A hospice coinsurance or copayments: A supplement may help with certain cost-sharing for hospice care.
- Skilled nursing facility coinsurance: Some plans may help with the daily coinsurance for covered skilled nursing facility care.
- Part A deductible: Many Medigap plans can help pay this hospital deductible.
- Part B deductible: Only certain older plans cover this deductible. People who became eligible for Medicare on or after January 1, 2020 generally cannot buy those plans.
- Part B excess charges: Some plans may cover these charges when a provider is allowed to bill more than Medicare’s approved amount.
- Foreign travel emergency care: Several plans may provide limited emergency coverage outside the United States, subject to plan rules and limits.
The exact benefits depend on the plan. Plan G, for example, is a popular option because it generally covers most Medicare-approved cost-sharing after you pay the Part B deductible. Plan N may have a lower premium in some areas, but it can involve certain copayments and may not cover Part B excess charges.
What does Medicare Supplement insurance not cover?
Medicare Supplement insurance helps with gaps in Medicare-covered services. It does not turn non-covered services into covered services.
Most Medicare Supplement plans generally do not cover:
- Prescription drugs you pick up at a pharmacy
- Routine dental care, dentures, or most routine vision care
- Routine hearing exams or hearing aids
- Long-term custodial care, such as help with bathing or dressing over an extended period
- Private-duty nursing
- Routine care outside the United States, except for limited foreign travel emergency benefits on certain plans
If you choose Original Medicare with a Medicare Supplement plan, you may also want to consider a separate Medicare Part D prescription drug plan. Part D is the part of Medicare that helps cover outpatient prescription medications.
For dental, vision, and hearing needs, some people choose separate insurance or pay for care directly. Available options and benefits can vary by location and plan.
Does Medigap cover every doctor and hospital?
In most cases, a Medicare Supplement plan gives you broad access to doctors and hospitals that accept Medicare. There are generally no provider networks with a standard Medigap plan, so you may be able to see Medicare-participating providers anywhere in the United States.
This can be appealing for people who travel, live in more than one state during the year, or want flexibility when choosing specialists.
There is one important exception: a Medicare SELECT plan may use a network for certain inpatient hospital services. Medicare SELECT plans can still provide standardized Medigap benefits, but you may need to use network hospitals for the highest level of coverage in non-emergency situations.
Can you have Medicare Supplement and Medicare Advantage?
No. You generally cannot use a Medicare Supplement policy with a Medicare Advantage plan at the same time.
Medicare Advantage is another way to receive your Medicare benefits through a private insurance company. These plans often include provider networks and may include extra benefits such as dental, vision, hearing, or prescription drug coverage. Costs and provider rules can vary by plan.
Medigap works differently. It is paired with Original Medicare and is focused on helping with Medicare’s deductibles, coinsurance, and other approved cost-sharing. Neither choice is automatically right for everyone. Your doctors, travel habits, medications, budget, and comfort with provider networks may all matter.
When can you buy a Medicare Supplement plan?
Your best opportunity to buy a Medicare Supplement plan is often your six-month Medigap Open Enrollment Period. This period starts when you are age 65 or older and enrolled in Medicare Part B.
During this window, insurance companies generally must let you buy any Medigap plan sold in your state, regardless of health conditions. After that period, you may be asked health questions in many states, and acceptance is not guaranteed unless you qualify for a special guaranteed-issue right.
Because rules can vary by state, it may help to review your options before your Part B coverage begins.
Is Medicare Supplement coverage worth considering?
A Medicare Supplement plan may be worth considering if you prefer predictable help with Original Medicare cost-sharing and want broad access to Medicare-participating providers. It may be especially useful for people who expect regular medical care, want to limit unexpected out-of-pocket costs, or travel frequently within the United States.
The right choice depends on your personal situation, the plan options available where you live, and the premiums offered by each carrier. Eric can help you review Medicare Supplement plans in your area and answer your questions with free, no-pressure guidance.