Medicare Supplements, also known as Medigap, are insurance plans that help fill “gaps” in Original Medicare.
Original Medicare pays for much, but not all, of the cost for covered health care services and supplies.
There are leftover costs like:
- Copayments
- Coinsurance
- Deductibles
A Medicare Supplement can help pay for some of those remaining costs for you. Some Medigap policies also cover medical care when you travel outside the U.S.
Medigap plans are standardized, meaning they have the same coverage no matter which company you buy them from. The only difference there will ever be is price.
How Medicare Supplements work
When you receive Medicare-related healthcare with a Medicare Supplement, your doctor will bill Medicare for the services rendered. Then, Medicare pays its portion of the bill. After that, the remainder will go to your Medigap policy provider and it pays out based on the plan you chose.
If anything is left, you are responsible for the remainder of the bill.
What Medicare Supplements cover
There are 10 lettered plans, A-N, that each cover a different percentage of the cost-sharing responsibilities associated with your Medicare-related healthcare coverage.
Each will cover a different percentage of the following:
- Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used up
- Part B coinsurance or copayment
- Blood (first 3 pints)
- Part A hospice care coinsurance or copayment
- Skilled nursing facility care coinsurance
- Part A deductible
- Part B deductible*
- Part B excess charge
- Foreign travel exchange (up to plan limits)
*As of January 1, 2020, Medigap plans sold to new people with Medicare aren’t allowed to cover the Part B deductible. Because of this, Plans C and F are not available to people new to Medicare starting on January 1, 2020.
When can I buy a Medigap policy?
The best time to buy a Medigap policy is during your six-month Medigap Open Enrollment Period. During this time you can buy a Medigap policy even if you have health problems. This period automatically starts the month you’re 65 and enrolled in Medicare Part B.
After your Medigap Open Enrollment Period, you may still be able to enroll in a policy but you will be subject to medical underwriting.