Happy senior with knowledge of Medicare supplement insurance

What is Medicare supplement insurance?

Medicare Supplement – A Medicare supplement is one of the first things you should learn about when nearing your Medicare enrollment. These plans are a great way to reduce your medical expenses during your golden years, so you can worry about your finances less and your happiness more.

But what exactly is a Medicare supplement plan? In this article, we will answer that question and many more. By the end, you’ll know how Medicare supplements work, what medical expenses they cover, who can enroll, and how much you’ll pay for one of these plans. Ready? Let’s jump in.

What is a Medicare supplement?

You’ll hear Medicare supplements referred to as either supplements or Medigap plans. They are available to Medicare beneficiaries who want to save money on their healthcare expenses. Since Part A and B of Original Medicare don’t pay for services at 100%, a Medicare supplement is there to pick up some or all of the remaining costs.

There are about ten Medigap plans to choose from, and they are available through a large number of private insurance companies. They’re named by a letter of the alphabet and currently include Plans A, B, C, D, F, G, K, L, M, and N. In addition, Plans F and G have high-deductible options. Medigap plans are federally standardized, which means that if you enroll in Plan G, for instance, it will be the same regardless of which insurance company you choose.

How do Medicare supplements work?

Medicare supplements act as your secondary form of insurance, with Original Medicare as your primary payor. Whatever is not paid by Parts A or B is then sent to your supplement insurance carrier. The amount they’ll pay depends on which of the letter plans you enrolled in.

Medicare supplements do not use provider networks. That means that as long as your provider accepts Medicare assignment (which over 96% of them do), they will also accept your Medigap plan. This allows you more freedom to choose providers and is helpful if you’re a frequent traveler. No matter where you’re at in the U.S., you’ll be able to find a doctor who takes your Medicare supplement.

What do Medicare supplements cover?

Generally speaking, a Medicare supplement will cover anything that Original Medicare also covers. If it’s not included in your Part A or B benefits, it would be included in your supplement benefits. How much coverage you’ll have depends on which of the letter plans you choose.

If you’ve started looking at what Medicare pays for, you’ll see that it has great coverage, but there are quite a few out-of-pocket costs. For example, there are deductibles for both Part A and B, copayments, and coinsurance costs. Plus, there is no out-of-pocket maximum in Original Medicare, which means there is no limit on what you could have to pay in a given year.

These are the expenses you’ll be responsible for under Parts A and B:

  • Part A deductible ($1556 in 2022)
  • Part A hospice care coinsurance
  • Part A coinsurance and hospital costs, plus an additional 365 days after your Part A benefits are exhausted
  • Skilled nursing facility care coinsurance
  • Part B deductible ($233 in 2022)
  • Part B coinsurance and copayments
  • Part B excess charges
  • The first three pints of blood, if the procedure is Medicare-approved
  • 80% of foreign travel emergencies

A Medicare supplement comparison chart is a great tool to help you see what each letter plan will cover. For example, Plan G covers all of these costs except for the Part B deductible.

Close photo of Medicare beneficiary with glasses in the office disappointed with Medicare supplements not cover on a prescription drug plan.
Let’s look at some of the more common things not included in a Medigap plan.

What do Medicare supplements not cover?

We’ve already said that if Original Medicare doesn’t cover a service, it won’t be covered by your supplement. Medicare must deem the procedure as medically necessary in order to approve coverage. Let’s look at some of the more common things not included in a Medigap plan.

First, and most importantly, prescription drug coverage. You will need to enroll in s stand-alone Part D prescription drug plan, whether you are currently taking medications or not. If you don’t, you’ll wind up paying penalties later. In addition, you can only enroll in a Part D plan at certain times of the year. If you find out you need a prescription outside of that enrollment period, you’ll have no coverage options.

Second, you won’t find benefits for routine dental, vision, and hearing services. These are all areas of our health that are important to our overall health, so many people choose to enroll in either individual policies or an all-in-one DVH (dental, vision, hearing) plan. These can be very affordable and have no medical underwriting requirements.

Who can enroll in a Medicare supplement?

Anyone who is enrolled in Medicare Part A and B can apply for a Medicare supplement at any time during the year. There are no enrollment periods specific to Medigap policies. However, typically the best time to enroll is during your Initial Enrollment Period (IEP). During that time, you’ll have guaranteed issue rights to any Medigap plan you’d like.

If you qualify for a Special Enrollment Period (SEP), you may also have guaranteed issue rights for certain plans. Outside of those times, you’ll need to undergo medical underwriting to get one of these plans.

How much do Medicare supplement plans cost?

The biggest factor in your Medicare supplement premium is which of the ten plans you’re enrolled in. As you may suspect, you’ll pay higher premiums for more coverage. For example, Plan G is usually more expensive than Plan N.

Your zip code, gender, age, and tobacco use also factor into your monthly premium. In addition, the insurance company is allowed to set their own rates. Our licensed insurance agents will look at plans from multiple companies to find the one that gives you the best deal.

If you’ve got more questions about Medicare supplements or want to learn about your other Medicare options, our Medicare advisors are here to help. We’ll guide you through the process of choosing a plan, submit your application, and be here year-round to offer customer support. Contact us today to schedule a visit with one of our Medicare experts.

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