Medicare Supplement (Medigap) Plans

What Do Medicare Supplement Plans Cover?

Medicare Supplement Plans cover various costs that Original Medicare does not fully cover, such as:

• Part A coinsurance and hospital costs
• Part B coinsurance or copayments
• Blood (first 3 pints)
• Part A hospice care coinsurance or copayments
• Skilled nursing facility coinsurance
• Part A and Part B deductibles (with certain plans and restrictions)
• Foreign travel emergency coverage (up to plan limits)

Medicare Supplement Plans do not cover prescription drugs, which would require separate Part D coverage. They also typically do not cover vision, dental, hearing aids, or long-term care.

How Much Do Medicare Supplement Plans Cost?

Medigap plan premiums are set by insurance companies using three different pricing methods that determine how your premiums are calculated and whether they’ll increase as you get older:

1. Community Rated

Premiums are the same for everyone who has the same Medigap policy, regardless of age. While premiums do not increase with age, they may rise due to other factors, such as inflation or increases in healthcare costs.

• Pros:

    Offers predictable premiums without age-related increases, which is beneficial for long-term budgeting.

• Cons:

    Community-rated premiums may initially be higher than other pricing methods for younger enrollees.

2. Issue-Age Rated

Premiums are based on the age when you purchase the policy. Hence, younger enrollees pay lower premiums, while older enrollees pay more if they buy at an older age. However, premiums do not increase with age after enrollment, but may still rise due to inflation or healthcare cost increases.

• Pros:

    Premiums remain stable over time, and enrolling at a younger age results in long-term savings.

• Cons:

    Late enrollees may face high initial premiums, and switching plans later may be costly.

3. Attained-Age Rated

Premiums are based on your current age and will increase as you get older. Premiums are initially lower for younger enrollees, but they increase annually or at specified intervals as you get older, and may also go up due to inflation or healthcare cost adjustments.

• Pros:

    Typically offers the lowest starting premiums, which may appeal to younger enrollees.

• Cons:

    Premiums rise over time, potentially resulting in significantly higher costs as you age.

On average, premiums can range from $50 to over $300 per month depending on the plan and individual circumstances.

Who Is Eligible for Medicare Supplement Plans?

Eligibility for Medicare Supplement Plans typically requires:

• Enrollment in both Medicare Part A and Part B.
• Being 65 or older (in most states), although some states allow people under 65 with disabilities to enroll.

When Should You Enroll in a Medicare Supplement Plan?

The best time to sign up for a Medicare Supplement Plan is during your Medigap Open Enrollment Period, which lasts for six months and begins the month you turn 65 and are enrolled in Part B. During this period, you have guaranteed issue rights, meaning insurers cannot deny you coverage or charge higher premiums due to health conditions. Outside of this period, you may be subject to medical underwriting.

What Are the Different Types of Medicare Supplement Plans?

Below is a table listing the ten standardized Medicare Supplement Plans (A through N) and the benefits they provide:

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How Can You Compare and Choose the Right Medicare Supplement Plan?

When comparing Medicare Supplement Plans, consider:

• Coverage Needs: Assess which out-of-pocket expenses you'd like coverage for. Plans F, G, and N tend to offer the most comprehensive benefits.
• Budget: Premiums vary by plan type, insurance provider, and location.
• Provider Network: Medigap plans do not restrict you to a specific network, so they can be used with any provider that accepts Medicare.
• Availability: Not all plans are available in every state, and some benefits are standardized differently in states like Massachusetts, Minnesota, and Wisconsin.

Choosing the right Medigap plan involves comparing coverage options, costs, and features to fit your healthcare needs and financial situation. Consider speaking with a licensed insurance agent or Medicare counselor for personalized advice.

Is Medicare Supplement Insurance (Medigap) Right for You?

Whether you need Medicare Supplement Insurance (Medigap) depends on your health care needs, budget, and risk tolerance. Medigap is designed to cover “gaps” in Original Medicare, such as copayments, coinsurance, and deductibles, which can lead to significant out-of-pocket expenses.

If you have other coverage like Medicaid or employer-sponsored insurance, a Medigap policy may be unnecessary. Also, if you are generally healthy and have a higher risk tolerance, you may be comfortable with Original Medicare alone, accepting the possibility of higher out-of-pocket costs.

Medicare Supplement Insurance is most valuable if you want financial protection against high out-of-pocket expenses and flexibility in choosing any Medicare-approved provider. However, if you are looking for additional benefits (like vision or dental), prefer lower premiums, and do not mind network restrictions, a Medicare Advantage plan may be a better fit. Evaluate your health care needs, financial situation, and the importance of provider flexibility to decide if Medigap is right for you.

Want to learn more about Medicare Advantage?

Explore Medicare Advantage

For more detailed information and personalized advice, speak to a licensed insurance agent.