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What Is a Medicare Supplement Plan?

Discussing Medicare Prescription Drug Plan

Medicare Supplement Plan – When you enroll in Medicare, you’ll have to decide how you want to supplement your benefits from Parts A and B. One way to do this is with a Medicare supplement plan.

This article will help you learn the ins and outs of Medicare supplements so you’ll be able to decide if this Medicare option is the right one for you. You’ll learn how Medicare supplements work, what they cover, who is eligible, and how much they cost. Let’s jump in!

What is a Medicare supplement insurance plan?

A Medicare supplement plan is one way to “supplement” your benefits under Original Medicare. If you only have Parts A and B, you’ll be left with quite a few out-of-pocket costs to pay. A supplement is a great way to reduce your medical expenses. You might also hear these plans referred to as Medigap plans. This name is also easy to remember because these plans fill in the “gaps” left by Original Medicare.

There are ten Medigap plans available today, plus two high-deductible options. Each plan is assigned a letter, which is how you’ll tell them apart. The ten Medicare supplements include Plans A, B, C, D, F, G, K, L, M, and N. You can also get a high-deductible Plan F or high-deductible Plan G.

Medicare supplement plans are standardized, which means that each letter plan has the same benefits, no matter which private insurance company sells it. For example, plan N with Company X is the same as Plan N with Company Y. The only thing the insurance company is allowed to control is how much they charge in premiums. In addition, the coverage and benefits found in a Medigap plan will not change from one year to the next.

How do Medicare supplements work?

Medicare supplement insurance plans work as your secondary coverage, with Original Medicare (Parts A and B) as your primary coverage. After Original Medicare pays a claim, it is sent to your Medicare supplement plan. The amount your Medigap policy pays will depend on which of the letter plans you have.

You can use your supplement plan with any healthcare provider who accepts Original Medicare. There are no networks for Medigap plans, no matter who your insurance company is. As long as your doctor accepts Medicare, they’ll accept your Medigap plan. This feature gives members the freedom to choose from nearly any provider since more than 96% of providers accept Medicare. In addition, it’s easy to travel with these plans. You won’t have to find in-network doctors or get permission from your insurance company to seek care while traveling.

Once you enroll in a Medicare supplement plan, you can stay on the plan as long as you pay your premiums. It will continue to renew each year automatically, and you cannot be disenrolled, regardless of your health status.

What do Medicare supplements cover?

We said that Medicare supplement insurance covers leftover expenses from Original Medicare. But what exactly does that include? The full list of possibilities includes:

  • Part A deductible ($1,556 in 2022)
  • Part A coinsurance and hospital costs with an additional 365 days after Original Medicare’s benefits are exhausted
  • Part A hospice care coinsurance
  • Skilled nursing facility care coinsurance
  • Part B deductible ($233 in 2022)
  • Part B coinsurance and copayments
  • Part B excess charges
  • First three pints of blood
  • 80% of a foreign travel emergency (up to plan limits)

How much of that list your Medigap plan covers depends on which of the ten policies you choose. Plan F, for example, takes care of every single one of those costs, leaving members with virtually no out-of-pocket expenses. Plan G covers everything except the Part B deductible. Plan N covers everything except the Part B deductible, Part B excess charges, and some office copays.

What don’t Medicare supplements cover?

Medicare supplement plans will not cover anything that was not approved for coverage under Parts A or B. Let’s discuss some of the most important things that aren’t included.

First, is prescription drug coverage. If you choose to enroll in Medigap, you’ll need to enroll in a Part D prescription drug plan. Failure to do so will result in penalties when you enroll later, which is one reason why you should choose a Part D plan even if you are not currently taking medications.

Caucasian male doctor writing prescription on notebook to senior woman working on a Prescription drug plan.
If you choose to enroll in Medigap, you’ll need to enroll in a Part D prescription drug plan.

Second, preventive and restorative dental care, vision care, and hearing services are not included in Medicare supplement insurance. You can find individual policies for each or enroll in a DVH (dental, vision, hearing) plan to cover all three.

When can I enroll in Medicare supplement insurance?

You can enroll in a Medicare supplement as long as you are enrolled in Parts A and B of Medicare. During your Initial Enrollment Period (IEP), you’ll be able to choose any of the ten plans without having to pass medical underwriting. No insurance company can deny you based on your health history.

Outside of your IEP, you may need to undergo medical underwriting to be granted access to a Medigap policy. There are certain instances when you may qualify for a Special Enrollment Period (SEP) that would allow you limited access to one of these plans.

In addition, you can change or enroll in a Medicare supplement at any time of the year. There are no specific enrollment periods that apply to Medigap plans like there are with both Medicare Advantage and Part D plans.

How much do Medicare supplements cost?

The cost for a Medicare supplement plan depends on which letter plan you choose. The more coverage, the higher your premiums. It will also depend on your age, gender, tobacco use, and where you live. Also, insurance companies get to set their own rates, so you may find some companies will offer you lower plans than others.

Keep in mind that Medicare supplements tend to increase as we age, so you’ll probably pay a little more each year you have the plan.

If you’d like to learn more about Medicare supplement insurance, speak with one of our licensed insurance agents. We have Medicare advisors who specialize in these products, and they are sure to find a plan that works great for you.

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