Complete Guide to Medigap Plans and Coverage, 8 Things You Want to Know in 2024.

Greg Wilson

Updated on:

Complete Guide to Medigap Plans and Coverage

    Medicare supplement insurance plans are the gap insurance policies that are not sold by the government but by private insurance carriers, and state insurance regulators regulate these plans. A Medicare supplement plan helps you pay some part of your own traditional Medicare (both A & B), which includes coinsurance, copayments, and deductibles. In most states, plans consist of 10 letters (A-N) are there. Every plan is providing separate coverage.

    To understand these insurance plans and how it works and in what manners it saves you from large medical bills, there is also a need for you to understand its mechanism of working and affects the Medicare benefits. There is a simple chart that explains Medigap plan coverage most appropriately.

    Fast Facts About Medigap Policies

    Every plan has its primary benefits, like a Plan A policy sold in California by one company will have similar services compared to a Plan A sold in Florida by a different company. These plans usually have identical coverage at the primary level, including Medicare (A & B) coinsurance coverage, blood testing, and other hospital perks. In many areas, you can buy a different supplement policy that is known as Medicare SELECT. All these policies usually follow a standard of regular Medigap plans. There is only one difference here: the provider needs you to utilize their network providers. This is how you save on the monthly premium.

    Expenses Covered by Part A:

    •  Hospital stays: These plans provide the coinsurance amount on hospital costs, to about an extra one year after your hospital benefits related to Medicare are finished.
    •  Hospice care: Medigap plans cover up to 50-100% of all of your coinsurance and copayments for Part A hospice care expenditures, as per the option of the place you decide.

     Medicare Part A deductible: Plan A usually does not cover all the deductible.

    Expenses Covered by Part B:

    •  Coinsurance or Copayment: They cover up to 50-100% of Part B expenditure amounts (depending on the plan).
    •  Medicare Part B deductible: The two Plans (C & F) cover the deductibles; thus, these are the most famous plans.
    •  Part B excess charges: Whenever a healthcare provider doesn't accept an assignment, they can charge up to 15% more; that's when Part B extra coverage is needed.

    Foreign Travel Coverage

    Medicare coverage is available in the US only. That is the only reason that some of the Medigap plans provide coverage for foreign travel emergencies.

    Blood Coverage

    Your own Medicare plan will pay for blood after you've run out of the third pint. Most of the hospitals get blood at no cost. But, if a hospital has to buy any additional blood for you, you have to pay out of pocket. Most Medicare supplement plans cover 100% of the expense of the first 3 pints of blood.

    Nursing Coverage

    These are healthcare facilities providing short-term or maybe long-term care for individuals with a critical condition they can't manage at home. While coinsurance for skilled nursing care is not covered by Plans A or B, all other plans cover 50 to 100 percent of these costs.

    Medicare Supplement plans do not cover:

    The following services are not covered by your Original Medicare or Medigap coverage:

    • Long-term hospital care
    • Private-duty nursing care
    • Hearing-aids
    • Vision-related issues
    • Usual dental care 

    How does Medigap and Medicare work together?

    Medigap is designed to work with your Original Medicare benefits. Medicare plans pay a portion of it. The most important thing is that if your Medicare cannot cover any service, your Medigap plan cannot cover it. Foreign travel healthcare coverage is the only exception to this rule.

    Protection from Medical Bills

    The reason to purchase supplemental Medicare plans is protection from sizeable medical care bills due during sickness or other medical emergencies. For example, if you have an accident and have to be carried to the Hospital by ambulance service and be admitted into the hospital, this process uses both Medicare Part A and Medicare Part B coverage.

    Eligibility for Medicare Supplement Insurance:

    Private companies sell this health insurance to cover the missing parts (or gaps) in your Original Medicare. All of this supplements your regular Medicare coverage (A & B). Therefore, you need to qualify for both Parts (A & B) to be eligible for supplemental coverage. Your age is also one of the qualifying factors.

    Medigap Plans for disabled persons:

    If you have any disability and qualify for Medicare benefits for this, you can also buy Medicare supplement insurance. Every State has a specific board of insurance regulating the purchase and sale of these insurance policies. Federal law has also established a national Medicare policy.

    Medigap vs. Medicare Advantage

    While purchasing a Medicare plan, most people need to know the difference between Medicare supplements and Medicare Advantage plans. These are very different things; however, they both protect you from the high cost of illness or hospitalization charges. These are some prominent differences:

    • Medicare Advantage plan replaces your Original Medicare. 
    • Medicare Supplement insurance covers the remaining things in your Medicare coverage and compliments it. You'll want to have this coverage for prescriptions, hearing, and vision.

    Another primary difference is that you usually pay out of pocket in advance with a Medicare supplement, even without any medical services. But with Medicare Advantage, you only pay at the point of service. Sometimes these are not compatible with each other. You might be eligible to purchase a Medicare Advantage Plan and in some cases, can still get enrolled in a Medigap plan.

    You can also buy a supplemental policy when:

    • You cancel your Medicare Advantage plan.
    • You have to leave a health plan due to being misled or someone broke the rules.
    • Stoppage of services by your own Medicare Advantage plan in your area

    Medigap vs Medicaid:

    Medicare and Medicaid benefits are not usually the same. Therefore, receiving Medicaid does not make you eligible for having a Medigap plan. But, if you are qualified for both, there is no reason to have a Supplemental policy. Medicaid covers the gaps in regular Medicare for beneficiaries who are eligible for both.

    Changing supplement plans:

    Follow these steps to change your supplemental plan if you need to do so:

    • Contact the new insurance company selling you the policy and complete the application with the new company.
    • If they accept your application, contact your current or previous company and inquire how to cancel coverage with them.

    Cost of Medicare Supplement Plans

    The cost of the plan is pretty essential when comparing Medicare supplemental plans. Payments are dependent on the program that you choose as well as the new insurance company. 

    Pros and Cons of Medicare Plans:

    Following are the reasons that people purchase it:

    • Freedom – in choosing healthcare providers
    • Better coverage (for both coinsurance and coinsurance)
    • Traveling coverage
    • Easy-to-understand

    Many carriers offer plans. It's essential to compare the programs before purchasing. Make sure that you are comparing apples to apples. 

    Prescriptions and Medigap Plan:

    You can obtain prescription drug coverage via Medicare in one of two ways:

    • Buy a Plan
    • Get enrolled in any Medicare Advantage Plan that covers both parts of that plan 

    Options other than Prescription Drug Coverage:

    Here are some alternatives:

    • Keep the insurance policy you have and also buy a Medicare plan that suits your needs. 
    • Cancel the Medigap plan and then receive coverage via the Medicare Advantage plan

    Saving money with a Medicare Supplement:

    The premiums of these supplement insurance policies are increasing continuously. These increases have changes brought about the Affordable Care Act. Consequently, people want to know how to save money when they purchase supplement plans.

    These policies cover the gaps in your Medicare policy. The rule is: if once you pay your deductible, Medicare has to cover up to 80% of the remaining charges.

    Choosing your plan:

    It's easy to save some money on coinsurance, and it's an intelligent choice. It's also essential to understand the expenses and benefits regarding the supplemental Medicare policy fully. The best plan is dependent on your budget and personal medical needs. You shouldn't get more insurance than you need, but it's not wise to risk your savings because you aren't adequately covered if you ever needed to be hospitalized. So do your homework and choose wisely.

    Standardized Medigap Benefits:

    By law, all Medicare insurance policies need to provide some primary benefits of coverage. These all include most Medicare (A & B) coinsurance amounts, blood, and any other hospital perks that do not get coverage by your own Original Medicare.

    • Part A 
    • 61-90 days of stay at Hospital
    • 91-150 days of a hospital stay
    • Additional Hospital Benefits
    • Another year of hospital care than your own Medicare benefit offered by your Hospital
    • Part B Coinsurance
    • Covers for coinsurance of Part B 

    Getting a Medigap Plan:

    These are supplemental insurance plans that State-licensed insurance agents sell. The initial step is to research policies that are available in your State. Be a savvy consumer and shop around and compare your plan on an annual basis making sure that you're still paying a reasonable rate.

    You can purchase insurance from an agent or go directly and purchase from the insurance carriers. Consider using an insurance agent since they can help compare the different policies offered by other carriers. 

    Frequently Asked Questions About Medigap Plans

    Q.) The best supplement plan for this year:

    A.) In the case of the most coverage, then Medigap Plan F is the best. However, it would be best if you considered other factors like financial status and health. Mostly healthy individuals can afford to take a bit of risk. In this case, the Medigap Plan N is the best way to save your money. If you are turning 65 in 2021, Medigap Plan G is an excellent choice.  

    Q. ) The most cost-effective Medicare supplement plan:

    A.) Medigap Plan F is the best comprehensive plan, but it might not be the best in cost-effectiveness. Plan F covers Medicare deductibles and all the coinsurance, which means that you don't need to pay anything out of pocket. However, many healthy individuals think that they save more via the Medigap Plan N policy.

    Q.) Differences in Medicare supplement plans:

    A.) The main differences between each Medigap plan are only the gaps that they cover. With Original Medicare (both A & B), you usually pay various deductibles, copays, and coinsurances while using your health care services. These costs typically add to about 20% of the total cost. That's good for 1-2 doctor visits every year but not for hospitalization.

    Speak to a licensed insurance agent today for more info.

    Leave a Comment

    This site uses Akismet to reduce spam. Learn how your comment data is processed.