Medicare Supplement Plans (Medigap)

Medicare Supplement plans, sometimes called Medigap, are sold by private companies to fill gaps in Medicare Part A and Part B coverage. These parts, called Original Medicare, pay for much, but not all health care costs associated with medical supplies or services.

What Are the Benefits of Medicare Supplement Plans?

Medigap coverage may be a better option for certain retirees than Medicare Advantage plans or Original Medicare.

These supplemental insurance policies can help you pay out-of-pocket costs, including deductibles, coinsurance or copayments.

Tip
Medicare Supplement plans allow you to choose or keep your own doctor so long as the doctor accepts Medicare patients.
Source: Mutual of Omaha
Features of Medicare Supplement Insurance Plans
  • Coverage of some out-of-pocket costs not covered under Medicare Part A and Part B.
  • Coverage of coinsurance or copayments for Medicare Part B.
  • Coverage of Medicare Part A coinsurance costs for another 356 days after your Medicare benefits run out.
  • Coverage of Part A coinsurance or copayments for hospice care.
  • Portable coverage that allows you to take your Medigap plan anywhere in the United States.
  • You can go to any doctor who accepts Medicare patients.
  • You do not need a referral to see a specialist.
  • You will have guaranteed coverage for life.

To purchase a Medicare supplemental policy, you must first enroll in Medicare Part A and Part B. Medicare supplemental plans are different from Medicare Advantage plans.

Medicare Advantage plans are ways to get Medicare benefits while a Medigap plan simply supplements your Original Medicare coverage. You cannot enroll in both a Medicare Supplement plan and Medicare Advantage. You have to choose one or the other.

What Medigap Does Not Cover

While Medicare Supplement plans can help with some out-of-pocket costs, there are still some things that it will not pay for.

Services Not Covered by Medicare Supplement Plans
  • Dental care
  • Hearing aids
  • Long-term care
  • Private-duty nursing care
  • Vision care, eyeglasses or contact lenses

Medigap policies sold after Jan. 1, 2006, also do not cover prescription drugs. But you can purchase Medicare Part D prescription drug coverage along with a Medigap plan.

Types of Medicare Supplement Plans

There are 10 standardized Medicare Supplement plans available in 47 states, all sold by private insurers. Each plan offers the same coverage, regardless of the company who sells it.

The 10 plans are given letter names: A, B, C, D, F, G, K, L, M and N. These should not be confused with the parts of regular Medicare. For example, Medicare Supplement Plan A is different from Medicare Part A.

If you live in Wisconsin, Minnesota or Massachusetts, Medigap insurance plans may offer different options from policies sold in the rest of the country.

Medigap Plan Coverage
Medigap Benefits ABDGKLMN
Part A coinsurance and hospital costs*
Part B coinsurance or copayment50%75%
Blood (first three pints)50%75%
Part A hospice care coinsurance or copayment50%75%
Skilled nursing facility care coinsurance50%75%
Part A deductible50%75%50%
Part B excess charge**
Foreign travel exchange (up to plan limits)80%80%80%80%
Out-of-pocket limit in 2020 N/AN/AN/AN/A$5,880$2,940N/AN/A
*Covers up to 365 additional days after Medicare benefits run out. **An excess charge is the amount a doctor or other health care provider may legally charge above the Medicare approved amount for Medicare Part A or Part B.

Plans C and F Phased Out

Medicare Supplement Plans C and F are being phased out. If you were eligible for Medicare on or after Jan. 1, 2020, you may not be able to purchase either of these plans. But if you had one of these plans already, you can keep it.

Plan F offered a high deductible. You may still be eligible for a high deductible Medicare Supplement Plan G in 2020, but it will not cover the Medicare Part B deductible.

Costs of Medicare Supplement Insurance

While the coverage in Medicare Supplement insurance plans is standardized, the costs are not. Different insurers may charge different premiums for the same lettered plan.

Insurers may set their premiums in three different ways, resulting in different prices for monthly premiums.

Medicare Supplement Plan Pricing Methods
Community No-Age-Rated
Plans have the same monthly premiums, regardless of you your age.
Issue-Age-Rated
Plans that base monthly premiums on your age when you first enroll, meaning the younger you are when you enroll, the cheaper your premiums will be.
Attained-Age-Rated
Monthly premiums are based on your age when you first enrolled, but they go up as you get older.

Shopping around could turn up a plan that better fits your needs. But regardless of what type of plan you choose, premiums may still increase over time because of inflation or other factors not related to your age.

Medigap Eligibility and Enrollment

The best time to enroll in a Medicare Supplement plan is when you are first eligible, according to the Centers for Medicare & Medicaid Services. This is the six-month open enrollment period, starting the month you turn 65 and have enrolled in Medicare Part B.

During that open enrollment period, you can purchase any Medigap policy sold in your state.

The open enrollment only lasts those six months. It can’t be changed or repeated, and after it closes you may not be able to enroll in a Medigap plan. If you are able to enroll later, it may cost you more to buy a plan.

Remember that Medigap and Medicare Advantage plans are different from one another, and you can only enroll in one, not both.

Last Modified: May 15, 2020

4 Cited Research Articles

  1. Centers for Medicare & Medicaid Services. (n.d.). How to Compare Medigap Policies. Retrieved from https://www.medicare.gov/supplements-other-insurance/how-to-compare-medigap-policies
  2. Centers for Medicare & Medicaid Services. (n.d.). When Can I Buy Medigap? Retrieved from https://www.medicare.gov/supplements-other-insurance/when-can-i-buy-medigap
  3. Centers for Medicare & Medicaid Services. (n.d.). What’s Medicare Supplement Insurance (Medigap)? Retrieved from https://www.medicare.gov/supplements-other-insurance/whats-medicare-supplement-insurance-medigap
  4. AARP. (n.d.). Medicare Supplement Insurance Plans. Retrieved from https://www.aarpmedicareplans.com/medicare-education/medicare-supplement-plans.html