Medicare Supplement Insurance Explained

Medicare Supplement Insurance, commonly known as Medigap, is offered by private insurers to help cover costs that Original Medicare doesn't, such as copayments, coinsurance, and deductibles.

How Does Medigap Work?

Medicare initially pays its share of approved healthcare costs. Then, Medigap steps in to assist with expenses that Medicare doesn't fully cover. The extent of coverage depends on the specific Medigap policy chosen.

Coverage of Medigap Plans

While Original Medicare covers about 80% of Part B medical costs, Medigap policies are designed to cover the remaining 20%, shielding you from significant out-of-pocket expenses, particularly in the case of extended hospital stays or high-cost outpatient services.

Limitations of Medigap

Medigap plans don't cover everything. They typically do not include:

• Routine dental, vision, and hearing tests

• Hearing aids

• Prescription glasses or contact lenses

• Long-term or custodial care

• Prescription drugs (these are covered by Medicare Part D plans)

Which Medigap Plans Can I Choose From?

The top five Medicare Supplement plans are Plan C, D, F, G, and N.

Medicare Supplement Plan G Plan G is highly favored by individuals who became eligible for Medicare on or after January 1, 2020. It offers comprehensive coverage similar to Plan F, with the single exception of the Medicare Part B annual deductible. After this deductible is paid, Plan G provides coverage that mirrors Plan F. Typically, Plan G's monthly premiums are more economical than those of Plan F, even when including the Part B deductible. There is also a high deductible version of Plan G, referred to as HDG, which operates similarly to the high deductible Plan F.

Medicare Supplement Plan N Chosen often by those seeking a balance between coverage and cost, Plan N offers coverage levels close to Plan G with some distinctions. Visits to healthcare providers incur a modest copayment, generally no more than $20, and emergency room visits a $50 copayment, assuming hospital admission does not follow.

Medicare Supplement Plan C Plan C is often selected by those who appreciated Plan F, offering nearly identical benefits with the exception of not covering Part B excess charges. Plan C is no longer an option for new Medicare beneficiaries. Those who were already enrolled in Medicare before it was discontinued can still access this plan, which does not cover Part B excess charges and comes with premiums that are typically lower.

Medicare Supplement Plan D Medigap Plan D is to Plan G what Plan C is to Plan F. It provides the same benefits as Plan G except for not covering the Part B excess charges. This similarity extends to all aspects of coverage except for the Part B excess charges, which are not covered under Plan D.

Medicare Supplement Plan F Renowned for its extensive coverage, Plan F remains a top choice for addressing the costs Medicare Part A and B do not cover, taking charge of all copayments, coinsurance, and deductibles. There's also a high-deductible Plan F (HDF), which may appeal to beneficiaries who don’t frequently need medical services but desire coverage with a capped out-of-pocket threshold. Plan F enrollment is exclusively available to those who were Medicare-eligible prior to 2020.