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Medicare Supplement Insurance: What Is It?

Medicare Insurance

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5 Things You Didn’t Know About Medicare

Every day, more than 10,000 people enroll in Medicare. But that doesn’t make navigating through the Medicare process or understanding your options any easier.

Here are 5 things you might not know about Medicare:

1. Signing up for Medicare is as easy as A, B, C, and D.
There are four important parts to Medicare. Parts A and B are under the Original Medicare plan. They cover hospital and medical costs, like overnight visits to the emergency room, hospital stays, and some lab tests. Parts C and D include optional or add-on benefits. These are things like coverage under private insurance companies and prescription drug plans.

2. Even if you’re not 65, you may be eligible.
The 65 and older population is growing faster than even the total U.S. population. But even if you’re not 65, you may be able to sign up for Medicare. If you have ALS, end-stage renal disease, or another disability, your Medicare Parts A and B coverage can start immediately.

3. There’s a specific window of time when you can enroll in Medicare.
The Medicare open enrollment period is October 15 to December 7 each year. This is when eligible people can join or change their Medicare coverage plan. It’s also when drug companies can make changes to their offerings and coverage.

4. More than 90% of people with Medicare have some kind of supplemental coverage.
You can think of Medicare parts A and B as a basic car model. They’ll get you where you need to go, but may not have the same bells and whistles as a luxury vehicle. Medicare parts C and D are the upgrades. They’re the smooth leather interiors and surround-sound stereo systems. This add-on coverage isn’t necessary, but may be a good idea if you’re looking for extra protection or a wider range of options.

5. Just because you have Medicare doesn’t mean that you won’t have to pay for healthcare.
When you reach retirement age, you may think that your Medicare coverage will literally cover everything. But that’s simply not the case. The average healthy couple can expect to amass up to $240,000 in medical expenses during their golden years. Setting aside a special budget or savings account, looking at supplemental coverage, and talking with a financial advisor are just some things you can start doing today to prepare for tomorrow.

There you have it: 5 things about Medicare that you may find surprising. While signing up and enrolling in a plan can be overwhelming, knowing more about how things work can make the whole process much easier.

Medicare is the government’s health insurance program for adults age 65 and over, and for those with kidney failure or certain other serious disabilities. It offers fairly comprehensive coverage for doctor’s visits, hospital stays, and medications, but it doesn’t cover everything. You’re still responsible for many out-of-pocket costs, including deductibles, copayments, and coinsurance. That’s where Medicare supplement insurance comes in.

What Is Medicare Supplement Insurance?

Medicare supplement insurance is an add-on to Medicare Parts A and B. It’s also called Medigap insurance, because it fills in for Medicare cost gaps. When you buy Medigap insurance, it will cover many of the out-of-pocket costs Medicare won’t pay for along with a few extras.

Is Medigap the Same as a Medicare Advantage Plan?

No. Medigap is not the same as a Medicare Advantage Plan (Part C). Medicare Advantage plans are an alternative to Medicare Parts A and B coverage. Medigap is an add-on to Parts A and B.

Types of Medicare Supplement Insurance Policies

Medigap comes in an alphabet of plans from A through N. Each policy offers a specific set of benefits. Insurance companies don’t have to carry every single kind of Medigap plan, but they all must at least carry Plan A.

What Does Medicare Supplement Insurance Cover?

Medicare supplement insurance pays for costs you would normally be responsible for under Medicare, including:

  • Deductibles: The amount you must pay before Medicare coverage kicks in.
  • Coinsurance: Your share of the cost for a medical service.
  • Copayments: A set percentage of the costs for drugs and some health services.

Medigap may also pay for some services Medicare doesn’t cover, including the costs of medical care when you travel outside of the U.S.

What Doesn’t Medicare Supplement Insurance Cover?

Any new Medigap policy you buy won’t cover prescription drugs. You’ll need to sign up for Medicare Part D to get prescription coverage.

Your plan also won’t cover:

  • dental care
  • eyeglasses
  • hearing aids
  • long-term care
  • private nursing
  • routine vision care

How Medicare Supplement Insurance Works

You buy Medicare supplement insurance coverage through a private insurance company. Then you’ll pay that company a monthly premium on top of the premium you already pay Medicare.

Each individual must have their own Medicare supplement insurance policy. So if you’re married, you and your spouse will have to buy separate policies.

When you see your doctor or stay in the hospital, your Medicare Part A or B coverage will kick in first. Then, your supplement insurance will cover any leftover costs.

Can I Have Medigap and a Medicare Advantage Plan?

No. You can’t have both Medicare supplement insurance and a Medicare Advantage Plan. Medicare supplement insurance can’t be used to pay for deductibles, copayments, and other fees from a Medicare Advantage Plan. If you want Medicare Advantage, you’ll need to switch back to a regular Medicare Part A and B plan.

Can I Be Denied for Medicare Supplement Insurance?

The private insurance company you choose can deny your request for Medicare supplement insurance because of a pre-existing health condition. However, once you have a plan, the insurance company has to renew it no matter what health problems you develop.

Insurance companies can’t sell you a Medigap policy if you:

  • don’t already have Medicare Parts A and B
  • have a Medicare Advantage Plan, unless you’re planning to leave that plan
  • have Medicaid

How Do I Sign up for Medicare Supplement Insurance?

Your best option is to sign up during a Medigap open enrollment period. This 6-month period starts the first month you’re covered under Medicare Part B. During this time, you’ll get the best prices and the most coverage options.

You can buy Medicare supplement insurance from any licensed private insurance company in your state. To find a policy in your area, visit:

Costs and coverage can vary quite a bit from plan to plan. Read each policy carefully, and compare different plans until you find one that best fits your medical needs and budget.