Medicare Supplement Plan M (Medigap Plan M) is one of the newer Medigap plan options. This plan is designed for people who want to pay a lower monthly rate (premium) in exchange for paying for half of the annual Part A (hospital) deductible and the full annual Part B (outpatient) deductible.
If you don’t expect frequent hospital visits and are comfortable with cost-sharing, Medicare Supplement Plan M may be a good choice for you.
Keep reading to learn more about this option, including what it covers, who’s eligible, and when you can enroll.
Medicare Supplement Plan M coverage includes the following:
- 100 percent of Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used up
- 50 percent of the Part A deductible
- 100 percent of Part A hospice care coinsurance or copayments
- 100 percent of costs for blood transfusions (first 3 pints)
- 100 percent of skilled nursing facility care coinsurance
- 100 percent of Part B coinsurance or copayments
- 80 percent of qualifying healthcare costs while traveling abroad
Cost-sharing is basically the amount of money due and payable by you after Medicare and your Medigap policy have paid their shares.
Here’s an example of how cost-sharing might play out:
You have original Medicare (parts A and B) and a Medigap Plan M policy. Following hip surgery, you spend 2 nights in the hospital and then have a series of follow-up visits with your surgeon.
Your surgery and hospital stay are covered by Medicare Part A after you have met the Part A deductible. Medigap Plan M pays half of that deductible and you are responsible to pay the other half out of pocket.
In 2021, the Medicare Part A inpatient hospital deductible is $1,484. Your Medigap Plan M policy share would be $742 and your share would be $742.
Your follow-up visits are covered by Medicare Part B and your Medigap Plan M. Once you have paid for the annual Part B deductible, Medicare pays for 80% of your outpatient care and your Medicare Plan M pays for the other 20%.
In 2021, the Medicare Part B annual deductible is $203. You would be responsible for that full amount.
Other out-of-pocket costs
Before selecting a healthcare provider, check if they will accept the Medicare assigned rates (price Medicare will approve for the procedure and treatment).
If your doctor does not accept Medicare’s assigned rates, you can either find another doctor who will or stay with your current doctor. If you elect to stay, your doctor is not allowed to charge more than 15 percent above the Medicare-approved amount.
The amount charged by your doctor above the Medicare assigned rate is called a Part B excess charge. With Medigap Plan M, you’re responsible for paying Part B excess charges out of pocket..
After you’ve received treatment at the Medicare-approved rate:
- Medicare Part A or B pays its share of the charges.
- Your Medigap policy pays its share of the charges.
- You pay your share of the charges (if any).
To be eligible for Medicare Supplement Plan M, you must be enrolled in original Medicare Part A and Part B. You must also live within an area where this plan is sold by an insurance company. To find out if plan M is offered in your location, enter your ZIP code in Medicare’s Medigap plan finder.
Your 6-month Medigap open enrollment period (OEP) is generally the best time to enroll in any Medigap policy including Medigap Plan M. Your Medigap OEP starts the month that you’re age 65 or older and enrolled in Medicare Part B.
The reason to enroll during your OEP is that the private insurance companies that sell Medigap policies cannot deny you coverage and must offer you the best available rate, regardless of your health status. Best available rate may depend on factors, such as:
- marital status
- where you live
- whether you are a smoker
Enrolling outside your OEP may trigger a requirement for medical underwriting and your acceptance isn’t always guaranteed.
Medicare supplement (Medigap) plans help cover some of the “gaps” between the cost of healthcare and what Medicare contributes to those costs.
With Medigap Plan M, you pay a lower premium but share in the costs of your Medicare Part A (hospital) deductible, Medicare Part B (outpatient) deductible, and Part B excess charges.
Before committing to Medigap Plan M or any other Medigap plan, review your needs with a licensed agent who specializes in Medicare supplements to help you. You can also contact your state’s State Health Insurance Assistance Program (SHIP) for free help in understanding available policies.
This article was updated on November 20, 2020, to reflect 2021 Medicare information.
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