Medicare supplement plans are private insurance plans designed to fill some of the gaps in Medicare coverage. For this reason, people also call these policies Medigap. Medicare supplement insurance cover things like deductibles and copayments.

If you use medical services when you have Medicare supplement insurance, Medicare pays its portion first, then your Medicare supplement plan will pay for any remaining covered costs.

There are many factors to consider when choosing a Medicare supplement plan. Read on for tips on deciding if you need a Medigap plan and a comparison of options.

There are 10 Medicare supplement insurance plans available. However, some plans are no longer available to new enrollees. Medicare uses capital letters to refer to these plans, but they aren’t related to Medicare parts.

For example, Medicare Part A is a different type of coverage than Medigap Plan A. It’s easy to get confused when comparing parts and plans. The 10 Medigap plans include plans A, B, C, D, F, G, K, L, M, and N.

Medicare supplement plans are standardized in most states. This means the policy you buy should offer the same benefits no matter what insurance company you buy it from.

Exceptions are Medigap policies in Massachusetts, Minnesota, and Wisconsin. These plans may have different standardized benefits based on the legal requirements in that state.

If an insurance company sells a Medicare supplement plan, they must offer at least Medigap Plan A as well as either Plan C or Plan F. However, the government doesn’t require that an insurance company offer every plan.

An insurance company can’t sell you or a loved one a Medicare supplement insurance plan if you already have coverage through Medicaid or Medicare Advantage. Also, Medicare supplement plans only cover one person — not a married couple.

Use the chart below to help compare what each plan covers.

Every Medigap plan covers all or part of Part A coinsurance, hospital costs up to an additional 365 days after Medicare benefits are exhausted, and hospice care coinsurance or copayment.

All Medigap plans also cover all or part of your Part B coinsurance or copayment and your first three pints of blood should you need a transfusion.

This chart is based on Medicare.gov data for 2020 plans, and it allows you to compare other options to see what an individual plan covers or does not cover.

BenefitPlan
A
Plan
B
Plan
C
Plan
D
Plan
F
Plan
G
Plan
K
Plan
L
Plan
M
Plan
N
Benefit
Part A
deductible
NoYesYesYesYesYes50%75%50%YesPart A
deductible
Part B
deductible
NoNoYesNoYesNoNoNoNoNoPart B
deductible
Part B
excess charge
NoNoNoNoYesYesNoNoNoNoPart B
excess charge
Out-of-pocket
limit
N/AN/AN/AN/AN/AN/A$5,560$2,780N/AN/AOut-of-pocket
limit
Foreign travel exchange (up to plan limits)NoNo80%80%80%80%NoNo80%80%Foreign travel exchange (up to plan limits)
Skilled
nursing
facility
care
co-insurance
NoNoYesYesYesYes50%75%YesYesSkilled
nursing
facility
care
co-insurance

Some changes are coming to Medicare supplement plans starting on Jan. 1, 2020. If a person is new to Medicare, they can no longer purchase a plan that covers Part B (medical insurance) deductibles.

For this reason, if you or a loved one are new to Medicare in 2020, you won’t be able to purchase Medigap Plan C or Plan F. However, if a person already has one of these plans, they can usually keep their plan.

Even though Medicare supplement plans are standard in terms of the benefits they offer, they can vary in price based on the insurance company that sells them.

It’s kind of like shopping at a sale: Sometimes, the plan you want costs less at one store and more at another, but it’s the same product.

Insurance companies usually price Medigap policies in one of three ways:

  • Community rated. Most people pay the same, regardless of age or sex. This means if a person’s insurance premium goes up, the decision to increase it is related more to the economy than a person’s health.
  • Issue-age rated. This premium is related to a person’s age when they bought it. As a general rule, younger people pay less and older people pay more. A person’s premium may increase as they get older due to inflation, but not because they’re getting older.
  • Attained-age rated. This premium is lower for younger people and goes up as a person gets older. It may be the least expensive as a person first buys it, but it can become the most expensive as they age.

Sometimes, insurance companies will offer discounts for certain considerations. This includes discounts for people who don’t smoke, women (who tend to have lower healthcare costs), and if a person pays in advance on a yearly basis.

Benefits of choosing a Medigap plan

  • Medicare supplement insurance plans can help cover costs like deductibles, coinsurance, and copayments. Some Medigap plans can virtually eliminate out-of-pocket costs for a person.
  • If you enroll in the open enrollment period after you turn 65, insurance companies can’t exclude you based on health conditions.

Disadvantages of choosing a Medigap plan

  • These plans don’t help pay for prescription drug costs. You’d have to add another plan for that.
  • Plan F, one of the most comprehensive Medigap plans, won’t be available after December 2019 for new enrollees.

Medicare Advantage is a bundled insurance plan. It includes Part A and Part B as well as Part D, in most cases.

Medicare Advantage plans may be less expensive than Original Medicare for some people. Medicare Advantage plans may also offer additional benefits, such as dental, hearing, or vision coverage.

Here’s a quick look at each plan:

  • Both plans include Medicare Part A (hospital coverage) and Part B (medical insurance).
  • Most Medicare Advantage plans include Part D (prescription drug coverage). A person must add Part D plans if they have Original Medicare.
  • If you have Medicare Advantage, you can’t purchase a supplemental coverage plan. Only people with Original Medicare can.

Often, the decision comes down to individual health needs and how much each plan costs. Medicare supplement plans may be more expensive than Medicare Advantage, but they also may pay for more related to deductibles and insurance costs.

You may need to shop around for what plans are available to you or a loved one to help make the best choice.

The best time to buy a Medicare supplement insurance plan is when a person is in the Medigap open enrollment period. This is the time period when you turn 65 and 6 months after. During this time, you have a guaranteed right to buy a Medicare supplement plan.

If you stay enrolled and pay your premium, the insurance company can’t cancel the plan. However, if you already have Medicare, an insurance company can deny selling you a Medicare supplement policy based on your health.

Buying a Medicare supplement plan can take time and effort, but it’s well worth it. This is because most people keep their Medigap policies for the rest of their lives.

Starting off with the policy that best fits your or your loved one’s needs can help save frustration and often money at a later time.

Here are the basic steps to buying a Medigap policy:

  • Evaluate what benefits are more important to you. Are you willing to pay some of a deductible, or do you need full deductible coverage? Do you anticipate needing medical care in a foreign country or not? (This is helpful if you travel a lot.) Look at our Medigap chart to determine what plans offer you the best benefits for your life, finances, and health.
  • Search for companies that offer Medicare supplement plans by using the Medigap plan search tool from Medicare. This website gives information on policies and their coverage as well as insurance companies in your area that sell the policies.
  • Call 1-800-MEDICARE (1-800-633-4227) if you don’t have regular access to the Internet. The representatives who staff this center can help provide the information you need.
  • Contact insurance companies who offer policies you’re looking at. While it takes some time, don’t just call one company. The rates can vary by company, so it’s best to compare. Cost isn’t everything, though. Your state’s insurance department and services like weissratings.com can help you find out if a company has a lot of complaints against it.
  • Know that an insurance company should never pressure you to buy a policy. They also shouldn’t claim to work for Medicare or claim that their policy is a part of Medicare. Medigap policies are private and not government insurance.
  • Choose a plan. Once you have looked over all the information, you can decide on a policy and apply for it.

Medicare supplement plans can be difficult to navigate. If you have a specific question, you can call your State Health Insurance Assistance Program (SHIP). These are federally funded state agencies that provide free counseling to people with questions about Medicare and supplement plans.

Tips for helping a loved one enroll

If you’re helping a loved one enroll in Medicare, consider these tips:

  • Ensure they enroll in the time period allotted. Otherwise, they could face greater costs and penalties for enrolling late.
  • Ask how the insurance company prices their policy, such as issue-age or attained-age. This can help you anticipate how your loved one’s policy could increase in price.
  • Ask how much the policy or policies you’re closely evaluating have increased in costs over the past few years. This can help you evaluate if your loved one has enough funds to cover the costs.
  • Ensure your loved one has a secured way to pay for the policy. Some policies are payable by check monthly, while others are drafted from a bank account.

Medicare supplement insurance policies can be a way to reduce the fear of the unpredictable, in terms of healthcare costs. They can help pay for out-of-pocket costs that Medicare may not cover.

Using free state resources, such as your state’s insurance department, can help you or a loved one make the best decision regarding coverage.