Medicare Supplements the Basics

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Updated 01/01/2017

To explain how Medicare Supplements work you must first understand Medicare. Medicare is a Federal insurance program that pays for a variety of healthcare expenses. Medicare is administered by the Centers for Medicare & Medicaid Services (CMS), a division of the U.S. Department of Health & Human Services (HHS).

Medicare beneficiaries are typically senior citizens aged 65 and older.

Medicare Supplements and Medicare

Medicare pays 80% of covered medical expenses. Medicare Supplements also referred to as Medigap or Supplemental Plans are designed to fill in the remaining 20% of what Medicare doesn’t cover. Such as medically necessary co-pays and deductibles for covered hospitalization, medical services, and doctor visits.

Before purchasing a Medicare Supplement, you must first enroll in Medicare Part A and Part B.

Medicare Supplements Coverage

Medicare Supplements Have AdvantagesMedicare Resources Icon

bulletPredictable costs

bulletFreedom to choose any doctor or hospital that accepts Medicare

bulletFreedom to see a specialist that accepts Medicare without a referral

bulletSame benefits year after year

bulletGuaranteed renewable coverage

bulletCoverage for foreign travel (some plans)

Standardized Medicare Supplement Plans

Medicare Supplements are “standardized.” There are ten plans of coverage approved by federal and state laws. These plans are labeled A through N. All plans regardless of the insurance company must offer the same benefits. The only significant difference between the standardized plans is the rate. Example: Medigap Plan F with Company ABC has the same benefits as another Medigap Plan F with any other company.

Medicare Supplements Benefit Chart

Medicare Benefit Chart

*Plans K-N provide for different cost sharing.

*Plans K and L pay 100% of hospitalization and preventive care Basic Benefits. All other Basic Benefits are paid at 50% for Plan K, and 75% for Plan L. Once you reach the annual limit, the plan pays 100% of the Medicare copayments, coinsurance, and deductibles for the rest of the calendar year. The annual out-of-pocket limit does NOT include costs from your provider that exceed Medicare-approved amounts (excess charges).

*Plan F is also offered as a high-deductible plan. With a high-deductible Plan F, you must pay for Medicare-covered expenses such as copays and deductibles up to $2,300 in 2019 before the policy pays anything.

*Plan N covers Basic Benefits after a $20 copay for office visits and a $50 copay for emergency room visits.

Click a Plan for More Details

Plan A    Plan B    Plan C    Plan D    Plan F  HD Plan F  Plan G    Plan K    Plan L    Plan M    Plan N

Medicare Supplements Benefit Guide

The following Medicare Supplement Benefit Guide will help you compare plans. There are only nine areas of coverage to consider when comparing the different Medigap Plans. All standardized plans cover a portion of these benefits. For example, a Medigap Plan A covers four of them, and a Medigap Plan F covers them all. Let us take a closer look at what these benefits are.

1. Medicare Part A Coinsurance (Hospital)

This benefit covers the coinsurance amounts associated with the cost of hospitalization (semi-private room, general nursing, miscellaneous services, and supplies). After paying your Part A Deductible, Medicare pays for the first 60 days of hospitalization. For days 61-90 Medicare pays all except for $329; days 91 and beyond, Medicare pays all except $658 a day, up to the 60 lifetime reserve days. All standardized Medicare Supplements cover Medicare Part A Coinsurance, and this means they will pay the coinsurance amounts for days 61 through your lifetime reserve, $329 and $658 a day respectfully.

All Medicare Supplements cover this benefit.

2. Medicare Part B Coinsurance (Medical)

This benefit covers care given in or out of the hospital, including outpatient treatment (doctor services, supplies, speech and physical therapy, diagnostic tests, durable medical equipment). After paying your Part B Deductible, Medicare pays 80% of the cost. All of the standardized Medicare Supplements cover the remaining 20% not paid by Medicare. Medigap Plan N requires a $20 copay for doctor’s office visits before paying the remaining 20%.

All Medicare Supplements cover this benefit.

3. Blood (First 3 Pints)

This benefit applies to both Part A and Part B of Medicare. Under most circumstances blood is supplied free of charge via a blood bank. However, if there is a charge, Medicare only covers the cost after the first 3 pints. All standardized Medicare Supplement plans cover the expense of the first 3 pints if there is a charge.

All Medicare Supplements cover this benefit.

4. Part A Hospice Care Coinsurance and Copay

If you require hospice care, Medicare covers all costs except a $5 copay for prescription drugs and a 5% coinsurance for respite care. All standardized Medicare Supplements cover the coinsurance and copays associated with hospice care.

All Medicare Supplements cover this benefit.

5. Skilled Nursing Facility Care Coinsurance

For the first 20 days of care, Medicare covers all expenses. Days 21-100 Medicare pays all except $164. Days 101 and beyond, Medicare pays nothing. The plans that offer this benefit will pay all coinsurance amounts up to the 101st-day except Medigap Plan K (50%) and Medigap Plan L (75%).

Plan C, Plan D, Plan F, Plan G, Plan K*, Plan L*, Plan M, Plan N

Not Covered:
Plan A, Plan B

6. Part A Deductible

Before Medicare pays any benefits under Part A, there is a deductible of $1,316 per benefit period. The plans that offer this benefit will pay the deductible in full except Medigap Plan K (50%), Medigap Plan L (75%), and Medigap Plan M (50%).

Plan B, Plan C, Plan D, Plan F, Plan G, Plan K*, Plan L*, Plan M*, Plan N

Not Covered:
Plan A

7. Part B Deductible

Before Medicare pays for any Part B benefits, there is a once a year Medicare Part B Deductible of $183. Both Plans that offer this benefit pay 100%. Due to new legislation taking effect in 2020, this benefit will no longer be provided.

Plan C, Plan F

Not Covered:
Plan A, Plan B, Plan D, Plan G Plan K, Plan L, Plan M, Plan N

8. Part B Excess Charges

These charges refer to costs under Medicare Part B that are above the Medicare approved amounts. For further information see The Truth About Medicare Part B Excess Charges. Medigap Plan F is the only plan to cover these charges.

Plan G, Plan F

Not Covered:
Plan A, Plan B, Plan C, Plan D, Plan K, Plan L, Plan M, Plan N

9. Foreign Travel Emergency

Exactly how it sounds, this covers emergency health care coverage when traveling outside the United States. Out of the 10 standardized plans, 6 offer coverage. However, the extent of this coverage will vary by company.

Offers Coverage:
Plan C, Plan D, Plan F, Plan G, Plan M, Plan N

Not Covered:
Plan A, Plan B, Plan K, Plan L

Buying a Medigap Plan

The first step is to determine your eligibility. If you are turning 65, and in your Initial Enrollment Period (IEP), your Medicare supplement is guaranteed issue. Meaning the company will not ask any health questions when you apply for Medigap coverage. Your IEP starts three months before the first day of the month in which you turn 65. Be sure to consult with your insurance agent regarding eligibility.

Compare the different A through N plans and decide on the benefits you want. Remember when choosing always to consider your current and future healthcare needs.

Rates vary between the different plans and more expensive isn’t necessarily better. Shop and compare as many companies as possible. Rates can vary significantly.

Supplemental policies are not a one size fits all. Choosing the right coverage can be complicated and confusing. Before making a final decision, Medigap Planners highly recommends speaking with one of our licensed agents. We can help determine your eligibility and needs. Free of charge you will be provided a detailed quote using our database of all the Medicare Supplement plans available in your area. Start today by comparing rates, or give us a call. We’ll be happy to help.