Compare Medicare health plans

Required information for accurate health plan quotes

Medicare

Medicare is a federal health insurance program for people who are 65 or older, certain younger people with disabilities and people with End Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant). Generally, there are two tracks for the Medicare consumer: Original Medicare/Medicare Supplement Insurance and Medicare Advantage Insurance.

What is the difference between Original Medicare/Medicare Supplement and Medicare Advantage Insurance?

A Medicare Advantage policy bundles all Medicare benefits, plus additional benefits; a Medicare supplement policy is a supplement to Original Medicare. It is illegal to be sold both. You can only have one or the other.

Some Medicare Advantage plans include extra benefits not covered by Original Medicare such as vision, hearing, or dental. Medicare Supplement plans also called Medigap plans don’t typically cover long-term care, vision or dental care, hearing aids, eyeglasses, or private-duty nursing.

Original Medicare/Medicare Supplement Insurance

A plan to fill the gaps in Medicare

When you turn age 65 and qualify for Medicare, you get coverage for a range of hospital and medical expenses. But the federal health insurance program doesn’t include benefits for all of your healthcare costs and, of course, you’ll still be on the hook for your deductible and coinsurance. That’s why you’ll want to consider Medicare supplement insurance.

Medicare supplement plans can help reduce what you pay out-of-pocket for items and services that Medicare doesn’t cover. The different plans are lettered A through N (more on that later), each offering a different blend of benefits.

What is Medicare supplement insurance?

Medicare supplement insurance is designed as extra coverage to help pay for some of the healthcare costs Medicare doesn’t cover. Supplement plan benefits include coinsurance and deductible amounts for Medicare Part A and Part B as well as foreign travel emergency benefits. Which specific benefits you receive with your Medicare supplement insurance will depend on which policy you choose.

Medicare supplement insurance is also known as Medigap because it fills the “gaps” in Medicare coverage.

What Medicare supplement insurance isn’t

Medigap plans are not the same as Medicare Advantage plans, Medicare prescription drug plans, Medicaid, employer or union plans, TRICARE, veterans’ benefits, long-term care insurance, and Indian Health Service, tribal, and Urban Indian Health plans.

Medicare 101

Before we dive much deeper into the ins and outs of Medicare supplement plans, it will be helpful to understand some basics related to Medicare.

Original Medicare comes in three main parts (Part C is Medicare Advantage):
Part A (hospital insurance) helps cover inpatient care, skilled nursing facility care, hospice care, and home healthcare.
Part B (medical insurance) helps cover outpatient care, home healthcare, services from doctors and other healthcare providers, durable medical equipment, and many preventive care services.
Part D (prescription drug coverage) helps cover the cost of prescription drugs; plans A and B do not include prescription drugs.

Together, Part A and Part B are known as Original Medicare. The Medicare Modernization Act of 2003 added Part D for prescription drugs that can be added as a stand alone insurance plan.

If you have a Medicare Advantage plan(Part C), you cannot enroll in a Medicare supplement plan.

What do Medicare supplement plans cover?

Medicare supplement policies are standardized under federal and state laws. They must offer the same core benefits. Through a federal waiver, three states standardize their policies differently than the rest of the U.S.; these states include Massachusetts, Minnesota, and Wisconsin.

Standardized Medigap plans are labeled A through N; however, plans E, H, I, and J are no longer open to new enrollees. Benefits typically covered by Medigap plans include a combination of the following, which can be compared in detail at Medicare.gov:

  • Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used up
  • Part B coinsurance or copayment
  • Blood (first 3 payments)
  • Part A hospice care coinsurance or copayment
  • Skilled nursing facility care coinsurance
  • Part A deductible
  • Part B deductible
  • Part B excess charge
  • Foreign travel exchange (up to plan limits)

You may be interested to know that standard Medigap plans C, D, F, G, M, and N provide foreign travel emergency healthcare benefits—plans E, H, I, and J do as well but are no longer sold to new enrollees and in 2020 plans C and F will no longer be sold to new enrollees. These plans will cover foreign travel emergency care if it begins in the first 60 days of your trip and Medicare doesn’t otherwise cover the care; these plans pay 80% of the billed charges for medically necessary emergency care outside the U.S. after you meet a $250 annual deductible.

Would a person have more than one Medicare supplement policy?

No. You will select one plan. It is also important to know that Medigap plans only cover one person. If your spouse also needs coverage, they will need their own policy.

Who can buy Medicare supplement insurance … and when?

Anyone who is Medicare-eligible and not enrolled in a Medicare Advantage plan can buy a Medigap plan. There are, however, specific times during which you can buy a Medicare supplement policy. The best time is during your 6 month Medigap open enrollment period which begins the month that you turn 65. During this time period, you are guaranteed coverage and at the same rate as anyone else in good health.

You may be able to buy Medicare supplement insurance outside of the open enrollment period, but you are not guaranteed coverage. Medicare supplement policies may be subject to underwriting, which means your application may be denied or you may be charged more based on your health. There are some exceptions to this rule; for instance, you may be able to provide evidence that you’re entitled to a guaranteed issue right. You can learn more about Medigap eligibility during and outside of open enrollment at Medicare.gov.

Medigap plans are guaranteed renewable, regardless of whether or not your health remains the same. That means an insurance company can’t typically drop you. Exceptions include not making premium payments on time or providing false information on your application. You can cancel your Medigap policy by contacting your insurance company.

Already have Medicare Advantage? You can’t enroll in a Medicare supplement policy at the same time. It is illegal for insurance companies to sell you one if you have the other. If you are moving from a Medicare Advantage plan to a Medicare supplement plan, do not cancel your coverage until you are sure you have been approved.

How much does Medicare supplement insurance cost?

The cost of Medicare supplement policies is usually the only real difference between those of the same letter. The premium you pay may be based on any of the following factors:

  • What type of plan you buy (generally, the higher the level of benefits you select, the higher the monthly premium)
  • Your insurance company
  • Your age at the time of application as well as your age as you get older
  • Where you live

Rates can vary greatly from one region to the next. One analysis found that monthly premiums for Medigap Plan F averaged as high as $162.25 in Massachusetts and as low as $109.16 a month in Hawaii.

You’ll want to gather quotes for the Medicare supplement policies you’re considering to see what coverage could cost you.

Can you buy Medicare supplement plans online?

Yes. Private companies sell Medicare supplement insurance, and you can get a quote and fill out an application online. Not every company that sells Medigap plans will sell every Medigap plan available. They must all offer Medigap Plan A along with Plan C or Plan F.

How to compare and choose Medicare supplement plans

The only real difference between Medigap policies is typically price. As discussed earlier, Medicare supplement plans of the same letter must offer the same benefits—you can get a basic overview at medicare.gov or read about plan details at insurance company websites. Some plans will offer additional benefits. Once you decide which letter plan you want, rates set by the companies selling them will be the key differentiator.

Waiting periods are one more thing to consider. While a company can’t deny you coverage during your initial enrollment period, regardless of pre-existing conditions, it can impose a waiting period of up to six months for pre-existing conditions that were treated or diagnosed six months before your enrollment in the Medigap policy plan. During this time the company will not pay out-of-pocket costs for these conditions; Original Medicare will continue to provide benefits, but you will be responsible for Medicare coinsurance or copayment amounts.

Make sure that the plan you’re considering is definitely a Medicare supplement plan. Insurance companies must clearly identify Medigap plans as Medicare Supplement Insurance on the front.

Again, not all companies that sell Medigap plans sell all Medigap plans available.

Is a Medigap policy right for you?

Does everyone on Original Medicare need a Medicare supplement policy as well? Choosing to enroll in a Medicare supplement plan is an individual decision, of course. If you find the premium affordable, it can be a way to help with out-of-pocket expenses not covered by Medicare as you get older and require more healthcare.

It would seem more Medicare beneficiaries are enrolling in Medicare supplement policies. An AHIP report on the state of Medigap showed that 13.1 million people had enrolled in Medigap plans as of December 2016—an increase from 12.3 million in the prior year.

Enrollees are not evenly distributed across the U.S. Another report by the Kaiser Family Foundation found that Medigap enrollees accounted for 3% all Medicare beneficiaries in Hawaii and 51% in Kansas.

The best way to decide if Medicare supplement insurance is right for you is to explore and compare your options. Make this research a part of your retirement planning, before you turn age 65 and enroll in Medicare. Gather quotes. Consider your ability to cover out-of-pocket healthcare expenses on your own. Then decide what best meets your healthcare and financial needs month to month and in the long term.

If you have questions about Medigap plans, contact the insurance company that sells the coverage you’re considering or a licensed health insurance agent.

Learn More About Medicare

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