Get Competing Insurance Quotes from Multiple Providers

Choose the Best Price

Medicare Insurance Options

Medicare and Medigap: “Parts” Versus “Plans”

Throughout this Medicare Supplement guide, we’ll refer to “parts” and “plans”. These two words are not interchangeable and they refer to two different things. Parts: Medicare is the federal social insurance program that provides health insurance to people ages 65 years and older; it is made up of four parts.

Plans: Medicare Supplement (“Medigap”) comes in 11 different plans from which you can choose. Each plan provides a different level of additional coverage to support your Medicare costs. 

Medicare: Parts

Medicare Part A: Provides coverage for some hospital costs. When combined with Part B, the two together are known as “Original Medicare”. Part A is provided by the federal government.

Medicare Part B: Provides coverage for some medical costs (doctors and outpatient care). When combined with Part A, the two together are known as “Original Medicare”. Part B is provided by the federal government.

Medicare Part C: This is referred to as “Medicare Advantage”. Usually, people choose to have Parts A and B covered by the federal government. Medicare Part C allows you to get Part A & B coverage through a private insurance company.

Medicare Part D: Provides coverage for prescription drugs, and is provided through a private health insurer.

Medigap: Plans

Medigap Plans A to N: Medicare Supplement plans are labeled with 10 different letters: A, B, C, D, F, G, K, L, M, and N. Each of these offer different benefits and are all provided by a private health insurer.

Medigap Plan F: While plans are distinguished by their letters, Plan F actually offers a high-deductible option. This means that, overall, you have 11 different Medicare Supplement plans from which you can choose.

Why Plans Aren’t Priced According to Letter Order: Plans are lettered A to N, but the price for each of these plans don’t increase or decrease in relation to their order in the alphabet (so, you’ll find that Plan C is more expensive than Plan K). The reason for this: over time, the federal government has introduced new plans and removed older plans (for example, Plan E no longer exists). 

What Original Medicare Doesn’t Cover

Original Medicare leaves significant coverage gaps, even when you are enrolled in Part A and Part B. Some of the important coverage gaps include:

Medicare Part A Deductible + Medicare Part B Deductible

Medicare Part A Coinsurance (for hospital visits and stays)

Medicare Part B Coinsurance (for doctor visits and medical equipment)

Foreign Medical Care

Each year, you are responsible for paying the deductible before Original Medicare coverage begins. For 2017, the Part A and Part B deductibles are $1,316 and $183, respectively.

Once you’ve paid the $1,316 deductible, Medicare Part A covers only the first 60 days of care. After that, you are responsible for 20% of everything that Medicare covers. This can turn into tens of thousands of dollars for a hospital stay longer than 60 days.

Once you’ve paid the Medicare Part B deductible of $183, you are responsible for 20% of everything that Medicare covers.

Original Medicare does not cover any healthcare costs outside of the US and its territories. If you are hospitalized while traveling overseas, you are responsible for all the costs. Certain Medigap plan types provide coverage for this. 

Why Medicare Supplement Insurance?

Medicare is a federal program that provides millions of Americans with health coverage. The program gives affordable benefits to people aged 65 years and older (as well as others who meet special criteria), but there limitations on those benefits.

As we age, our household earnings become more fixed, while our healthcare needs (and costs) increase. Medicare Part A (which provides hospital insurance) and Medicare Part B (which provides medical insurance) don’t cover everything - expenses not covered by them can actually lead to personal bankruptcy. That’s where Medicare supplement health insurance comes in.

Medicare Supplement (or “Medigap”) Plans:

Help pay for healthcare expenses beyond what Original Medicare (Part A & Part B) covers. Depending on the policy, they’ll cover copayments, coinsurance, deductibles, and emergency care when traveling outside the U.S. Unless specified by the private insurer, Medigap plans pay 100% of covered expenses after Original Medicare pays its share.

Buying a Medicare Supplement plan can be a smart decision for both your health and your finances; however, finding and choosing a policy can be overwhelming. This guide will explain the plans available in most states and help you determine which is best for you. 

Medicare Supplement Must-Knows 

Unlike Original Medicare (Medicare Part A & Part B) which comes from the federal government, Medicare Supplement plans are sold by private companies.

Medicare Supplement plans are standardized, meaning all plans cover the same basic benefits.

Plans are labeled “A” through “N”. Additional benefits are provided under each of these plans. These additional benefits are also standardized. (For example, all Plan A policies must provide the same additional benefits - the only difference between Plan A policies is the insurer and the price.)

What You Need to Know About Medicare Supplement / Medigap Plans 

You Must Have Original Medicare

-You must have Medicare Part A and Part B to enroll in a Medicare Supplement plan. Medicare Supplement plans cannot be used with a Medicare Advantage policy (Medicare Part C). 

Individual Plans Only - Not a Family Plan

-Medicare Supplement coverage is available only to individuals. You and your spouse must complete an individual application. 

Separate Payment from Original Medicare

-You will pay a private insurance company for Medicare Supplement coverage. This payment is separate from your Medicare payment to the federal government. 

No Prescription Drug Coverage

-Medicare Supplement plans sold after Jan. 1, 2006 do not include prescription drug coverage. 

Medicare Supplement Covers the Costs of Basic Medicare Benefits Covers: Basic Medicare benefits (including Part A coinsurance, Part B coinsurance & copayment, hospital costs, hospice care, and preventative care). Additional benefits depending on the plan. 

Basic Medicare Benefits Doesn’t Cover: Long-term care, dental, vision, hearing aid or other types of lifestyle bills typically are not covered. 

Medicare Supplement Plans Are Standardized for Easy Comparison This makes it easier to compare options based on premium cost. Make sure you enroll in a Medicare Supplement plan from a company you trust - one with good financial strength and high-quality customer service. 

See Any Doctor That Takes Medicare

You can choose to see any doctor or healthcare provider that accepts Medicare. This is different from Medicare Advantage plans which, like HMOs or PPOs, have networks of healthcare providers (doctors, hospitals, and facilities) that you’re limited to. 

Billing and Claims Are Coordinated with Medicare

The billing between Original Medicare and Medigap plans for covered Medicare services and products is automatically coordinated between Medicare and the insurance company. You will not have to file separate claims. 

When to Buy Medicare Supplement Insurance 

Open enrollment to buy Medicare supplement begins when you’re 

1.) over the age of 65 and  2.) enrolled in Medicare Part B. Open enrollment is available for 6 months afterwards. 

If you buy Medicare Supplement insurance during your 6-month Open Enrollment Period, then it automatically begins when you enroll in Medicare Part B for the first time. For many retirees, this is often when they turn 65. However, if you work past age 65, the clock starts whenever you elect to start your Part B coverage.

If you buy Medicare supplement insurance outside your Open Enrollment Period, you will be subject to “underwriting”. That means you can be denied coverage or charged more due to preexisting health conditions or due to your health history.

Once you have a standardized Medicare Supplement plan, it is guaranteed renewable, even if you have health problems. As long as you pay the premium, your policy cannot be cancelled.