Get To Know Medicare Supplement Insurance

Medicare coverage comes with several gaps. These gaps represent money you will spend out of pocket, and they can really add up. As an independent health insurance agent, I help my clients close some of these gaps.

One of the easiest ways is with Medicare Supplement Insurance. In this article, I’ll review all the basics of Medicare Supplement insurance and dive in to a few of the more advanced topics, too.

Have questions about Medicare? Want to review the Medicare Supplement plans available in your area? Start with a free, no-obligation consultation. We can chat by phone or by email – no face to face contact is needed. Need an answer right away? Give me a call or text at 858-248-0337, or click the button below.

What Is Medicare Supplement Insurance?

Medicare Supplement Insurance is a policy issued by a private insurance company that covers some or all of the gaps in Original Medicare. These plans work with Original Medicare – they do not replace it. Because these policies fill in the gaps in Original Medicare, they’re often called Medigap plans.

Since Medigap plans are issued by private insurance companies, you will have to pay a premium directly to them. This is in addition to your Part B premium, which you must continue to pay while you have Medigap coverage.

One other thing you need to keep in mind is that Medicare Supplement plans don’t cover prescription drugs, so you’ll need to add Part D drug coverage.

What Medicare Supplement Plans Are Available?

Medicare Supplement Insurance plans are standardized across 47 of the United States. Minnesota, Wisconsin, and Massachusetts have their own plans and regulations. In this article, we’ll focus on the 47 standardized States.

The standardized plans are known by letter: Plans A, B, C, D, F, G, K, L, M, and N. There are also high deductible versions of Plans F and G. Below is a quick summary of what each plan does and doesn’t cover.

Medicare Supplement Plan A

Plan A is the least comprehensive and least expensive of the Medigap Plans. Plan A covers:

• 100% of Part A co-insurance for hospital stays
• Up to 365 additional hospital days after Original Medicare benefits are used up
• 100% of Part B co-insurance
• 100% of the cost for your first 3 pints of blood
• 100% of Part A co-insurance for hospice care

Plan A doesn’t cover these gaps:

• Part A skilled nursing facility care co-payments
• Part A deductible
• Part B deductible
• Part B excess charges
• Foreign travel emergency coverage

Medicare Supplement Plan B

Plan B covers everything that Plan A does, plus 100% of the Part A deductible. Plan B doesn’t cover:

• Part A skilled nursing facility care co-payments
• Part B deductible
• Part B excess charges
• Foreign travel emergency coverage

Medicare Supplement Plan C

Plan C is a comprehensive plan. In addition to the gaps covered by Plan B, Plan C covers:
• 100% of Part A skilled nursing facility care co-payments
• Part B deductible
• Foreign travel emergency coverage

The only gap not covered by Plan C is Part B excess charges. Note that Plan C is not available to people who first become eligible for Medicare after January 1, 2020. If you were eligible before that date, you can still enroll in Plan C.

Medicare Supplement Plan D

Medigap Plan D also offers comprehensive coverage. With Plan D, all the gaps are closed except for:

• Part B deductible
• Part B excess charges

All other gaps, including foreign emergency travel are covered by Plan D.

Medicare Supplement Plan F

This is the most comprehensive Medigap plan available. Plan F covers 100% of every gap in Original Medicare. With Plan F, you might never pay out of pocket for medical services. For this reason, this plan has earned the nickname “Plan Fabulous.”

Like Plan C, though, Plan F is not available to people who become eligible for Medicare after January 1, 2020. If you already have Plan F you can keep it.

Medicare Supplement Plan G

Plan G is commonly seen as the replacement for Plan F. It is the most comprehensive plan available to people eligible for Medicare after January 1, 2020.

Plan G covers 100% of every Medicare gap except for the Part B deductible. You will have to pay the first $198 (for 2020) in Part B costs out of pocket. After you’ve paid that much, Plan G covers every other Medicare-approved expense. Plan G also covers foreign travel emergencies.

Medicare Supplement Plan K

Plan K is structured very differently from the plans we’ve reviewed so far. Plan K provides the following coverage:

• 100% of Part A co-insurance for hospital stays
• Up to 365 additional hospital days after Original Medicare benefits are used up
• 50% of Part B co-insurance
• 50% of the cost of your first 3 pints of blood
• 50% of Part A hospice care co-payments
• 50% of Part A skilled nursing facility care co-payments
• 50% of Part A deductible
• Out Of Pocket Maximum is $6,220 for 2021

Plan K provides no coverage for:

• Part B deductible
• Part B excess charges
• Foreign travel emergency coverage

Medicare Supplement Plan L

Plan L is very similar to Plan K except for the percentage of coverage and the out of pocket maximum:

• 100% of Part A co-insurance for hospital stays
• Up to 365 additional hospital days after Original Medicare benefits are used up
• 75% of Part B co-insurance
• 75% of the cost of your first 3 pints of blood
• 75% of Part A hospice care co-payments
• 75% of Part A skilled nursing facility care co-payments
• 75% of Part A deductible
• Out Of Pocket Maximum is $3,110 for 2021

Plan L leaves the same gaps uncovered as Plan K.

Medicare Supplement Plan M

Plan M covers these gaps:

• 100% of Part A co-insurance for hospital stays
• Up to 365 additional hospital days after Original Medicare benefits are used up
• 100% of Part B co-insurance
• 100% of the cost of your first 3 pints of blood
• 100% of Part A hospice care co-payments
• 100% of Part A skilled nursing facility care co-payments
• 50% of Part A deductible
• Foreign travel emergency coverage

Plan M does not cover these gaps:

• Part B deductible
• Part B excess charges

Medicare Supplement Plan N

Medigap Plan N is similar to traditional employer-provided or group health insurance. This plan incorporates small co-payments into your coverage:

• 100% of Part A co-insurance for hospital stays
• Up to 365 additional hospital days after Original Medicare benefits are used up
• Up to $20 co-payment, then plan covers 100% of Part B co-insurance Plan N also has a co-payment of up to $50 for emergency room visits (waived if you’re admitted for an inpatient stay)
• 100% of the cost of your first 3 pints of blood
• 100% of Part A hospice care co-payments
• 100% of Part A skilled nursing facility care co-payments
• 100% of Part A deductible
• Foreign travel emergency coverage

Plan N does not close these gaps:

• Part B deductible
• Part B excess charges

You can see from all of these coverage details that Medicare Supplement Insurance either provides a hard out of pocket maximum (Plans K and L), or covers the costs that are likely to be the most expensive (additional hospital stay days and Part B co-insurance).

Who Is Eligible For Medicare Supplement Insurance?

The most basic way to define eligibility for Medigap is to say that you must be enrolled in Parts A and B of Original Medicare. With that said, most of the 47 Standardized Medigap States require you to be at least 65 years old to enroll in Medigap.

If you’re in Medicare early, whether due to disability or illness, you may not be eligible for Medicare Supplement Insurance until you’re 65 or older.

When Can I Sign Up For Medicare Supplement Insurance?

It’s very important that you sign up for Medigap coverage at the right time. As we discussed earlier, you generally must be at least 65 years old to enroll. Now we’ll look at your enrollment options.

Everyone who’s eligible for Medicare is entitled to a Medigap Open Enrollment Period. This window lasts for six months and begins when both of these are true:

• You are age 65, and
• You are enrolled in Part B of Original Medicare

Remember, these both have to be true for you to be in your Medigap Open Enrollment period. For many people, their enrollment period begins when they turn 65, because that’s when they elect to start Part B coverage.

However, if you delay taking Part B – usually because you’re still working and you have health insurance from your employer – your Medigap Open Enrollment Period won’t start until you actually enter Part B. Even if you wait until you turn 70, you won’t miss your open enrollment window just because you choose to delay taking Part B.

Why is the Open Enrollment Period so important? Because this is your chance to get Medicare Supplement Insurance under “Guaranteed Issue” conditions. This means that you can’t be turned down, or charged a higher premium for coverage.

In other words, you have a right to buy a Medigap policy at the lowest available premium during your Open Enrollment Period. If you pass on this opportunity, you still have the right to apply for Medigap coverage, but you may have to go through underwriting.

During underwriting, you will have to answer health related questions. Your coverage can be denied, or you could pay a higher premium due to pre-existing health conditions. For this reason it is a great idea to get Medigap coverage when you are first eligible.

For the same reason, it can be difficult to switch Medicare Supplement policies. Some insurance companies allow you to change from one standardized Plan to another once per year, on your birthday, without underwriting. This is called the Birthday Rule. Note that this rule is not available in every State.

Other than the birthday rule, or a special Guaranteed Issue period (more below), you would have to go through underwriting in order to change from one Medigap Plan to another, or from one insurance company to another.

For instance, if you wanted to switch from Company X Plan G to Company A Plan G, you would have to go through underwriting, and you might be turned down. In some States, you’ll have to go from underwriting just to switch from Company A Plan G to Company A Plan N.

Obviously, applying for Medicare Supplement Insurance with Guaranteed Issue conditions is best. For that reason, there are some special situations where you’ll be able to get Medigap coverage with Guaranteed Issue, even after your Open Enrollment Period ends.

Note that these are special situations, and some of them can be fairly tricky. If you’re not sure you qualify, talk to an independent insurance agent or your State’s Department of Insurance to find out. You can qualify for a second Guaranteed Issue period if any of these apply to you:

• You permanently moved out of your Medicare Advantage plan’s service area
• You enrolled in a Medicare Advantage plan when you were first eligible, and you drop it within 12 months of enrolling
• You dropped Medigap coverage to enroll in Medicare Advantage, and you drop your Medicare Advantage coverage within 12 months of enrolling
• Your Medicare Advantage plan’s contract with CMS is not renewed
• Your Medigap company goes bankrupt
• Others may apply in some situations

Is Medicare Supplement Insurance Right For Me?

Medigap coverage can be a great tool, but it’s not for everyone. There’s no doubt that it’s more expensive than most Medicare Advantage plans. However, Medigap may be a good fit for you in some cases. To find out, ask yourself these questions:

• Can I afford the premium?
• Do I travel outside the United States frequently?
• Do I want or need the ability to see any doctor, anywhere in the US (as opposed to relying on network doctors)?
• Can I afford to add supplementary coverage like dental, vision, and hearing? Or pay cash for these services?

If you answered mostly “yes” to these questions, then Medicare Supplement Insurance may be for you. If you want to take the next step and compare rates and benefits for plans in your area, request a free consultation today.

We’ll chat over the phone or by email and find a plan that works for you. We can even enroll you in the plan of your choice online and over the phone, with no face-to-face meeting needed. If you want to get started sooner, give me a call or text at 858-248-0337, or click the button below.

Please tell me what you think; did I answer your questions about Medicare Supplement Insurance? If not, let me know in the comments, or suggest a topic for a future article.