Medicare Supplement (Medigap) Policies Explained

What Is a Medicare Supplement Policy?

Medicare Supplement insurance, commonly called Medigap, is sold by private insurance companies to help cover costs that Original Medicare (PartA and PartB) does not fully pay. These policies can pay for:

• Coinsurance and deductibles
• Hospital and medical expenses that exceed Medicares standard payments
• Some foreigntravel emergency care (depending on the plan)

Medigap does not provide prescriptiondrug coverage; that is the role of Medicare PartD.

Who Can Purchase a Medigap Policy?

You must be enrolled in both Medicare PartA and PartB to buy a Medigap plan. The best time to enroll is during your Medicare Initial Enrollment Period (the first 6 months after you turn 65) or during the Medicare Open Enrollment Period (the 6month span that begins the month you first enroll in PartB). Outside these windows, you may pay higher premiums or be denied coverage because of preexisting conditions.

Standardized Medigap Plans

Since 1992, most states have used standardized plan letters, which means the benefits of a PlanC in Florida are the same as a PlanC in Texas. The letters currently available are:

1. Plan A Basic coverage; pays PartA deductible, PartB coinsurance, and hospital stay coinsurance.
2. Plan B Adds the PartA deductible to PlanA.
3. Plan C Includes all of PlanB plus coverage for the PartB deductible, skilled nursing facility (SNF) coinsurance, and foreign travel emergency care (this plan is no longer sold to new beneficiaries in most states).
4. Plan D Similar to PlanC but does not cover the PartB deductible.
5. Plan F The most comprehensive plan, covering all gaps except the PartB deductible (no longer available to new enrollees after Jan12020).
6. Plan G Covers everything PlanF does except the PartB deductible.
7. Plan K Provides partial coverage with a 50% coinsurance on many benefits.
8. Plan L Similar to PlanK but with a 75% coinsurance.
9. Plan M Like PlanF but does not cover the PartA deductible.
10. Plan N Covers most benefits; requires a small copayment for certain office visits and emergency room stays.

Only PlansA, B, D, F, G, K, L, M, and N are currently available to new Medicare beneficiaries. PlanC is still offered in a few states.

How Medigap Premiums Are Determined

Premiums vary widely based on:

• State of residence
• Insurance carrier
• Age at purchase
• Gender (in a few states)
• Smoking status (some carriers)

Insurers may use three pricing structures:

1. Community-rated Same premium for all enrollees, regardless of health.
2. Issue-age-rated Premium based on age when you first buy a Medigap plan.
3. Attained-age-rated Premium increases as you get older.

Compare quotes from multiple carriers to find the most affordable option that meets your needs.

Key Benefits of Adding a Medigap Policy

Predictable OutofPocket Costs

Because Medigap pays most or all of the costs that Original Medicare leaves uncovered, you can better anticipate your medical expenses each year.

Freedom to Choose Providers

Medigap plans work with any doctor or hospital that accepts Medicare. You do not need referrals or network approvals.

No Need for Annual Renewals

Unlike many private health plans, Medigap policies are guaranteed renewable as long as you continue to pay premiums. You cannot be dropped for health reasons.

Coverage While Traveling in the U.S.

All Medigap plans cover you anywhere in the United States, which is valuable if you spend time away from your home state.

Considerations Before Buying

• Do you need prescriptiondrug coverage? Youll still need a separate PartD plan.
• Will you travel abroad? Only PlansC, D, F, G, and N provide foreign travel emergency coverage.
• What is your budget? The most comprehensive plans have higher premiums; evaluate whether youll benefit from the extra coverage.
• Do you expect high medical utilization? If you anticipate frequent hospital stays, a higherbenefit plan such as G or N may save money in the long run.

How to Enroll

1. Confirm eligibility You must have PartA and PartB.

2. Choose a plan letter Review the benefits table on Medicare.gov.

3. Shop around Get written quotes from at least three insurers.

4. Complete the application Provide personal information, Medicare numbers, and answer health questions (if required).

5. Pay the premium Most carriers allow monthly, quarterly, or annual payments.

6. Receive confirmation Your policy will start on the first day of the month after your application is approved.

Common Misunderstandings

Medigap replaces Medicare. False. Medigap works *with* Medicare; you must keep PartA and PartB active.

I can switch plans anytime. Not exactly. While you can change carriers during the annual Open Enrollment Period (Oct15Dec7), switching between plan types (e.g., from G to N) may be limited.

All Medigap plans cost the same. Incorrect. Different plan letters have different benefit levels, and premiums vary by insurer.

Resources for Further Help

• Medicare.gov Medigap Overview
• State health insurance assistance programs (SHIP) free counseling
• National Council on Aging ncoa.org
• Local senior centers and libraries often host Medicare workshops.