There are 10 standardized Medicare Supplement insurance plans, labeled A through N, offered in 47 states (with Minnesota, Massachusetts, and Wisconsin having different regulations). Insurance companies must offer at least Plan A, but are not obligated to offer all 10 plans. It is important to distinguish between the “parts” of Medicare, like Part A and Part B, and the Medicare Supplement Insurance Plans labeled A, B, and so on.
How Does Medicare Supplement Insurance Work?
Medicare Supplemental insurance plans provide various levels of basic benefits that must include standardized benefits, regardless of location or insurance company, with the exception of Massachusetts, Minnesota, and Wisconsin. However, these plans are not required to cover services such as vision, dental, long-term care, or hearing aids. The standardized benefits encompass coverage for Medicare Part A coinsurance expenses, Medicare Part A hospice care coinsurance/copayments, Medicare Part B coinsurance/copayments, and the first three pints of blood used in a medical procedure. The most comprehensive plan available, Medicare Supplement Insurance Plan F, includes additional benefits, such as coverage for Medicare Part A and Part B deductibles, Part B excess charges, Part B preventive care coinsurance, Skilled Nursing Facility care coinsurance, and foreign travel emergency care. In essence, these plans aim to cover the remaining 20% of the medical costs for beneficiaries that Original Medicare does not cover, as Original Medicare only covers 80% of the services. Therefore, Medigap policies always work in conjunction with Original Medicare coverage.
Eligibility And Enrollment For Medigap Policies
To be eligible for a Medicare Supplement insurance plan, you need to be enrolled in both Medicare Part A and Part B. The ideal time to enroll is during the Medigap Open Enrollment Period, which begins the month you turn 65 and are enrolled in Part B, and it lasts for six months. During this window, you are guaranteed enrollment, and you cannot be turned down for coverage because of any pre-existing conditions, though you may face a waiting period. If you miss this enrollment period, you may face coverage denial or higher premiums based on your medical history. However, unlike other Medicare coverage, Medicare Supplement insurance does not have any enrollment restrictions. As long as you are enrolled in Original Medicare Parts A and B, you can apply for a Medicare Supplement plan at any time.
Medicare Supplements Costs
The cost of Medicare Supplement insurance is not fixed, as private Medicare-approved insurance companies set their premiums based on different pricing methods. These pricing methods include community no-age-rated (where the same premium is charged to all members), issue-age-rated (where the premium is lower for younger members at enrollment), and attained-age-rated (where premiums increase as members get older). The cost of Medicare Supplement insurance can be influenced by several factors, including discounts, medical underwriting, specific provider use with the Medicare Select Plan, and high deductible options for Plans F and G. Premiums can also increase due to factors such as age, inflation, and other reasons.
Medigap Policies Types
As already established there are 10 standardized policies, and each letter provides a different level of coverage. Your coverage options in general are:
Medigap Plan A
Plan A offers coverage for hospitalization and hospice care coinsurance, as well as some Medicare Part B expenses, and provides coverage for the first three pints of blood per year. It is the most affordable and least comprehensive among all the Medigap plans, and is suitable for individuals who prioritize a low monthly premium and are not overly concerned about hospital costs. On average, the cost of this plan ranges from $110 to $180 per month, although it may be higher in states with a high cost of living. It is important to note that this plan is not recommended for individuals who plan to travel outside of the United States.
Medigap Plan B
Plan B provides coverage for expenses that are not included in Original Medicare, such as out-of-pocket expenses for Part B, coinsurance for preventive care, the first three pints of blood, out-of-pocket expenses for hospital care, and copayments/coinsurances for hospice care under Part A. It may be a suitable choice for individuals who have good health, do not travel outside of the United States, and seek to reduce their premium costs. On average, the monthly premium ranges from $110 to $210.
Medigap Plan C
Plan C is a popular option that provides coverage for most expenses not covered by Original Medicare, with the exception of Part B excess charges. It includes benefits for doctor and hospital visits, foreign travel, and more. The average monthly premium for this plan ranges from $140 to $420. Plan C may be the most suitable choice for individuals who have frequent hospital visits, travel internationally, and can afford a higher monthly premium. The cost may be higher in states with a high cost of living. Plan F offers more comprehensive coverage than any other plan, but it is not available to new Medicare beneficiaries who were not eligible prior to January 1, 2020.
Medigap Plan D
For a moderate premium, usually ranging from $120 to $200 per month, this plan provides a satisfactory level of coverage. It includes expenses for hospital and hospice care, Medicare Part A deductible, Part B coinsurance and copayment, coinsurance for skilled nursing facility care, and emergency medical care when traveling abroad. Nonetheless, it does not cover Part B deductible and excess charges, dental, vision, hearing care, or prescription drugs. The premium for Plan D may fluctuate depending on the cost of living in a specific state.
Medigap Plan F
The most comprehensive plan available to Medicare enrollees who enrolled prior to January 1, 2020, offers extensive coverage across a range of costs. This plan includes coverage for the Part A deductible, as well as coinsurance and costs associated with hospital and hospice care. Additionally, it covers the Part B deductible and coinsurance, SNF care coinsurance, three pints of blood annually, and emergency healthcare for up to 60 days while abroad. However, this plan does not provide coverage for prescription drugs, dental, vision, and hearing care, or cosmetic procedures. The average monthly premium for Medigap Plan F ranges from $150-$400, with higher premiums in states with a higher cost of living.
Medigap Plan G
Plan G is the second most comprehensive Medicare supplement plan, offering coverage for a wide range of costs and helping to reduce out-of-pocket expenses. Although it does not cover as much as Plan F, it does provide coverage for the Part A deductible and coinsurance associated with hospital and hospice care, Part B coinsurance and copayments, the first three pints of blood annually, 80% of foreign travel exchange costs, and SNF care. However, it does not cover the Part B deductible, dental, vision, and hearing care, or cosmetic procedures. Plan G is a suitable option for new Medicare beneficiaries and is considered one of the best choices for all Medicare beneficiaries. The average monthly premium for this plan ranges from $100-$300.
Medigap Plan K
Plan K is a cost-sharing Medicare supplement plan that features a lower monthly premium, but provides coverage for only 50% of the costs. It is one of two plans that have a maximum out-of-pocket limit. Plan K covers 50% of the Part A coinsurance, hospice coinsurance and deductible, 50% of the Part B coinsurance and copayments, 50% of the first three pints of blood each year, and 50% of the SNF care coinsurance. Once the out-of-pocket limit of $6940 is reached in 2023, Plan K will cover the remaining costs. The average monthly premium for Plan K ranges from $40-$100.
Medigap Plan L
Plan L is another Medicare supplement plan that includes a maximum out-of-pocket limit, but it covers only 75% of the costs instead of full coverage. It provides coverage for 75% of the Part A coinsurance, hospice coinsurance and deductible, 75% of the Part B coinsurance and copayments, 75% of the first three pints of blood each year, and 75% of the SNF care coinsurance. Once the out-of-pocket limit of $3470 is reached in 2023, Plan L will cover the remaining costs. The average monthly premium for Plan L ranges from $100-$200.
Medigap Plan M
Plan M has low monthly premiums and is ideal for individuals who are not worried about out-of-pocket expenses. It provides coverage for coinsurance, copayments, deductibles, and certain foreign travel costs. However, it does not cover Part B deductibles or excess charges. On average, the monthly premium falls within the range of $120 to $200.
Medigap Plan N
Plan N is well-liked because of its lower premiums compared to Plans F and G, as well as its extensive coverage of medical expenses. It provides coverage for deductibles, coinsurance, copayments, and certain foreign travel expenses, but it does not cover the Part B deductible or Part B excess charges. On average, the monthly premium for this plan falls within the range of $120 to $180.