Basics of Medicare Supplement Plans

Medicare Supplement Plans, also known as Medigap Plans, are health insurance plans that work alongside your Original Medicare (Parts A and B) coverage to help reduce your out-of-pocket costs. They are often referred to as Medigap Plans as they help fill the coverage gaps left by Original Medicare. There are 10 types of Medigap plans available from private insurance companies.

How do Medicare Supplement Plans work?

Medicare Supplement Plans are designed to help pay the out-of-pocket costs left by Original Medicare coverage. When you apply for a Medigap plan you’ll choose from one of the 10 types available and you’ll pay a Medigap premium in addition to your Original Medicare premium. Your Medigap Provider will then, depending on the benefits offered by your chosen plan, help cover your out-of-pocket healthcare costs.

What do Medicare Supplement plans cover?

Medicare Supplement Plans help cover out-of-pocket costs for Original Medicare Parts A and B. Coverage offered varies between plan types. Insurers can offer up to ten types of plans, which are labeled A, B, C, D, F, G, K, L, M, N, but they do not have to offer all ten different plan options. The benefits offered between the plan types vary, so for example Plan B offers different coverage than plan G. However, the plans are regulated so that each plan type of the same letter must offer the same coverage. This means that a Plan type A offered by one insurer will provide the same benefits as a Plan type A from another insurer making it easy to compare plans from different carriers.

This Medicare Supplement comparison chart below shows how coverage varies between plans:

Source: Medicare.gov
*Plans F and G also offer a high-deductible plan in some states. With this option, you must pay for Medicare-covered costs (coinsurance, copayments, and deductibles) up to the deductible amount of $2,490 in 2022 ($2,370 in 2021) before your policy pays anything. (Plans C and F aren’t available to people who were newly eligible for Medicare on or after January 1, 2020.)
**For Plans K and L, after you meet your out-of-pocket yearly limit and your yearly Part B deductible, the Medigap plan pays 100% of covered services for the rest of the calendar year.
***Plan N pays 100% of the Part B coinsurance, except for a copayment of up to $20 for some office visits and up to a $50 copayment for emergency room visits that don’t result in inpatient admission.

A Medigap plan works with your Original Medicare and can only be used to help cover the gaps left by Parts A and B. You cannot enroll in a Medigap plan if you have coverage through a Medicare Advantage plan.

Where can I enroll in a Medicare Supplement Plan? 

Medigap Open Enrollment Period

You can first enroll in a Medicare Supplement Plan during your Medigap Open Enrollment Period (OEP). Your Medigap OEP lasts for 6 months and starts the first day of the month of your 65th birthday and are enrolled in Medicare Part B. Your Medigap OEP provides you with 3 very important benefits:

  • You are guaranteed enrollment in the Medigap plan of your choice (as long as it is available in your area).
  • You cannot be charged more because you have pre-existing conditions.
  • Your coverage starts immediately (you may have to wait for 6 months for coverage for a pre-existing condition but expenses other than out-of-pocket costs will still be covered by Original Medicare).

If you miss your Medigap Open Enrollment Period

If you wait to apply and miss your Open Enrollment Period you may not be able to enroll in a Medigap Plan. Insurers may require you to undergo a physical exam and may increase your premium if you are considered a higher risk due to your health.

Why choose a Medicare Supplement Plan?

Adding Medicare Supplement coverage to your Original Medicare helps reduce your out-of-pocket costs. By helping you pay your copays, deductibles and coinsurance payments it gives you additional coverage. Depending on the type of Medicare Supplement plan you choose it may also have additional coverage such as coverage for medical expenses while travelling abroad.

Who’s eligible for a Medicare Supplement Plan?

To be eligible for a Medigap policy you must be enrolled in both Part A and Part B of Original Medicare and not be planning to stay enrolled in a Medicare Advantage plan. You can apply for a Medigap Plan while you are enrolled in a Medicare Advantage plan as long as you are leaving that plan and returning to Original Medicare coverage.

How much do Medicare Supplement Plans cost?

In addition to your location the cost of a Medicare supplement plan premiums can be set in three ways:

  1. Your age when you first sign up for coverage
  2. Your current age
  3. Not age related: everyone pays the same premium