Even though Medicare covers the bulk of your medical expenses after you turn 65, you’ll still find gaps in its coverage. A Medicare supplement policy, also called Medigap, can cover many of these expenses:
But deductibles aren’t all of it. You’ll still have to pay a portion of the costs for doctors’ services, long stays in a hospital or a skilled nursing facility, medical equipment, outpatient care and other services.
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Medicare pays its share of the Medicare-approved amount for your health care expenses first. Then Medigap kicks in to help cover your portion of the costs.
Medigap policies are sold by private insurance companies but regulated by federal and state governments. You’ll pay premiums to the Medigap company you choose, in addition to premiums you pay Medicare for Part A or Part B.
A big plus for Medigap is you can use any doctor or hospital that accepts Medicare, unlike private Medicare Advantage plans, which usually have provider networks and charge more or don’t cover out-of-network providers.
Pays the coinsurance. All Medigap plans cover the 20 percent Part B coinsurance you otherwise would pay yourself for physician visits and other outpatient services. They also cover the Part A coinsurance costs for inpatient hospital stays.
For example, Medicare covers the first 60 days as an inpatient in a hospital, but you’re responsible for paying the coinsurance for days 61 to 90 ($408 in 2024) and an $816 daily coinsurance after that for up to 60 lifetime reserve days in 2024.
Covers some deductibles. Most Medigap plans cover the Medicare Part A hospital deductible, which is $1,632 per benefit period in 2024.
Adds health benefits. Although Medicare won’t cover your hospital stay after you’ve used up your lifetime reserve, all Medigap policies cover the daily coinsurance costs and up to 365 additional lifetime days in the hospital after your Medicare benefits are depleted. All Medigap plans cover the first three pints of blood you may need each year, either in full or in part.
May cover other costs. Some plans pay coinsurance costs for skilled nursing facilities and hospice care; excess charges from doctors who don’t accept assignment, which means they can charge up to 15 percent more than the Medicare-approved amount; and foreign travel health care emergencies.
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It all comes down to the series of letters that designate each plan. In 1992, the federal government standardized the types of Medigap plans insurers can offer nationwide.
Today you have 10 options by letter: A, B, C, D, F, G, K, L, M and N. Every plan with the same letter designation must include the same coverage; premiums can vary from company to company.
Health & Wellness Free Rx discount card for use at over 66,000 pharmacies nationwide See more Health & Wellness offers >Even though the letter system offers standardized plans, it can be confusing. Plans C and F are only available to people who were eligible for Medicare before Jan. 1, 2020, even if they have not enrolled in Medicare yet.
In the past, Plan F had been the most popular Medigap policy. But a federal law passed in 2015 prohibited Medigap plans from covering the Medicare Part B deductible, and the same law also affected Plan C. If you’re looking for a similar Medigap policy, Plan G is the same as Plan F but doesn’t pay the Part B deductible.
Plans K, L, M and N have some cost sharing, often in return for lower premiums.And if you live in Massachusetts, Minnesota or Wisconsin, those three states created different systems for their plans.
No time restrictions. You can buy a Medigap policy anytime after signing up for Medicare Part A and Part B. Medigap plans have no annual open enrollment period like Medicare Part D and Medicare Advantage plans. But Medigap insurers in most states can reject you or charge more because of preexisting medical conditions unless you apply at certain times.
Special considerations. The best time to buy a Medigap policy if you’re 65 or older is within the six-month period that starts the first day of the month you enroll in Medicare Part B. During this time, insurers must offer you all the Medigap policies available in your area at the best rates for your age.
You also have several guaranteed issue rights, which means that you can buy a Medigap policy regardless of your health and under specific situations.
State differences. Your state may have other periods when you can buy Medigap policies without questioning your health.
In Connecticut, Massachusetts and New York, you can buy a Medigap policy anytime regardless of preexisting conditions. A few states let you switch policies without health questions during certain times of the year.
