Medicare Supplements, also called Medigap plans, are insurance policies private insurance companies offer to fill the “gaps” after Original Medicare pays it’s portion of approved medical expenses. Understanding what Medicare Supplements cover is essential for Medicare agents and anyone considering enrollment in a Medigap plan to reduce healthcare costs and enhance Medicare benefits.
Medicare Supplement plan overview
Medicare Supplement plans are standardized by the federal government, meaning the coverage provided by each plan of the same name (Ex. all Plan Ns) is the same across all insurance carriers. However, premiums vary based on provider and service area. There are 10 standard Medigap plans available in many states, labeled A, B, C, D, F, G, K, L, M, and N. Each plan letter provides a different level of coverage to meet varying healthcare needs and budgets.
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What Medicare Supplements cover
Medicare Supplement plans provide coverage once Original Medicare pays its portion of the cost for approved healthcare costs. See below for what Medicare supplements cover:
Medicare Part A coinsurance for hospital costs
All Medigap plans cover the coinsurance for hospital costs under Medicare Part A for up to an additional 365 days after Medicare benefits are exhausted.
Medicare Part B Coinsurance or Copays
Many Medigap plans cover the 20% coinsurance for outpatient services under Medicare Part B. Plan K and Plan L provide partial coverage, while Plan N may require a small copay.
Blood (First 3 Pints)
Original Medicare does not cover the first three pints of blood needed for some medical procedures. Medigap plans cover this expense.
Part A Hospice Care Coinsurance
Hospice care is covered by Medicare, but beneficiaries may have to pay coinsurance for certain medications and respite care. Medigap plans cover these costs.
Skilled Nursing Facility (SNF) Coinsurance
After 20 days in a skilled nursing facility, Medicare requires a daily coinsurance payment. Most Medigap plans cover this expense.
Medicare Part A Deductible
The Part A deductible for hospital stays can be substantial. Many Medigap plans, including Plans B, C, D, F, G, and N, cover this deductible.
Medicare Part B Deductible (Only for Plans C and F)
Plans C and F cover the Medicare Part B deductible; however, these plans are only available to beneficiaries who were eligible for Medicare before January 1, 2020.
Medicare Part B Excess Charges
If a healthcare provider does not accept Medicare’s approved amount as full payment, they may charge an additional amount of up to 15%. Plans F and G cover these excess charges.
Foreign Travel Emergency Care
Some Medigap plans (C, D, F, G, M, and N) provide coverage for emergency medical care during international travel, up to plan limits.
What Medicare Supplements don’t cover
Although Medigap plans cover many out-of-pocket expenses, there are some services they do not cover:
Prescription Drugs
Medigap plans do not include drug coverage. Beneficiaries must enroll in a Medicare Part D plan for prescription drugs.
Long-Term Care
Supplements do not cover services like custodial care in a nursing home or assisted living facility.
Dental, Vision, and Hearing
Routine dental, vision, and hearing services are not included in Medigap coverage.
Private-Duty Nursing
Typically, these services are not covered.
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What to consider when choosing a supplement
It is important to evaluate current healthcare needs and potential medical expenses to help determine the level of coverage needed. Budget is another big consideration before choosing a plan. One more important factor before enrollment is eligibility. Some plans require underwriting for anyone who is outside a guaranteed issue period. There are plans (C & F) that are no longer available to anyone who turned 65 after Jan 1, 2020.
Medicare Supplements provide invaluable financial protection by covering the out-of-pocket expenses left by Original Medicare. By understanding what these plans cover and how they work, you can make an informed decision that ensures peace of mind and comprehensive healthcare coverage. For those considering enrollment in a Medigap plan, a licensed Medicare agent can help provide guidance and compare options to find the plan that best meets coverage needs.