Written By: Mike Olmos | Licensed since 2010 Print
Original Medicare, Parts A and B, pays for many of your health-care services and supplies, but it doesn’t pay for everything. That’s why you may want to consider getting a Medicare Supplement insurance policy, also called Medigap. A Medigap policy is sold by private insurance companies. These plans help pay some of the hospital and medical costs that Original Medicare doesn’t cover, such as copayments, coinsurance, and yearly deductibles. Some Medigap policies also help pay for a few services that Original Medicare doesn’t cover. Basically, a Medigap policy fills the “gaps” in Original Medicare coverage.
How do Medigap policies work with Medicare?
Medigap policies supplement your Original Medicare benefits, which is why these policies are also called Medicare Supplement plans. If you have Original Medicare and a Medigap policy, Medicare will pay first, as your primary insurance, and your Medigap policy will fill in the cost gaps. For example, suppose you have a $5,000 ambulance bill and have not yet met the yearly Medicare Part B deductible. Medicare Part B will pay 80% of your ambulance bill, minus the deductible amount. The Medigap policy would then pay your remaining 20% coinsurance of your $5,000 ambulance bill. Some Medigap policies also pay the remainder of the Medicare Part B deductible you still
Plans that don’t supplement Medicare coverage (aren’t Medigap policies)
It’s important to be aware of which plans are not supplements to your Original Medicare:
- Medicare Advantage plans (like an HMO or PPO)
- Medicare prescription drug plans (Part D)
- Employer’s or union’s plans
- Veterans’ benefits
- Long-term care insurance policies
What benefits do Medigap policies cover?
Currently, there are 10 standardized Medigap plans, each represented by a letter (A, B, C, D, F, G, K, L, M, N; there’s also a high-deductible Plan F). These are sold in most states (Massachusetts, Minnesota, and Wisconsin each have their own different set of Medicare supplement plans). Coverage levels and premiums vary, but the benefits of each plan within a lettered category remain the same despite the insurance company or location. For example, Plan A benefits are the same in New Jersey as they are in Oregon.
In general, Medigap policies cover the following benefits:
- Medicare Part A coinsurance and hospital costs (up to an additional 365 days after Medicare benefits are used)
- Medicare Part B coinsurance or copayment*
- Blood (first 3 pints)*
- Part A hospice care coinsurance or copayment*
(*Coverage may be partial for some plans.)