What Is a Medicare Supplement?

When it comes to Medicare, things can get confusing really quickly. And while “Medicare Supplement” is a widely used term, we know that not everyone is on the same page.

In this article, we’ll explain everything you wanted to know (and perhaps didn’t want to know) about Medicare Supplement plans. For starters, Medicare Supplements go by many names:

• Medicare Supplement
• Medigap
• Med Supp
• Med Sup
• Supplemental Insurance

A Medicare Supplement is an insurance policy that pays for some of the remaining health care costs that Medicare alone doesn’t cover, such as copayments, coinsurance, and deductibles.

Other perks of a Medicare Supplement policy include medical care when you’re travelling internationally, coverage for excess medical charges, and blood.

It’s important to know that a Medicare Supplement only approves charges that Medicare approves. If an item or service isn’t already approved by Medicare – such as dental care, vision exams, or nursing home stays – a Medicare Supplement won’t approve it either.

When Can You Get a Medicare Supplement?

If you’re eligible for Medicare, you’re eligible for a Medicare Supplement. You become eligible for Medicare at age 65, and possibly sooner if you have a disability.

The month you turn 65, you’re eligible for the open enrollment period. This lasts for the next 6 months. For example, if you turn 65 in January and enroll in Medicare Part B, you can purchase a Medigap policy from January to June. (Read more about eligibility here.)

Even if you’re 65, though, you can choose to put off signing up for Medicare. For example, if you’re on a group plan provided by your employer, and you don’t plan on retiring just yet. (You can read more about working past 65 here.)

A few things to know about applying for a Medicare Supplement:

• In order to have a Medicare Supplement, you must have Medicare Parts A and B.
• You cannot have a Medicare Supplement if you’re on a Medicare Advantage Plan.
• It’s illegal for anyone to sell you a Medicare Supplement if you have a Medicare Medical Savings Account (MSA) Plan.

How Is a Medicare Supplement Different From Other Insurances?

A Medicare Supplement is designed to work with Medicare. You can think of it as a partnership.

For example, if you have a $1,000 bill from a doctor visit, Medicare will pay 80% of the approved charges and a Medicare Supplement insurance will pay all or part of the remaining 20% (depending on which supplement you choose).

In other words, Medicare gets the bill first, and they pay their portion. Then, they send the rest of the bill to your Medicare Supplement, and it picks up the remaining amount.

A Medicare Supplement is NOT:

• A Medicare Advantage Plan
• A Medicare Prescription Drug Plan
• Medicaid
• TRICARE or CHAMPVA
• Long-term care insurance
• Indian Health Service, Tribal, and Union Indian Health plans
• Employer or union plans

A Medicare Supplement works with Medicare only. If you don’t have Medicare, you can’t have a Medicare Supplement.

Are There Different Types of Medicare Supplements?

A Medicare Supplement is a blanket term for an insurance plan that picks up the leftover costs of Medicare.

However, there are different types of Medicare Supplements.

These plans are organized by using a lettering system – A, B, C, D, F, G, K, L, M, and N.

Each letter represents a different set of benefits. Some supplements offer more coverage than others, and those plans are generally cheaper to purchase.

Nowadays, the most popular plans are F, G, and N, because they offer the most coverage. Plan F offers comprehensive coverage, meaning that you’ll never get a bill for any Medicare-approved charges. Plan F is also the most expensive to purchase.

Plan G is known as the best deal, because it offers almost as much coverage as a Plan F, but it has significant savings, offering more value for your money.

Plan N offers great coverage except for a few things:

• Like Plan G, it doesn’t pick up the Medicare Part B deductible
• It doesn’t pick up Medicare Part B excess charges
• It only covers up to 80% of medical costs while you’re travelling internationally
• You must pay up to a $20 copayment for office visits and up to $50 for emergency room visits

Plan N is cheaper, making a good choice for those with a tight budget.

How Much Do Medicare Supplements Cost?

Like most insurances, the cost of Medicare Supplements vary.

Download the Medicare Cost Worksheet

We hate to be vague, so we will include some examples, but here are some of the factors that go into policy rates:

• Your age (younger=cheaper)
• Your zip code (price varies)
• Whether you’re a tobacco user or not (non-tobacco=cheaper)
• Gender (female=cheaper)

Here are some sample rates to give you a ballpark range of how much Medigap plans cost.

For this example, we’ll be using a Kansas zip code for a non-tobacco user who is 65 years old. The most competitive rate is shown.

Not sure what a Medicare Supplement would cost you? Let us do some rate shopping on your behalf.

Interested in insurance coverage, but not sure about the price? Get a Quote Now.