What Are Medicare Supplements
Medicare Supplement Insurance, also called Medigap policies, are policies that private companies sell to reduce the costs of Medicare for consumers. Medicare Parts A and B cover many situations, but they may not cover them 100% and they may not cover them all. Medigap policies fill in those gaps in coverage.
What Medicare Supplements Cover
While each plan is reviewed in detail on the Medicare Supplement Plans page, it is useful to review what they generally cover. Generally, Medigap policies cover the things you are responsible for paying for in Original Medicare. These include deductibles and costs after you run out of benefits, such as hospital and Skilled Nursing Facility costs after you run out of Medicare-covered days.
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How Medicare Supplements Work
To purchase a Medigap policy, you must have Medicare Parts A and B. The insurance companies must follow federal and state law. They are only authorized to sell certain standardized plans that offer the same basic benefits. These plans are labeled A, B, C, D, F, G, K, L, M, and N. The company and plan you choose will have varying coverage and costs. Once you buy the Medigap policy, you are responsible for paying the monthly premium to that insurer on top of your premium for Medicare Part B.
Once you have the plan, your Medigap insurer pays for the costs that Medicare would normally charge you. This could be the co-insurance required by a doctor for a doctor’s visit or additional inpatient hospital days.
Limitations of Medigap Policies
Some Medigap policies instated before 2006 also cover Part D, but you have to check with each plan. It is important to note that you cannot have Medicare Part D and Medigap policy prescription drug coverage simultaneously. You can only have one.
Additionally, these plans only apply to one person, so your spouse must buy a separate plan. Also, costs may go up for the Medigap policies as you get older, depending on the insurance company.