Supplemental Medicare Insurance Options

Medicare comes in four basic parts, called A, B, C, or Medicare Advantage, and D. All offer their own benefits and have their own sets of deductibles, copayments and coinsurance costs. In order to help meet these costs, many seniors purchase supplemental Medicare policies, also called Medigap. Medigap policies are standardized and offer the same benefits no matter which company sells them. Most states sell 10 Medigap policies, except for Wisconsin, Minnesota and Massachusetts, which are allowed to organize their Medicare supplemental plans differently.

Plan A

• Almost all states mandate that any insurance company that sells Medigap has to offer Plan A. Plan A is the least expensive but has the fewest number of benefits out of the standardized Medigap plans. In 2011, Plan A covered the Medicare Part B coinsurance costs, hospital coinsurance payments for an additional 365 days after regular Medicare benefits cease and the cost of the first three pints of blood per year.

Additional Benefits

• Other Medigap plans feature additional benefits as well as the basic benefits of Plan A. Plan B adds coinsurance payments for Part A hospice care. Part C has the same benefits as Plans A and B, plus it adds the coinsurance for skilled nursing facility services, coverage of the Part B deductible and benefits for foreign travel emergencies. Plan D and Plan G drop the Part B deductible benefit, but Plan G adds coverage for Part B excess charges.

Plans K, L, M and N

• Plans K, L, M and N work differently than the other Medigap options. They all cover the Part A deductible, skilled nursing facility coinsurance, blood, Part B coinsurance, the Part A hospice copay and the additional 365 days of hospital care. But K, L and M are cost-sharing plans, covering only a certain amount of each service. Plan M has 50 percent coverage of the Part A deductible, while all other benefits cover 100 percent. However, K has 50 percent coverage for almost all benefits. Plan L covers 75 percent. Plans K and L are the only Medigap plans with annual out-of-pocket limits. In 2011, these were $4,640 for Plan K and $2,320 for Plan L. Plan N is unusual in that it requires $20 copays for all office visits and $50 copays for emergency room visits.

Plan F

• Plan F offers all benefits available under the standardized Medigap plans. But it also usually has the highest monthly premiums. A high-deductible version of Plan F, with lower monthly premiums, can be purchased in most states. This Plan F has all the same benefits as the regular plan, but users must pay an annual deductible amount themselves before their policy begin paying benefits. In 2011, the annual deductible was $2,000.