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Explanation of Medicare Supplements

Medicare is a federal social insurance program, aimed primarily at citizens aged 65 years or older. Original Medicare comes in Parts A and B, which cover mainly hospital and preventive services. Original Medicare does not cover all possible medical benefits, however, which leads many people to purchase additional policies for prescription drug coverage, vision, dental and other services. In 2010, there are ten standard Medicare supplement plans, called Medigap, although some states do not allow them all to be sold.

  1. Open Enrollment

    • Though it is possible to attempt to buy Medigap plans at any time, if you join during your open enrollment period, you cannot be refused, charged more because of pre-existing conditions or forced to wait for your benefits. Medigap open enrollment only happens once during each person's lifetime. It begins on the first day of the month in which you are both enrolled in Medicare Part B and turn 65 years old. Open enrollment for Medigap will not be changed or offered again.

    Basic Benefits

    • All ten standardized Medigap policies offer the same benefits in each state, except for Minnesota, Wisconsin and Massachusetts. All plans share some basic benefits. In 2010, these include Medicare Part A and Part B coinsurance, the cost of the first three pints of blood, hospital costs up to an additional 365 days after Medicare benefits are gone and Part A hospice copayments or coinsurance. Medigap plans purchase before 2010 may offer different benefits.

    Additional Benefits

    • Other benefits are available if you buy more expensive Medigap policies. Plans C through N offer coinsurance for skilled nursing facility care. Plans B through N cover the Medicare Part A deductible, and C and F also cover the deductible for Part B. Plans C, D, F, G, M and N also have coverage for foreign travel emergency medicare services.

    Out-Of-Pocket and Cost-Sharing

    • Plans K, L and M have cost-sharing expenses. Plan K covers only 50 percent of most benefits, while L covers 75 percent. Plan M has full coverage for most services, except for the Medicare Part A deductible, which it helps cover at 50 percent. Plan K has an annual out-of-pocket cost of $4,620, and Plan L's out-of-pocket is exactly half that at $2,310. You must meet your yearly out-of-pocket limit yourself before your Medigap policy pays, but monthly premiums should be much less expensive with these than other plans.

    High-Deductible Plan

    • Plan F is offered both as a regular and as a high-deductible policy. With this Plan F, you pay all your own costs until reaching the deductible. In 2010, the deductible amount for Plan F was $2,000.

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