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Medicare Supplement Regulations

Medicare supplements are also known as Medigap policies. They are sold by private insurance companies and are designed to cover the gaps in the original Medicare plan coverage. These policies cover, to varying degrees, the copays, coinsurances and deductibles that exist in Medicare parts A and B. Policies also cover some situations that are not covered by Medicare. As with any health insurance policy, policyholders pay a monthly or annual premium. The plans are standardized and closely regulated by the federal government.

  1. Plan Basic Benefits

    • Medicare supplement plans have standardized basic benefits that are strictly regulated. These basic benefits cover Part A hospital coinsurance and add an additional 365 days of hospitalization. They also cover hospice copays and coinsurance. Part B basic benefits cover copays and coinsurance after a deductible and the first three pints of blood as needed.

    Plan Specific Benefits

    • Each standardized plan is the same from company to company as regulated by the federal government. The only significant difference from company to company is price, and even that is regulated by each state's insurance administration. All of the plans have at least the basic benefits. Some add foreign emergency coverage, as Medicare does not provide coverage overseas. Others cover skilled nursing coinsurance. Some plans also cover all or part of Part B excess coverage, which is the difference between what a doctor charges and what Medicare will actually pay.

    Plan Enrollment

    • Plan enrollment is also regulated. Medicare beneficiaries can enroll in plans when they are first eligible for Medicare. Open enrollment means guaranteed acceptance into a plan. There are also special enrollment periods in certain circumstances, such as losing coverage involuntarily. To enroll in a supplement, you also need to be enrolled in both Medicare parts A and B. You can also only be enrolled in one Medicare supplement or Medicare Advantage plan at a time. There is also a mandated 30-day free-look period, during which a supplement can be canceled for a full refund.

    Plan Limitations

    • There are also regulations on what plans cannot cover. Medicare supplement plans cannot cover anything that is not covered by Medicare parts A and B. This includes dental work, cosmetic surgery, custodial nursing care and hearing aids.

    Plan Marketing

    • The federal government closely regulates how Medicare supplement plans are marketed and sold. Companies must have all marketing materials approved by Medicare. Agents who sell Medicare supplements must be licensed and leave specific marketing materials with each prospect. No company is favored or endorsed by Medicare, but all plans are approved by Medicare.

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