Information on Medicare Supplemental Insurance

Medicare supplements, also known as Medigap policies, are sold by private insurance companies as an adjunct to original Medicare parts A and B. Medicare typically pays about 80 percent of the cost of any health care services provided, so these insurance policies fill in the “gaps” in coverage by paying the remaining 20 percent. The plans are overseen by the federal government, and insurers must meet specific guidelines to sell the policies.

Identification

• As of 2010, 11 Medicare supplements are available, identified as Plans A, B, C, D, F, high-deductible F, G, K, L, M and N. Each plan offers a different set of benefits and all are priced differently by the insurance companies selling them. When you first turn 65, you can purchase any of the 11 supplements you want and an insurance company cannot refuse to sell to you, even if you have a pre-existing condition. If you don’t buy a supplement when you turn 65, however, but wait several years, it may be more difficult for you to get one.

Basic Benefits

• All of the 11 Medigap plans offer the same set of basic benefits. These benefits include coverage of co-insurance costs for days 61 through 90 of any hospital stays you have, payment of all hospital costs beyond the 150 days that Medicare covers, the 20 percent co-insurance for health care services covered by Medicare Part B, the first three pints of blood used each year, and the cost of hospice care.

Types

• Beyond the basics, 10 of the Medigap policies offer additional benefits, while Plan A offers only the basic benefits. These additional benefits include payment of the Part A hospital deductible, which is covered by plans B through N; payment of the skilled nursing co-pay, covered by plans C through N; the Part B deductible, which is covered by plans C, F and N; Part B excess charges, which is the amount beyond what Medicare reimburses that physicians are allowed to charge, covered by plans F and G; and emergency care outside of the country, which is covered by plans C, D, E, F, G, M and N.

Warning

• Likely to be a large number of insurers in your state sell each of the Medigap policies, and each company will charge a different price for a policy. However, regardless of the price, the coverage offered by the Medigap policies must be identical across companies. In other words, companies selling Plan F may charge different amounts, but they all have to provide exactly the same benefits.

Considerations

• When choosing a plan, get the best coverage you can afford, because you may not be able to increase your coverage at a later date. While insurers are obligated to sell you whatever policy you want when you first turn 65, that is not the case later on. If you do not like the plan you initially choose, you will be able to switch to a plan offering the same or less coverage, but it is up to the insurance company to decide whether to sell you one that offers more coverage.