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Medicare Wrap Vs. Medicare Supplements

Medicare supplements (Medigap policies) and Medicare wrap plans (employer retiree health benefits) pay deductibles, co-payments and other costs that Medicare does not cover.

  1. Eligibility

    • All Medicare beneficiaries are eligible to sign up for a Medigap plan during the open enrollment period at the start of their Medicare eligibility. Medicare wrap plans are most commonly offered by large employers to retirees and their spouses.

    Features

    • Medicare regulates Medigap and has created 12 standard plan types labeled A through L. Some states allow insurers to offer these plan types as preferred provider organizations (PPOs) under Medicare Select. Most employer-based Medicare wrap plans offer benefits that are at least as comprehensive as Medigap.

    Cost

    • Medicare wrap plan costs vary by employer, with some beneficiaries receiving free coverage. Medigap plan premiums vary by plan type, as well as within each type from insurer to insurer. For example, a plan offered by one insurer could be twice as expensive as the same one offered by another insurer.

    Drug Benefits

    • Medigap plans do not cover prescription drugs. Retiree Medicare wrap plans, however, can provide prescription drug benefits that supplement or replace a Part D plan.

    Considerations

    • If you elect your employer's retiree wrap plan and later change your mind, Medigap's special enrollment period lets you obtain a policy without regard to health status.

    Tips

    • Determine whether your former employer or union offers retiree health benefits by calling its human resources department or the union membership office. Medicare beneficiaries can obtain assistance from Medicare by calling 1-800-MEDICARE (1-800-633-4227).

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