Supplemental Medicare Plans Explanation

Any policy sold by private companies to provide insurance to those with Medicare is considered a supplemental plan. Also known as Medigap plans, these plans help pay for certain costs that the Medicare program does not.

Significance

• The laws that regulate supplemental Medicare plans regulate how these policies are sold to the public. Standardization between policies allows consumers interested in getting additional benefits to choose between the plans more easily.

Types

• Private insurance companies offer 12 distinct policies, labeled A through L. Each of these programs offers a different level of coverage, depending on the company, from which consumers choose which one fits their needs.

Function

• The way supplemental Medicare plans work is that the cost of general Medicare coverage is paid to the private insurance company. Consumers pay additional costs to the company, which covers the full cost of the plan's benefits.

Considerations

• Supplemental Medicare plans are designed to cover individuals rather than you and your spouse. Each of you must purchase separate policies to get the benefits of additional coverage.

Warning

• According to the U.S. Department of Health and Human Services, a number of companies are known to have abused Medigap laws. Each program should be verified for legitimacy before you or your spouse sign up.