What Is Medicare Supplemental Insurance?

Medicare is a form of United States government assistance that helps citizens and permanent residents pay for the cost of health care. However, the basic form of Medicare does not cover all types of medical care and procedures. To help fund these types of care, private insurance companies offer Medicare Supplemental Insurance Policies, commonly called Medigap.

Function

• Medicare covers the cost of hospitalization, doctors visits, diagnostic testing and prescription drugs, usually with a co-payment, co-insurance or deductible payable by the patient. Medicare Supplemental Insurance provides coverage for other types of health care and, in some cases, the out-of-pocket expenses associated with Medicare.

Types

• Medicare Supplemental Insurance is available in 12 different plans. These plans are distinguished by the letters A through L, and each plan covers a different combination of items. For instance, Plan A covers Medicare Part A and B coinsurance and blood.

Cost

• Patients pay monthly premiums for the benefit of Medicare Supplemental Insurance; for a married couple, each spouse has an individual insurance plan.
  The cost of the plans changes each year and varies greatly by location, but plans with the greatest number of services typically cost the most.

Regulation

• The federal government regulates companies that sell Medicare Supplemental Insurance Policies. This means that any insurance company that sells Medigap must use the same names and features for their plans so that seniors and their families can easily compare plans.

Coverage

• Medicare Supplemental Insurance Policies cover a variety of costs, including coinsurance, co-payments, blood used in transfusions, deductibles, foreign travel emergencies, at-home recovery from an illness or procedure and preventative care that is not covered by other types of Medicare.