Medicare supplements, or Medigap, provides additional benefits that Original Medicare alone does not cover. There are 10 different plans, each with its own benefits to allow for more individualized coverage—these plans are A, B, C, D, F, G, K, L, M, and N.
These plans are incredibly useful but a bit complex. To help you understand this potential insurance plan, here is everything you need to know about Medicare Supplements.
The Purpose of Medicare Supplements
The purpose of this plan is hidden in the name—Medigap plans literally “supplement” your Original Medicare coverage. In general, this means the out-of-pocket costs you would pay under Medicare Parts A and B are now covered.
You should also know that you can only be enrolled in one additional plan at a time. Having a supplement plan means that you cannot have a Medicare Advantage or Part D plan, and vice versa.
Medigap plans will likely be more expensive on a monthly basis than an Advantage plan, but they will save you a lot more on out-of-pocket costs. A supplement plan will essentially pay for itself. Both plans aim to save you money, and both are great options, but the scope of coverage provided by supplements is greater than Medicare Advantage.
Medigap Costs and Benefits
What exactly does Medigap cover? Because there are 10 different plans, each will offer their own specific benefits. However, each will provide some combination of these services:
- Part A Coinsurance & Hospital Costs
- Part B Coinsurance or Copayment
- First 3 Pints of Blood for Transfusions
- Part A Hospice Care Coinsurance/Copayment
- Part A Deductible
- Part B Deductible
- Skilled Nursing Care Facility Coinsurance
- Foreign Travel Emergency Care
- Part B Excess Charges
The cost of your supplement plan depends on a few factors—the plan, the provider, and the rating. The coverage included in your plan will, of course, determine its equivalent cost. In other words, the more benefits you have, the more it will cost.
Because supplements are offered through private insurance companies, the provider you choose will also determine the cost. Be sure to shop around for quality plans and people to find the lowest price in your area.
The rating at which your premium is set will be one of your greatest cost-determining factors. Policies are either:
- Attained-Age Rated: Your premium is age-based with this rating. As you get older, your premium increases.
- Community Rated: Everyone with your same plan will have the same preset premium.
- Issue-Age Rated: Your premium is based on the age you purchase the plan and does not increase.
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