Almost 70 million Americans are eligible for Medicare. More will join those ranks next year. If you turn 65 next year, you’re one of them.
Medicare provides much-needed healthcare coverage for many Americans. Unfortunately, it doesn’t cover everything. Many Americans find they need a Medicare supplement plan.
What is a Medicare supplement plan, and why do you need to consider one? This guide has all the answers, as well as details about your options.
What’s a Medicare Supplement Plan Anyway?
You may not have realized that there are plans designed to supplement Medicare. That’s because the original Medicare program doesn’t cover everything.
Private insurers sell Medicare supplement plans to cover the “gaps” in Medicare. These plans are standardized by the federal government. That means the Supplemental Plan G sold by one insurer will be identical to the Plan G sold by another.
What Does Original Medicare Cover?
Original Medicare covers quite a bit, but there are still gaps in the program. What do you get with your Medicare coverage?
The original program includes:
- Medicare Part A
- Medicare Part B
It doesn’t include the deductible you’ll pay on Medicare Part B. It also doesn’t include Medicare Part C or Part D.
Part A covers hospital insurance. It will help you with inpatient hospital stays, hospice care, and some other charges. Part B covers other healthcare services, such as outpatient fees and doctor’s visits.
Part D is important for many Americans, especially those who have a chronic illness. It provides coverage for prescription medications. Even if you’re not sick now, having this coverage could help you if you happen to become ill.
Medicare Part C is what’s known as Medicare Advantage. This is not the same as a supplemental or Medigap plan.
Medicare Advantage vs Medicare Supplement
Medicare Advantage plans are under Medicare Part C. They’re not the same thing as a Medicare supplement plan.
Medicare Advantage plans are an “all-in-one” alternative. They bundled together Parts A and B. They also usually include Part D.
Medicare Advantage plans often include other benefits as well. They may include dental or vision benefits, for example. Some plans may also cover your out-of-pocket costs.
Supplemental plans are somewhat different. They work in tandem with Original Medicare.
The Medicare program will pay its part of any approved health cost. Then the supplemental plan will kick in.
Supplemental plans are standardized in terms of what they offer. As a result, they don’t usually cover things like vision or dental care.
Medicare Supplement Plan vs Medigap
Another common term you’ll hear is Medigap. Many people have questions about Medicare supplement vs Medigap plans.
Medicare supplement plans cover the “gaps” in Original Medicare. Some people call these plans Medigap as a result.
So, a Medicare supplement plan and a Medigap plan are the same thing. They’re different from the Medicare Advantage plan, as discussed above.
What Is a Medicare Supplement Plan’s Benefits?
Medicare supplement plans cover the “gaps” in Original Medicare. They provide extra coverage for most of the costs covered by Part A and Part B.
That means they tend to cover costs like:
Exactly how much and what types of fees each plan covers is outlined in the plan structure. Medicare Supplement plans range from A to N.
Coverage generally becomes more comprehensive as you move through the alphabet. What is the best Medicare supplement plan, though, will depend on what you need the most.
The benefits of most of these plans include lowering your out-of-pocket costs. In turn, you have more extensive coverage to help you pay for your medical needs.
Which Is the Best Plan?
Most experts recommend Medicare Supplement Plan C or F. Both of these plans provide coverage for the Part B deductible.
Unfortunately, people eligible for Medicare after January 1, 2020, can’t enroll in Plan C or Plan F. The next best option is Medicare Supplement Plan G. Plan G provides much of the same coverage as Plans C and F, but without covering the Part B deductible.
Plan G covers Part B excess charges. Only Plan F also covers these charges. Plan N covers most of what Plan G does.
Plan M is similar, but it offers less coverage of the Part A deductible than Plans N or G. Plans K and L provide some coverage for most charges, but drop travel coverage.
Plans A and B tend to cover the least, but they’re usually the most affordable.
What About Drug Coverage?
In the past, it was possible to get a Medigap policy that covered prescription medications. With the introduction of Medicare Part D, this is no longer allowed.
If you need prescription medication coverage, then you’ll want to sign up for Part D.
Can You Have Both Medicare Advantage and Medigap?
You might think that your best bet for health coverage after age 65 will be to get both a Medicare Advantage plan and a Medicare supplement plan.
Unfortunately, you aren’t allowed to do this. Medicare supplement plans are only available for those who have Original Medicare. If you have a Medicare Advantage plan, through Part C, you can’t buy a Medigap policy.
If you choose to go back to Original Medicare after having a Medicare Advantage plan, then you can also get supplemental coverage.
Discover the Right Health Coverage for Your Future
You asked, “What is a Medicare supplement plan?” This guide should have given you a solid understanding. It also helped you explore some of your options, including different supplement plans.
Choosing health insurance coverage can be tough, no matter what age you are. As you can see, even when you’re eligible for Medicare, you have plenty of decisions to make.
Our insightful articles have plenty of tips for comparing health insurance policies and coverage. Find the right plan by making sure you get great advice straight from our archives!