What are Medicare Supplements?

Medicare Supplements (also known as Medigap plans) are insurance plans that offer coverage for your coinsurance and copayments surrounding your Medicare-covered healthcare costs.

There are 10 plans, each labeled by a letter between A and N.

How do Medicare Supplements work?

Each month, you will pay your monthly premium for your Medicare Supplement plan. Then, when you visit a doctor or hospital, Medicare will pay its share of the costs. Medicare then sends the bill to the insurance carrier that provided you with your Medigap plan and pays based on the agreed upon terms of your plan.

If there’s anything left to pay, it will be your responsibility.

How much are Medicare Supplements?

How much your premium will be determines on where you live and which plan you select. 

However, Medicare Supplements are standardized which means a plan of the same letter from any insurance company is required to have the same coverage. The only difference between companies is the premium you pay. 

That’s why having an independent broker like Medicare Plan Saver is important. We shop your plan with lots of insurance carriers to make sure you’re getting the best price possible.

What do Medicare Supplements cover?

Each Medigap plan covers a different percentage of:

  • Coinsurance (some Supplement plans have you pay a copay instead of the 20% coinsurance)
  • Medicare deductibles 
  • Hospital costs after you run out of Medicare-covered days 
  • Skilled nursing facility costs after you run out of Medicare-covered days
  • Part B excess charges
  • Blood transfusions

How much will I save?

How much you’ll save with a Medigap plan will ultimately depend on how much you need to make visits to the doctor or hospital. 

However, there are some costs we can take a look at.

Medicare Part A has a deductible of $1,408 in 2020. There is coinsurance involved with Medicare Part A as well. Your coinsurance depends on number of days spent in the hospital: 

  • Days 1-60: $0 coinsurance for each benefit period
  • Days 61-90: $352 coinsurance per day of each benefit period
  • Days 91 and beyond: $704 coinsurance per each “lifetime reserve day” after day 90 for each benefit period (up to 60 days over your lifetime)
  • Beyond lifetime reserve days: all costs

Medicare Part B has a deductible of $198 in 2020 (if you turned 65 after January 1, 2020, you are not allowed to purchase a plan that covers Part B’s deductible). After your deductible is met, you usually pay 20% of the Medicare-approved amount for most doctor services (including most doctor services while you’re a hospital inpatient), outpatient therapy, and durable medical equipment. Depending on which state you live in, doctors may be able to charge what is called “excess charges” above what Medicare pays for.