Key Takeaways
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Medigap plans, also known as Medicare Supplement Insurance, help cover out-of-pocket costs in Original Medicare, but benefits vary by plan letter.
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Standardized across most states, Medigap plans range from A to N, each offering a different level of coverage, making it important to compare your options carefully.
Understanding Medigap: What It Is and Why It Matters
If you’re enrolled in Original Medicare, you might have noticed that it doesn’t cover all of your healthcare expenses. That’s where Medigap plans come in. Also known as Medicare Supplement Insurance, these plans are designed to fill the gaps left by Medicare Part A and Part B, helping you manage costs like deductibles, copayments, and coinsurance.
Medigap plans are standardized across most states, meaning that a Plan G in one state will offer the same benefits as a Plan G in another. However, monthly premiums can vary based on factors such as location, age, and insurer pricing methods. Understanding the differences between each plan letter is crucial in making the best choice for your healthcare needs.
The Standardized Medigap Plans: A Quick Overview
There are ten standardized Medigap plans labeled A, B, C, D, F, G, K, L, M, and N. Each of these plans offers different levels of coverage, though all must follow federal and state regulations. In Massachusetts, Minnesota, and Wisconsin, Medigap policies are standardized differently, so if you live in one of these states, you’ll need to check your state-specific options.
Medigap plans only work with Original Medicare. If you have a Medicare Advantage plan (Part C), you cannot use a Medigap policy to pay for out-of-pocket expenses.
Let’s break down each Medigap plan and what it offers.
Breaking Down the Medigap Plan Letters
Plan A: The Basic Option
Plan A offers the most basic coverage of all Medigap plans. It covers:
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Medicare Part A coinsurance and hospital costs (up to an additional 365 days after Medicare benefits are used up)
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Medicare Part B coinsurance or copayment
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The first three pints of blood
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Part A hospice care coinsurance or copayment
It does not cover the Medicare Part A or B deductible, skilled nursing facility coinsurance, or any foreign travel emergency expenses.
Plan B: Similar to Plan A with a Key Addition
Plan B includes everything from Plan A but adds coverage for the Medicare Part A hospital deductible.
Plan C: Comprehensive Coverage (No Longer Available for New Enrollees)
Plan C provides robust coverage, including:
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Everything in Plan B
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Medicare Part B deductible
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Skilled nursing facility coinsurance
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Foreign travel emergency coverage (80%)
However, Plan C is no longer available to beneficiaries who became eligible for Medicare after January 1, 2020.
Plan D: A Step Down from Plan C
Plan D covers the same benefits as Plan C except for the Medicare Part B deductible. It still offers strong coverage for hospital stays and skilled nursing facilities.
Plan F: The Most Comprehensive Plan (Closed to New Beneficiaries)
Plan F was historically the most comprehensive Medigap plan, covering everything that Plan C covers plus Medicare Part B excess charges. However, like Plan C, it is no longer available to new Medicare enrollees as of January 1, 2020.
Plan G: The Best Alternative to Plan F
Plan G is now the most comprehensive Medigap plan available to new enrollees. It covers everything that Plan F covers except the Medicare Part B deductible. Because Plan F is no longer available to new beneficiaries, Plan G has become a popular choice for those looking for full coverage.
Plan K: Lower Premiums with Cost-Sharing
Plan K offers partial coverage but at a lower premium. It covers:
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50% of Medicare Part B coinsurance or copayment
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50% of the first three pints of blood
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50% of Part A hospice care coinsurance or copayment
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50% of skilled nursing facility care coinsurance
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50% of the Part A deductible
Plan K also includes an out-of-pocket maximum, which is unique among Medigap plans. Once you reach this limit in a given year, the plan pays 100% of covered services.
Plan L: Similar to Plan K but with Higher Coverage
Plan L is structured similarly to Plan K but provides 75% coverage instead of 50%. Like Plan K, it has an annual out-of-pocket limit.
Plan M: A Balanced Cost-Saving Option
Plan M covers:
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Everything in Plan D
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50% of the Part A deductible
It does not cover the Medicare Part B deductible or excess charges.
Plan N: Cost Sharing with Lower Premiums
Plan N covers:
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Everything in Plan D
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Full coverage for Part B coinsurance, except for a small copay ($20 for office visits and $50 for ER visits that don’t result in admission)
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Foreign travel emergency coverage (80%)
Plan N does not cover Medicare Part B excess charges, so if a provider does not accept Medicare assignment, you may have to pay more out-of-pocket.
Choosing the Right Medigap Plan for You
Selecting a Medigap plan depends on your healthcare needs and budget. Here are some key factors to consider:
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Do you want full coverage? Plan G offers the most comprehensive option for new enrollees.
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Are you willing to share some costs for lower premiums? Plans K, L, M, and N offer cost-sharing features that reduce monthly premium costs.
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Do you need coverage for foreign travel? Plans C, D, F, G, M, and N all provide foreign travel emergency coverage.
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Will you be charged excess fees? If you visit doctors who charge more than Medicare-approved rates, Plans F and G (if available) cover excess charges.
Remember, Medigap policies are guaranteed renewable as long as you continue paying the premiums, so once you enroll, you can keep your plan regardless of changes in your health.
When Can You Enroll in a Medigap Plan?
The best time to enroll in a Medigap policy is during your Medigap Open Enrollment Period, which lasts six months starting from the first day of the month you turn 65 and are enrolled in Medicare Part B. During this period, you have guaranteed issue rights, meaning you can buy any Medigap policy available in your state without medical underwriting. If you apply after this period, you may be subject to medical underwriting, which could result in higher premiums or denial of coverage based on pre-existing conditions.
Making an Informed Decision About Medigap
Medigap plans can help bridge the financial gaps in Medicare, but choosing the right one requires careful comparison. Understanding what each plan covers ensures that you select an option that best fits your healthcare needs and budget. Remember to enroll during your open enrollment period to avoid potential underwriting issues and secure the coverage you need.
