While Medicare provides broad coverage, there are gaps where some people may want additional coverage. Many private insurers design and sell plans meant to fill these gaps, so that Medicare beneficiaries can enjoy sufficiently comprehensive coverage.
Another name for these Medicare supplement plans is “Medigap” since they fill the space that Medicare doesn’t. However, Medicare supplemental insurance doesn’t provide types of care that aren’t already included, such as dental.
The Different Medicare Supplements
While private insurers sell supplemental plans, these plans follow one of ten Medicare standards. In the same way that Medicare itself exists in four parts, there are ten different Medicare supplement plans.
Regardless of the exact provider, each of these plans provides the same coverage. The principal difference is the premium that different providers charge for Medigap coverage.
Plan A offers a simple, but highly valuable service. While normal Medicare only covers 80% of outpatient services, Plan A covers the remaining 20%.
Medicare Plan B is essentially an upgraded form of Plan A which covers the 20% deductible on outpatient fees. However, it also covers the Part A deductible on hospital stays. This deductible is over $1,000 as of 2020 and rises each year, so Plan B is an excellent choice of Medigap coverage.
Medicare supplement Plan C is one of the most comprehensive plans. It covers everything Plan B does, in addition to visits to skilled nursing facilities, health emergencies during travel, hospice care copays, and more. The only significant gap that Plan C doesn’t cover is excess charges that a doctor levels beyond what Medicare is willing to pay. For this reason, Plan C is popular in states that disallow excess charges.
Medicare Plan D is similar to Plan C but offers slightly reduced coverage. Whereas Plan C covers the 20% deductible on outpatient services, Plan D doesn’t. If you don’t expect to need a great deal of outpatient care, then Plan D is an excellent value overall.
Plan F is one of the most popular and most comprehensive Medigap plans. It covers all copays, coinsurances, and deductibles in your Medicare plan so that you won’t have to pay anything out of pocket.
Plan G is highly comprehensive in the same vein as Plan F, although it declines to cover the Part B deductible on outpatient services.
Medigap Plan K is steadily rising in popularity with its unique cost-sharing mechanism. It offers full coverage of hospital stays and Part A coinsurance as well as 50% coverage of blood transfusions, skilled nursing facility visits, and other forms of care.
Plan L is a cost-sharing arrangement that’s identical to Plan K in terms of coverage. However, it covers a greater share of the costs with 75% coverage.
Plan M comes with lower premiums than comprehensive plans such as Plan F. However, the drawback of Plan M is that you still need to pay excess charges, the Part B deductible, and half of the Part A deductible.
Plan N is largely the same as Plan M, except that it offers full coverage of the Part A deductible.