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Medicare Supplement or Medigap policies can help pay for deductibles, coinsurance, and copayments — all of which are not covered by the federal Original Medicare program.
Unlike Original Medicare, Medigap policies are sold by private insurance companies. By law, Medigap is standardized across all U.S. states, with three exceptions.
There are 10 sub-categories of Medicare Supplement insurance, each with different coverage and cost-sharing benefits.
Medigap customers pay a monthly premium for their plan, in addition to their Medicare Part B premium.
Costs range broadly from plan to plan, and insurance companies use different rating models to set premium prices.
Sold by private insurance companies, Medicare Supplement or Medigap plans serve as a sort of add-on to traditional Medicare coverage. Medigap policies are designed to offset expenses — such as deductibles, copayments, or coinsurance — that aren’t covered by Original Medicare . Some plans even cover the cost of medical care you receive when traveling abroad.
Read on to learn more about how Medicare Supplement insurance works, the types of plans available, premium costs, alternatives, when to enroll, and factors to consider before you buy a Medigap plan .
What is Medigap or Medicare Supplement insurance?
Medigap or Medicare Supplement plans are designed to fill the “gaps” in expenses that aren’t covered under Original Medicare (Medicare Part A hospital insurance and Medicare Part B medical insurance).
These plans are sold by private insurance companies, and customers pay a monthly premium for full or partial coverage of their deductibles, coinsurance, and copayments. In addition to their Medigap premium, subscribers will still need to pay their Medicare Part B premium ($148.50 per month in 2021).
Medigap enrollment is steadily increasing nationwide, from 12.3 million enrolled in 2015 to 13.99 million in 2018, according to the trade association America’s Health Insurance Plans .
Medigap plans are standardized in all U.S. states except Massachusetts, Minnesota, and Wisconsin.
Types of Medigap plans
Ten types of Medigap plans are available: A, B, C, D, F, G, K, L, M, and N. Prices and benefits vary. Here’s a breakdown, according to the Centers for Medicare and Medicaid Services :
* Plan C and Plan F are not available to new Medicare beneficiaries, as of January 1, 2020.