Medicare 101

Medicare Supplemental Insurance Options

Christian Worstell

by Christian Worstell | Published December 22, 2020 | Reviewed by John Krahnert

People covered by Medicare Part A and Part B are not required to have any type of supplemental insurance policy. Many people do, but there is no penalty for choosing not to buy one.

There are several different types of supplemental insurance — like critical illness, hospital and international health coverage. Then there’s Medicare Supplement Insurance (Medigap), which is a common type of coverage for people with Medicare across the U.S. Keep reading to learn more.

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Types of Supplemental Insurance

There are several types of supplemental health insurance that can be paired with Medicare to cover anything from strokes, to international emergencies. Below is a list of some of the most common types of supplemental policies.

  • Critical Illness Insurance: 
    You can buy critical illness insurance to cover a predetermined list of serious conditions. These plans will generally pay out a lump sum if you are diagnosed with one of the illnesses included in the policy, which you could use for any purpose (such as medical treatments or living expenses). Heart attack, cancer and stroke are the three primary illnesses included with this type of supplemental insurance, but some plans may cover other conditions as well.
  • Cancer Insurance
    Cancer insurance is a type of critical illness insurance, except it will only cover a cancer diagnosis. Cancer insurance (as well as critical illness insurance) is generally underwritten, which means insurers take your medical history into account before accepting your application. If you have a past history of cancer, insurers will be more likely to deny you coverage.
  • Hospital Insurance
    Hospital Insurance, also known as a hospital indemnity plan, covers unexpected hospital stays due to accidents or serious illnesses. The payout may come in the form of a lump sum or installments, and you could use these supplemental insurance benefits to pay for medical bills or any other expenses. Unlike critical illness insurance, hospital insurance is tied to a stay in the hospital, rather than to a specific condition.
  • International Health Insurance
    International health insurance covers health care in the event of a medical emergency in a foreign country.

Medicare Supplement Insurance

Also known as Medigap, Medicare Supplement Insurance helps pay for some of the out-of-pocket costs that Original Medicare (Part A and Part B) leaves behind, such as deductibles, copayments and coinsurance. These plans are sold by private insurance companies separate from Original Medicare. In most states, there are 10 standardized Medigap plans to choose from that offer varying levels of coverage.

Although you are not required to have it, Medigap can end up covering a lot of what is included in the other supplemental policies, such as emergency foreign medical care or extended stays in the hospital. That is probably why nearly 12 million people (22% of people on Medicare) were enrolled in a Medigap policy in 2015. Plus, if you sign up for Medigap during your 6-month Medigap open enrollment period, insurance companies cannot deny you coverage or make you pay more for a policy because of a pre-existing condition.

In most states, there are 10 standardized Medigap plans (Plans A, B, C, D, F, G, K, L, M and N). Every type of plan with the same letter offers the same basic benefits, no matter where in the country you are buying it.

The chart below gives more information into what each plan covers:

2017 Medigap Plans Chart

Still don’t know what kind of coverage you need? A licensed agent can answer your questions about Medigap and help you find the right plan for you. Connect with an agent at 1-800-995-4219.

 

Resource Center

Compare Medigap Plans 2020

See how the 10 Medigap plans differ. Review our chart for a detailed comparison of Medicare Supplement insurance benefits and compare Medigap options where you live. Read more
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