Medicare 101

Supplement Insurance For Medicare

Christian Worstell

by Christian Worstell | Published February 18, 2021 | Reviewed by John Krahnert

If you rely on Medicare for health insurance, you still might find yourself with expensive out-of-pocket costs. This is why millions of Americans opt for Medicare Supplement Insurance. Also known as Medigap, these policies can bring down your overall costs and increase your coverage over several benefit areas. 

Medicare Out-of-Pocket Costs

Some of the costs that Original Medicare leaves to the recipient include:

  • Premiums
    While many Medicare recipients don’t pay a premium for Medicare Part A, some do. And those costs can be high. For some, Medicare Part A costs upwards of $471 a month (in 2021) in premiums. Medicare Part B premiums start at $148.50 per month (in 2021), but are higher for those with larger incomes.
  • Deductibles
    Medicare recipients are also responsible for deductibles. This is the amount you must pay for services before Medicare pays anything. In 2021, the Medicare Part A deductible is $1,484 each benefit period. The Medicare Part B is smaller, at $203 per year (in 2021). 
  • Coinsurance
    Medicare recipients are also responsible for paying coinsurance, which is a portion of Medicare’s approved cost of services. In most cases, the co-insurance amount for Medicare Part B is 20%. This means that Medicare pays 80% of your approved services and you pay 20% (after your deductible is met).
  • Copayments
    Some Medicare services require copayments — a flat fee instead of a percentage of the cost for a service.

Supplementing Your Coverage

Unlike Original Medicare, which is administered by the federal government, Medicare Supplement Insurance is sold through private insurance companies. 

In most states, there are 10 standardized Medigap plans to choose from. These variations help you find the right policy for your needs, with a monthly premium that works for your budget.

All 10 standardized Medigap plans provide at least partial coverage for:

  • Medicare Part A coinsurance and hospital costs
  • Medicare Part B coinsurance or copayment
  • First three pints of blood
  • Medicare Part A hospice care coinsurance or copayment

Each Medigap plan provides a unique blend of benefits beyond these four basic benefits. The only Medigap plan that does not provide coverage beyond the four benefits listed above is Medigap Plan A.

The following chart shows the basic benefits of all 10 standardized Medigap plans.

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Medicare Supplement Benefits

Part A coinsurance and hospital coverage

Part B coinsurance or copayment

Part A hospice care coinsurance or copayment

First 3 pints of blood

Skilled nursing facility coinsurance

Part A deductible

Part B deductible

Part B excess charges

Foreign travel emergency

A B C* D F1* G1 K2 L3 M N4
50% 75%
50% 75%
50% 75%
50% 75%
50% 75% 50%
80% 80% 80% 80% 80% 80%

* Plan F and Plan C are not available to Medicare beneficiaries who became eligible for Medicare on or after January 1, 2020. If you became eligible for Medicare before 2020, you may still be able to enroll in Plan F or Plan C as long as they are available in your area.

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1 Plans F and G offer high-deductible plans that each have an annual deductible of $2,370 in 2021. Once the annual deductible is met, the plan pays 100% of covered services for the rest of the year. The high-deductible Plan F is not available to new beneficiaries who became eligible for Medicare on or after January 1, 2020.

2 Plan K has an out-of-pocket yearly limit of $6,220 in 2021. After you pay the out-of-pocket yearly limit and yearly Part B deductible, it pays 100% of covered services for the rest of the calendar year.

3 Plan L has an out-of-pocket yearly limit of $3,110 in 2021. After you pay the out-of-pocket yearly limit and yearly Part B deductible, it pays 100% of covered services for the rest of the calendar year.

4 Plan N pays 100% of the Part B coinsurance, except for a copayment of up to $20 for some office visits and up to $50 copayment for emergency room visits that don’t result in an inpatient admission.

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What to Know Before You Shop

There are several other basics to keep in mind as you shop for a Medigap plan:

  • You must be at least 65 years old and enrolled in Medicare Part A and Part B to be eligible for Medigap. However, in some states, Medicare recipients who are younger than 65 may qualify for a Medigap plan. Speak with a licensed agent to find out if you qualify.
  • You can not be enrolled in Medicare Advantage (Medicare Part C) and a Medigap plan at the same time.
  • You will pay a monthly premium for your Medigap plan in addition to your monthly premium for Medicare Part B.
  • Your Medigap plan will only cover one person. You’ll have to get a separate plan for your spouse.
  • Medigap plans that share a letter will have the same basic benefits no matter where you buy them. For example, a Medigap Plan K policy purchased from one insurer will have the same basic benefits as a Medigap Plan K policy from another insurer. However, the price you pay for each plan can vary greatly, even for the same exact benefits. Be sure to shop around to find the Medigap policy you want at the best available price.

Speak with a licensed agent at 1-800-995-4219 to learn more about Medicare Supplement Insurance and compare plan quotes in your area.

Resource Center

Compare Medigap Plans 2021

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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