Medicare Supplement Plans Guide (Updated for 2019)

What does Medicare Supplement Insurance cover?

Medicare Supplement Insurance is often referred to as a Medigap plan. This is because it provides supplemental insurance to help cover the gap between what Original Medicare pays and the total costs of your services for Part A and Part B. Simply put, it helps cover some, or all of your Medicare Part A and Part B cost sharing such as:

  • Part A coinsurance and hospital costs
  • Part B coinsurance and co-payment
  • First 3 pints of blood
  • Part A hospice care coinsurance and co-payment
  • Skilled Nursing Facility (SNF) care coinsurance
  • Part A deductible
  • Part B deductible
  • Part B excess charge

Whether or not one of the above items is covered, depends on which Medicare Supplement insurance plan you choose.

Refer to the Medicare Supplement Plan cost sharing guide to see in-depth what each of the 10 standardized plans covers. Although the benefits provided by the plan depend on which one you choose, there are some things that are universal among carriers

Two important key factors about Medigap plans:

  • All Medicare Supplement plans are guaranteed renewable, regardless of health issues. So for as long as you pay your insurance premium, the insurance company can not cancel your policy.
  •  Medicare Supplemental coverage plans are STANDARDIZED. What this means is that no matter what company you choose, the benefits will be identical. So, the only thing that determines what coverage gaps are covered is which plan you choose. This means Medicare Plan F from Company A is exactly the same as Medicare Plan F from Company B. The only thing that is different is the price you pay.

How much does Medigap cost?

Medigap plan costs vary depending on which plan you choose and what company you go with. Medicare Supplement plans tend to carry a higher monthly payment over Medicare Advantage plans. However, cost sharing can end up being much more comprehensive. And there is more to cost than just your monthly premium, it’s also your annual out of pocket expenses for your Medicare services. So when determining the cost, it’s best to look at your overall medical needs throughout the year. The additional premium you pay each month may very well be worth it for the reduced out of pocket medical expenses you incur throughout the year.

Medicare Supplement enrollment guide

Enrolling in Medicare Supplemental insurance is a bit different than enrolling in the other Medicare components. You’re not restricted to only being able to enroll during certain times of the year. You can enroll, dis-enroll, and switch Medigap plans at any time. However, if you don’t enroll during your one time Medicare Supplement Open Enrollment Period (OEP), or during a period where you have a guaranteed issue right, you have to answer health questions and pass underwriting. Because of this, it is possible to be denied coverage or pay higher costs due to health conditions.

To enroll without answering health questions you must enroll during one of these times:

  • Your one time Medicare Supplement Open Enrollment period
  • During your trial right period
  • During a time that you qualify for a guaranteed issue right

For more detailed information on how to enroll, when you can or should enroll, and the other nuances of enrolling in a Medicare Supplement plan check out the article I wrote: “The Ultimate Guide to Medicare Enrollment” I cover topics such as Medigap protections, your Medicare Supplement Open Enrollment Period (OEP), qualifying for a Guaranteed Issue Right, and so much more. It’s an extremely detailed article on everything enrollment related.

Medicare Supplement Plans Comparison Chart

Cost sharing varies from plan to plan.

Here is a chart to help make each plan easy to understand:

Medicare Supplement Plans Comparison Chart

A quick explanation detailing what each one of these benefits covers and why they are important:

Part A coinsurance – Your part A daily co-pay for in-patient hospital care. The Part A daily co-pays can accrue quite a hefty bill ranging between $0 and $682 per day.

Part B coinsurance or copayment – Remember, Medicare Part B only covers 80% of your outpatient care costs. This pays the other 20%. Imagine receiving a bill for 20% of a $10,000 surgery. Do you have an extra $2000 to spend if that happens?

Blood (first 3 pints) – Medicare only covers the 4th pint and above in a blood transfusion, so this covers the first 3!

Part A hospice coinsurance/copay – Just as it sounds, it pays for the part of hospice care that Medicare Part A does not.

Skilled nursing facility (SNF) care coinsurance – pays the $170.50 per day co-pay incurred after day 20 in an SNF.

Part A deductible – This pays the $1,364 Part A deductible which you can incur more than once per year. If you had 3 inpatient stays at the hospital with each stay being more than 60 days apart you could be on the hook for 3 separate deductibles or $4,092. A lot of people don’t realize this

Part B deductible – The Part B deductible is $185. Unlike Part A this is an annual deductible, so you would not be subject to this deductible more than once per calendar year.

Medicare Part B excess charge – This is important because if your health provider does not choose to use Medicare’s assigned rates for their rendered services you would be on the hook. These costs can be as high as 15% above the Medicare assigned rate which can be pricey and is in addition to your 20% coinsurance cost share.

Foreign travel exchange – Covers 80% of medical expenses incurred while outside of the country. There are a $250 deductible and $50,000 lifetime benefit maximum

Out of pocket limit – Once you meet your out of pocket yearly limit and annual Part B deductible the Medigap policy will cover 100% of covered services for the rest of the calendar year.

Is Medicare Plan G better than Plan F?

Medicare Supplement plan F and plan G are among the two most popular Medigap plans available. So which one is better? First, let’s compare the benefits:

As you can see they are almost identical. The only difference is that with Plan F your Part B deductible is covered and with Plan G it is not. The deductible for Medicare Part B for 2019 is $185. So that’s it… Plan F has the potential to save you $185 over plan G throughout the year if you have outpatient expenses.

Now let’s compare the cost.

I’ll use a real-life example. For one of my clients, the lowest priced Plan G was $88.00/mo. The lowest price Plan F was $125.31. This means that over the course of 12 months they would spend an additional $447.72 to carry plan F.

So, they would spend an additional $447.72 over the course of the year just to have a possibility of saving $185. On the flip side if they choose Plan G they could save as much as $447.72 on their annual premium. If they end up using part B services and have to pay their deductible they would still save $262.72. ($447.72 savings – $185 deductible)

Which one do you think they went with?

Now, that doesn’t mean the price difference will always be that drastic. And the lowest priced company may not always be the best. Remember a Plan F is a Plan F and a Plan G is a Plan G in terms of coverage, regardless of which company you choose, but there are still other things you want to take into consideration.

One of those considerations is that most Medicare Supplemental insurance plans will go up over time. Another real-life example is that company X’s Medicare Plan F took a rate increase of 7% in 2018 and 5% in 2017. For plan G the same company only took a 5.1% increase in 2018 and no increase at all in 2017. So while Plan F went up 12% in 2 years, Plan G only went up 5.1%. Plan F does tend to have more significant increases over time. So what’s the big deal? If the rate goes up you’ll just switch plans, right? Remember once your Medicare Supplement Open Enrollment Period ends you will have to pass underwriting unless you qualify for a guaranteed issue right, so it’s important to consider these things in your initial decision making to avoid being stuck later.

So, which is better? Plan F or Plan G? A majority of the time Plan G will be the better bet for overall cost. You’ll have to compare the pricing of both. If plan G is at least $15.42 per month less, then you’ll save $185 a year which equivalent to your Part B deductible.

What Medigap plans don’t cover

  • Long Term Care (LTC)
  • Vision/Eyeglasses
  • Dental
  • Hearing aids
  • Private duty nursing
  • Prescription Drugs*

*Prior to January 2006 some Medicare Supplement policies did cover prescription drugs and anyone who enrolled prior to January of 2006 and kept their plans may still have this coverage included. However, no new Medigap policies include this coverage. Because of this, I do recommend that you pair your Medicare Supplement Plan with a Part D Prescription Drug Plan.

Sean Senseman

Sean Senseman

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