Medicare and Medigap

Medicare

Medicare is a federal government insurance program for seniors 65 and older and certain disabled persons.

• You generally pay a set amount for your health care (  deductible  ) before Medicare pays its share. Then, Medicare pays its share, and you pay your share (  coinsurance  /  copayment  ) for covered services and supplies. There’s no yearly limit for what you pay out-of-pocket.
• You usually pay a monthly premium for Part B.  
• You generally don’t need to file Medicare claims. The law requires providers and suppliers to file your claims for the covered services and supplies you get. Providers include doctors, hospitals, skilled nursing facilities, and home health agencies.

What is Part A (Hospital Insurance)?

Part A covers inpatient hospital stays, limited care in a skilled nursing facility, hospice care, and some home health care.

• How much does Part A cost?
• How do you get Part A?
• What does Part A cover?

What is Part B (Medical Insurance)?

Part B covers certain doctors’ services, outpatient care, medical supplies, and preventive services.

• How much does Part B cost?
• How do you get Part B?
• What does Part B cover?

Medigap (medicare supplement)

The Medigap plans are Federally-standardized. All companies must follow the Medigap coverage chart below. In other words, a Plan F with one company is the same as a Plan F with another company. And, a Plan G is a Plan G, no matter what insurance company you use to provide the coverage.

Because of the plan standardization, it is very easy to compare plans in a straight-forward way. Although the benefits are standardized, premiums are definitely not. In fact, you will find that premiums for the exact same plan vary as much as 30-50% depending on which insurance company you choose. It is important to choose a plan that meets your needs based primarily on price.

1) Plan F also offers a “high deductible” option. For 2021, that deductible is $2,370. You must pay that much out of pocket before the plan pays anything. This is not a popular option with companies or consumers, but there are companies that do offer it and premiums are lower than most other plans.

2) Plans K and L have an annual out of pocket limit. For 2021, those amounts are $6220 (K) and $3110 (L). Once you meet that amount, in addition to meeting your Medicare Part B deductible ($203/year for 2021), the plan pays 100% of covered services for the rest of the calendar year.

3) Plan N has a co-pay structure for doctor and ER visits. You must pay an “up to $20” co-pay per doctor visit on this plan and a $50 emergency room co-pay.

Why is the Medigap Coverage Chart Important?

The Medigap coverage chart shows you exactly what a Medigap plan will cover, regardless of which company you use to obtain the coverage. This allows you to pick a coverage level that you are comfortable with, then compare multiple companies that offer that specific plan.

All companies do not offer all plans. On the contrary, most companies only offer 3-4 of the plans. The plans that are most commonly offered are Plan F, Plan G and Plan N. This does not necessarily mean that those are the best choices for you; however, between those three plans, they have over 80% of the market share for Medigap plans.

Does the Medigap Coverage Chart Change Over Time?

The Medigap coverage chart does change over time. However, this does not happen frequently. The last time the plans were “reshuffled” was 2010. At that time, Plans H and J were eliminated and two new plans – Plan M and Plan N – were added.

The next change in the Medigap coverage chart occurred for plans effective on and after 1/1/2020. During this change, Plan F (and Plan C) were eliminated as an option for new enrollees.

It is important to note that, in 2020 when Plan F was eliminated as an option, people that were already on that plan were “grandfathered in” and able to keep that plan. This is also true of any other changes to the Medigap plans. Any time the chart changes it does not affect people who already have those plans, as Medigap plans are “guaranteed renewable” and coverage does not change over time.

What Companies Go by This Chart?

Any company that wants to offer Medigap plans is required to offer the standardized plans. In other words, if you are going to sell a plan to supplement Medicare, your plan design must meet the coverage set forth in one of these standardized plans.

There are a few unique exceptions to this, but those are state-specific, not company-specific. Read more below.

Are There Exceptions to This Chart?

The exceptions to the requirement of standardized Medigap plans are state-specific. There are a few states in which the plans do not go by the above Medigap coverage chart. These states are: Massachusetts, Minnesota and Wisconsin.

Comparing Medigap plans in these states can be a little more cumbersome and difficult, since most of the information is tailored around the ten standardized Medigap plans that other states use. However, even in those states, the plans are still standardized (they just use a different chart showing what plans cover).  You can see more information about two of those states here: Minnesota Medigap plans / Wisconsin Medigap plans.

Now that you know what each plan covers, compare options to determine which plan and price is best for you.