What is a Medicare Supplement plan and how does it work?

Looking to choose a Medicare plan and considering a Medicare Supplement for the first time? There’s a reason over 14 million Americans have a Medicare Supplement plan alongside their Original Medicare. Here’s how Medicare Supplement insurance works, what it covers and how to get started.

What is a Medicare Supplement plan?

A Medicare Supplement plan (also known as Medigap) is additional insurance you can buy that helps cover the out-of-pocket costs left behind by Original Medicare. These plans are provided by private health insurance companies, so price can vary. However, all Medigap policies are standardized, which means that they offer the same basic benefits regardless of where you live or who you buy your plan from.

A Medicare Supplement plan is a good choice for those who may need some help with copays, coinsurance and deductibles. Additionally, Medicare Supplement insurance is a good choice if you:

  • Want access to any U.S. doctor, clinic and hospital that accepts Medicare
  • Are OK with getting Part D drug coverage via a separate plan
  • Like to travel
  • Might move to another state and want to keep your plan

How does a Medicare Supplement plan work?

If you have a Medicare Supplement plan, you can still see any doctor who accepts Medicare. There’s no network to worry about, and most doctors accept Medicare, but make sure to confirm with your doctor beforehand.

When you receive care, make sure to bring along your official Medicare card and your Supplement plan ID card. This will help ensure that your medical claims get paid properly.

How do your medical claims get paid?

Before your supplement kicks in, Original Medicare will first pay its portion of your costs. In some cases, there might be annual deductibles or cost shares that apply, so make sure to check with your plan for details. After Medicare contributes, your Supplement plan will pay its share of the remaining cost.

You can call your plan’s Member Services team with questions about how they paid your claim. Or if you have questions about how much Original Medicare pays for covered services, you can call 1-800-MEDICARE for 24/7 assistance.

Medicare Supplement plan coverage and cost

Medicare Supplement insurance can be confusing. Here’s some important information you should know about enrollment, renewal, plan coverage and potential out-of-pocket costs.

Who can enroll in a Medicare Supplement plan?

To enroll in a Medicare Supplement plan, you must first be enrolled in both Medicare Part A and Part B, i.e., Original Medicare. You become eligible to enroll in Original Medicare three months before turning 65. You also must live in the service area where your plan is offered.

Medigap and disability

In some instances, disability may make someone eligible to enroll in Medicare before the age of 65. What does this mean for Medicare Supplement coverage? Can younger Medicare members apply? Whether or not you qualify for a Medigap plan before you turn 65 depends on which state you live in.

When can you enroll in a Medicare Supplement plan?

You can enroll in a Medicare Supplement plan when you are eligible for Part B and for the following six months. If you apply after six months, you may have to include your health history for approval – this may impact whether you’re approved as a plan enrollee or not. Depending on your situation, you may be eligible to buy a Medigap plan outside of Medigap Open Enrollment Period.

When can you renew your Medicare Supplement plan?

Medicare Supplement plans automatically renew each year. You should receive a mailing in the fall that will inform you of any changes in monthly cost. This differs from Medicare Cost, Medicare Advantage and Medicare Prescription Drug plans renewal. The Centers for Medicare & Medicaid Services (CMS) requires those types of plans to send you an Annual Notice of Changes by Sept. 30 every year.

It’s important to review your renewal mailing because the Medicare Annual Enrollment Period for other types of plans is Oct. 15 through Dec. 7. If you want to switch from a Supplement plan to something else, like Medicare Advantage, you’ll need to act by Dec. 7.

What does a Medicare Supplement plan cover?

As mentioned, Original Medicare will pay your medical and hospital-related health service costs first. This includes things like in-patient hospital stays, routine doctor visits, and some diagnostics and outpatient procedures.

Then, depending on coverage, your Supplement plan will kick in, paying some of the remaining costs for copays, coinsurance or deductibles. Some plans may include a limit on both how much you pay and how much your insurance provider pays for certain benefits each year.

Supplement plans may also pay for Medicare-covered preventive screenings and immunizations. If you’ve had Part B for more than 12 months, you can also get an Annual Wellness visit, which is a check-in during which you can discuss your health with your doctor.

Some Supplement plans cover services that Medicare doesn’t cover, like routine physical, eye or hearing exams. Check with your plan for available options.

Also, in terms of limitations, most outpatient prescription medicines are not covered by a Medigap plan. If you want prescription drug coverage, you’ll need to buy a separate Medicare Part D plan.

What does a Medicare Supplement plan cost?

The cost of Medicare Supplement insurance is paid through a monthly premium and varies from plan to plan. Cost depends on the level of coverage you choose and, in many instances, your age, tobacco use or health history. Because of this, cost options can vary dramatically. However, most plans average around $150 per month.

Benefits of a Medicare Supplement plan

A Medicare Supplement plan can help provide financial protection, so you don’t encounter surprise out-of-pocket costs. But what else can you expect from your plan? Here’s why so many Medigap plan holders love their coverage.

Your plan travels with you

Supplement plans can travel with you if you visit or move to a different state. However, some plans may charge a higher monthly premium if you live outside of the state in which you purchased your plan.

There’s no network

Most Medicare Supplement plans don’t have network limitations. This means that you have access to any U.S. doctor, clinic and hospital that accepts Medicare.

Your plan is secure

Supplement insurance is “guaranteed renewable,” meaning that if you pay your premiums, your policy can’t be canceled.