Medicare Supplement Plans

A Medicare supplement (Medigap) insurance, sold by private companies, can help pay some of the health care costs that Original Medicare doesn't cover, like copayments, coinsurance, and deductibles.

Some Medigap policies also offer coverage for services that Original Medicare doesn't cover, like medical care when you travel outside the U.S. If you have Original Medicare and you buy a Medigap policy, Medicare will pay its share of the Medicare-approved amount for covered health care costs. Then your Medigap policy pays its share.

A Medigap policy is different from a Medicare Advantage Plan. Those plans are ways to get Medicare benefits, while a Medigap policy only supplements your Original Medicare benefits.

8 things to know about Medigap policies

    1. You must have Medicare Part A and Part B.
    2. If you have a Medicare Advantage Plan, you can apply for a Medigap policy, but make sure you can leave the Medicare Advantage Plan before your Medigap policy begins.
    3. You pay the private insurance company a monthly premium for your Medigap policy in addition to the monthly Part B premium that you pay to Medicare.
    4. A Medigap policy only covers one person. If you and your spouse both want Medigap coverage, you'll each have to buy separate policies.
    5. You can buy a Medigap policy from any insurance company that's licensed in your state to sell one.
    6. Any standardized Medigap policy is guaranteed renewable even if you have health problems. This means the insurance company can't cancel your Medigap policy as long as you pay the premium.
    7. Some Medigap policies sold in the past cover prescription drugs, but Medigap policies sold after January 1, 2006 aren't allowed to include prescription drug coverage. If you want prescription drug coverage, you can join a Medicare Prescription Drug Plan (Part D).
    8. It's illegal for anyone to sell you a Medigap policy if you have a Medicare Medical Savings Account (MSA) Plan.

Medigap policies don't cover everything

Medigap policies generally don't cover long-term care, vision or dental care, hearing aids, eyeglasses, or private-duty nursing.

Insurance plans that aren't Medigap

Some types of insurance aren't Medigap plans, they include:

  • Medicare Advantage Plans (like an HMO, PPO, or Private Fee-for-Service Plan)
  • Medicare Prescription Drug Plans
  • Medicaid
  • Employer or union plans, including the Federal Employees Health Benefits Program (FEHBP)
  • TRICARE
  • Veterans' benefits
  • Long-term care insurance policies
  • Indian Health Service, Tribal, and Urban Indian Health plans

Dropping your entire Medigap policy (not just the drug coverage)

If you decide to drop the entire Medigap policy, you need to be careful about the timing. For example, you may want a completely different Medigap policy (not just your old Medigap policy without the prescription drug coverage), or you might decide to switch to a Medicare Advantage Plan that offers prescription drug coverage.

If you drop your entire Medigap policy and the drug coverage wasn't creditable or you go more than 63 days before your new Medicare coverage begins, you have to pay a late enrollment penalty for your Medicare Prescription Drug Plan, if you choose to join one.

 

Medicare Advantage Plans

A Medicare Advantage Plan is a type of Medicare health plan offered by a private company that contracts with Medicare to provide you with all your Part A and Part B benefits. Medicare Advantage Plans include Health Maintenance Organizations, Preferred Provider Organizations, Private Fee-for-Service Plans, Special Needs Plans, and Medicare Medical Savings Account Plans. If you're enrolled in a Medicare Advantage Plan, Medicare services are covered through the plan and aren't paid for under Original Medicare. Most Medicare Advantage Plans offer prescription drug coverage.

How do Medicare Advantage Plans work?

Medicare Advantage Plans, sometimes called "Part C" or "MA Plans," are offered by private companies approved by Medicare. If you join a Medicare Advantage Plan, you still have Medicare. You'll get your Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance) coverage from the Medicare Advantage Plan and not Original Medicare.

Medicare Advantage Plans cover all Medicare services

Medicare health plans provide Part A and Part B benefits to people with Medicare who enroll in these plans, which include Medicare Advantage Plans, Medicare Cost Plans, Demonstration/Pilot Programs, and Programs of All-inclusive Care for the Elderly (PACE).

Medicare Advantage Plans must follow Medicare's rules

Medicare pays a fixed amount for your care each month to the companies offering Medicare Advantage Plans. These companies must follow rules set by Medicare.

However, each Medicare Advantage Plan can charge different out-of-pocket costs and have different rules for how you get services (like whether you need a referral to see a specialist or if you have to go to only doctors, facilities, or suppliers that belong to the plan for non-emergency or non-urgent care). These rules can change each year.

Costs for Medicare health plans

Find out what factors contribute to how much you pay out-of-pocket when you have a Medicare health plan.

Drug coverage in Medicare Advantage Plans

You usually get prescription drug coverage through the plan. In some types of plans that don't offer drug coverage, you can join a Medicare Prescription Drug Plan.

You can't have prescription drug coverage through both a Medicare Advantage Plan and a Medicare Prescription Drug Plan. If you're in a Medicare Advantage Plan that includes drug coverage and you join a Medicare Prescription Drug Plan, you'll be dis-enrolled from your Medicare Advantage Plan and returned to Original Medicare.

Next Steps...

All Rights Reserved Health Benefit Options

This is a proprietary website. and is not, associated, endorsed or authorized by the Social Security Administration, the Department of Health and Human Services or the Center for Medicare and Medicaid Services. This site contains decision-support content and information about Medicare, services related to Medicare and services for people with Medicare. If you would like to find more information about the Medicare program please visit the Official U.S. Government Site for People with Medicare located at http://www.medicare.gov