The ABCs of Medicare Supplement Plans

Part One: What is a Medicare Supplement Plan and what are the costs

     If you are already covered by Medicare Part A and Part B and you usually visit your doctor, you probably already know that there are some costs you have to pay because your Medicare does not cover them, like Medicare premium, coinsurance, copayments and annual deductibles. If this is your case, getting a Medicare Supplement Plans 2018 may help you cover some of these costs and save some pennies.

What is a Medicare Supplement Plan?

     Medicare Supplement Plans, also known as “Medigap”, were created to fill in the gaps in the coverage of Original Medicare. This means that they help paying some of the costs Original Medicare does not cover, such as coinsurances, copayments and deductibles. Depending on the Medigap plan you get, they can also cover extra services, like foreign travel emergency care or a Skilled Nursing Facility coinsurance.  There are 10 standardized Medigap Plans and each of them is identified by a letter: A, B, C, D, F, G, K, L, M, and N. They are offered by private insurance companies and they are available in all of the states except for Minnesota, Massachusetts and Wisconsin in which they offer Medigap plans with benefits and insurance options that differ from the rest of the country. In the past there were also Plans E, H, I, and J but they are not available anymore.

Although, the level of coverage is different depending on the Medigap, they include the same standardized benefits no matter what the state or the insurance company is. This means that if you are in Georgia, the benefits of Medigap Plan C will be the same as the ones of Medigap Plan C in Pennsylvania.  All insurance companies that are licensed to sell Medigap must offer at least Medigap Plan A and if they offer any other plan in addition to Plan A, they must also offer either Plan C or Plan F. When getting a Medigap make sure that the company where you are doing it is licensed to sell them.

What are Medicare copayments, coinsurance and deductibles?

     Before going into the coverage of Medicare Supplement Plans, it is important to understand the definition of the things covered by them. These are the costs you would have to pay if you did not have Medigap because they are not covered in Original Medicare.  First, there are Medicare copayments, which are out-of-pocket payments that you make for your share of the health-care cost and whose amounts are often pre-established. A person is in charge of a copayment amount when he or she receives most Medicare-covered services or any additional covered services like x-rays. This also applies to covered prescription medications the person takes.

Then there is Medicare coinsurance, which is an out-of-pocket payment that you make for your part of the health-care cost and this coinsurance structure is related to the benefits offered by Medicare Part B. The difference between this and copayments is that coinsurance amounts vary depending on the service and they are often a percentage, so you pay for a small portion while Medicare pays the other portion. There are also annual deductibles which are an amount of money you have to pay for your health care or prescription medications before your Medicare insurance starts paying for your health care or medications and they vary depending on your Medicare plan.  Finally, there is a maximum out-of-pocket limit that is only covered in a few Medigap plans. An out-of-pocket limit is an annual limit on your out-of-pocket spending for Medicare-covered services. This means that when a person reaches the maximum spending limit of his or her plan, the plan will cover 100% of the cost for covered services, and the person won’t have to pay anything else for the rest of the year.