Medicare Supplements, also known as Medigap plans, work alongside Original Medicare (Parts A and B) to help cover the out-of-pocket costs that Medicare doesn’t pay for. Here’s how it works:
Medicare Parts A & B Overview:
- Part A: Hospital insurance (covers inpatient stays, skilled nursing care, hospice, and home health services).
- Part B: Medical insurance (covers doctor visits, outpatient care, certain preventive services, and medical supplies).
What Medicare Supplements Cover:
Medicare Supplement plans are designed to fill in the “gaps” in coverage left by Original Medicare (Parts A and B). The gaps include:
- Coinsurance: The amount you pay for services after Medicare has paid its share.
- Copayments: Fixed costs for certain services or items.
- Deductibles: The amount you must pay before Medicare starts to pay.
Each Medigap plan (there are 10 standardized plans: A through N) offers different coverage levels. Some may cover things like:
- Part A coinsurance and hospital costs (after Medicare benefits are used up).
- Part B coinsurance or copayment (usually 20% of the cost of services).
- Blood (first 3 pints) for a transfusion.
- Skilled nursing facility coinsurance.
- Part A deductible and Part B deductible (depending on the plan).
- Emergency travel coverage (outside the U.S.).
How It Works:
- Original Medicare pays first: When you receive a Medicare-covered service, Medicare pays its share of the approved amount.
- Medigap pays second: After Medicare pays its part, the Medigap plan will cover some or all of the remaining costs, depending on the specific Medigap plan you have.
- You pay any remaining balance: If there’s any cost left that’s not covered by Medicare or your Medigap plan, you would be responsible for paying that amount.
For example, if you have a Medigap Plan G (one of the more comprehensive plans), it will cover:
- Part A coinsurance and hospital costs.
- Part B coinsurance (the 20% Medicare doesn’t cover).
- Part A deductible.
- Part B excess charges (if a provider doesn’t accept Medicare assignment).
You would still have to pay the monthly premium for the Medigap plan, and Medicare Part B also requires a premium, but Medigap reduces your overall out-of-pocket expenses.
Key Points:
- Medigap only works with Original Medicare (Parts A and B). It doesn’t work with Medicare Advantage (Part C) plans.
- Medigap plans are offered by private insurance companies.
- You need to enroll in Medicare Part A and Part B first before purchasing a Medigap plan.
Does that help clarify things? If you have a specific plan in mind or want to know more about how a particular Medicare Supplement(Medigap) plan works, feel free to fill out our contact form.