A Medicare Supplement Insurance Plan (lettered Plans A-N) are also known as Medigap. This is health insurance you purchase from a private health insurance company to help cover some of the missed costs with Original Medicare Parts A and B; costs like deductibles and co-pays and coinsurance. Medigap plans are standardized or regulated by the Federal Government. So each plan works exactly the same way in all states, the benefits are exactly the same in each plan from insurance company to insurance company. So plan G is the same in every state across the country as example. 

The plans are differentiated by letters to distinguish the different plan options. Plans A-N. See the chart to see the difference in health coverage. If you turned 65 after Jan 1, 2020 you are not eligible for plans C, F and High Deductible F. If you turned 65 after Jan 1, 2020 and you would want the most comprehensive coverage available – you would be choosing Plan G.

These plans vary in monthly premium depending on how much out of pocket you are willing to incur. These plans also can vary greatly in monthly premium depending on what insurance company you choose. This is why it’s important to work with a broker to help you find the most cost effective and rate stable plan in your state all coming from a reputable and well rated company.

These plans do not provide any prescription drug coverage, dental or routine vision or hearing benefits. However, many of the insurance companies that offer Supplemental or Medigap plans offer different discounts for things like vision, gym memberships, etc.

When you choose a Medigap plan – you will have the option to purchase a Prescription Drug plan that is specifically for people on Medicare.

More information regarding how Supplement or Medigap insurance works:

When you have Medigap or Supplemental Insurance – your provider will send the medical bills to Original Medicare. The portion of your bill that is not covered like the deductibles and coinsurance that are not covered by Medicare are then sent to your private health insurance company. Depending on what lettered plan you have for insurance will depend on how much out of pocket you will have remaining.

Medicare Supplement Insurance covers the “out-of-pocket” gaps. Depending on what policy you choose will determine the amount of “out-of-Pocket” you will be responsible for.

There are many plans to choose from and it is important to understand what is not covered in each plan.

There are some things not covered by Original Medicare and they are also not covered by your supplement plan. Some of the items not covered include routine dental, vision and hearing exams. Hearing aids, glasses and contacts. Custodial care or long term care is not covered. There are others but these are most asked about. 

What is the difference between Medicare Advantage Plans and Medicare Supplemental Insurance?

It is very important to understand the difference between these two type of insurance and your choices within each option. When you have a Medigap plan combined with your Original Medicare – this means that Original Medicare will pay first on your medical expenses and then your Medigap will pay second. Depending on what plan you choose (plans A-N) will then determine your financial responsibility remaining left to be paid to your medical provider.

When you have a Medicare Advantage Plan – you are electing to have a private health insurance company “manage” your Original Medicare. You will still be paying your Part B premiums to the government so that you have both parts A and B. Then those benefits are from Part A and Part B are thrown into a plan that gives you expected copay amounts for medical services. Many of these plans also give you things like prescription drug coverage, dental, vision, gym benefits and a slew of other possible benefits. When you elect to take Medicare Advantage your electing to have the plan or insurance company be your primary insurance and you will be paying copays and possibly coinsurance as the secondary payer. You will not be showing your Original Medicare card to your providers since your Part A and Part B of your Original Medicare are included in your Medicare Advantage Plan.

Let's compare Medigap and Medicare Advantage directly.

Medigap

• Higher premiums but no co-pays
• Freedom to choose doctors
• No referrals necessary
• Some routine services not covered (vision, hearing)
• Covered anywhere in US

Medicare Advantage

• Generally lower premiums but has co-pays
• May be restricted to network
• May need referrals for specialists
• May include extra benefits (vision, hearing, fitness) 
• Emergency services only outside service area

There is a lot to consider when making these decisions. Working with a broker who can compare and explain the differences in these choices and help breakdown the cost difference with your health, lifestyle and budget in mind will help you the most.