You've worked hard all your life, and you've finally made it to your Golden Years: life stretches out in front of you, with ample opportunity to finally do those things you always dreamed of but never had time for. Take up gardening or early morning Tai Chi, travel the world, enjoy the grandkids and teach them how to bake cookies, learn to play the cello, start a book club, or join a bowling league. The last thing you want to do is worry about rising healthcare costs, disease, or financial insecurity, let alone the hassle of completing miles of government paperwork, and who can blame you? Still, a little bit of hassle now can help with the other concerns on that laundry list. So let's see where to start.
Just what are Medicare Supplement Plans, anyhow?
The first thing to do is understand the different options available to you. Medicare is available for people over 65, or who have certain types of conditions and receive Social Security Disability Insurance. They're divided into three parts: A, B, and C. Part A covers approved inpatient costs, and Part B focuses on providing approximately 80% of your outpatient costs. Part C (also called Medicare Advantage), isn't really separate health insurance, but rather allows private health insurance companies to provide Medicare benefits.
Medicare Supplement Plans or Medigap were created to complement Original Medicare by addressing the places where its coverage falls short. Though these are private insurance plans and charge premiums, they are regulated by the government, and therefore must follow strict guidelines regarding coverage. Though you may have Medicare already, Medigap is only a guaranteed right for people over 65, within six months of enrolling in Medicare Part B. However, 27 states do currently require that insurers sell some sort of Medigap policy to beneficiaries under the age of 65.
How many Medicare Supplement Plans are there? And how are they different from each other?
Medicare Supplement Plans, also called Medigap Plans, are standardized across most of the United States, though there are some exceptions. Each of the ten plans is designated a letter: A, B, C, D, F, G, K, L, M, and N. Though these plans are provided by private insurance companies, all plan types with the same letter must offer the same set of basic benefits, regardless the location.
That's the reason why most, if not all, Medicare Supplement Insurance Plan explanations feature a handy chart detailing those benefits:
You'll see that there are some elements which are always covered, no matter what. For instance, during most hospital stays, Medicare will cover the first sixty days, minus a deductible. After that period, beneficiaries are charged ever-increasing fees until the 151st day, after which Medicare coverage ends. All Medigap plans pay for those copay fees, as well as 100% of an additional 365 days. Likewise, since Medicare typically only covers 80% of Part B coinsurance or copayments, all Medigap plans pay for some or all of the remaining 20% cost. This is also true for the first three pints of blood needed, and for Part A hospice care coinsurance or copayments.
Plan A & Plan B
These are the two most basic Medigap plans. As mentioned above, they offer 100% coverage of Medicare Part A coinsurance and hospital costs, Part B coinsurance or copayments, the first three pints of blood, and Part A hospice care or copayments. The only difference between Plans A and B is that Plan B also covers Medicare Part A's deductible.
Plan C & Plan D
Both Plan C and D add onto Plan B's coverage by also offering skilled nursing facility care coinsurance, and up to 80% coverage of any foreign travel emergency you might have (up to coverage limits, of course). The only real difference between these plans is that Plan C also covers Part B's full deductible.
Plan F
This is universally one of the most popular Medicare Supplement Insurance health plans, due to its comprehensive coverage of certain health costs. These include the deductibles for Medicare Parts A & B, coinsurance for both Parts A & B, as well as Part A hospice coinsurance, the first three pints of blood used in a procedure, skilled nursing facility care coinsurance, and travel coverage outside of the United States (up to plan limits).
Plan G
This plan offers all of the benefits as Plan F, except for the Part B deductible.
Plan K & Plan L
These plans' coverages are among the least comprehensive in the group. They only offer 100% coverage for Medicare Part A coinsurance and hospital costs, and varying percentages (Plan L covers more than K) thereafter for Medicare Part B coinsurance or copayments, the first three pint of blood, Part A hospice care or copayments, skilled nursing facility care coinsurance, and Part A deductibles. There are also out-of-pocket limits, after which Medigap pays 100% of covered services for the rest of the year.
Plan M & Plan N
These last two plans also cover varying percentages of benefits, with N being slightly more comprehensive than M. Though both plans cover all of Medicare Part A coinsurance and hospital costs, as well as Part B coinsurance or copayments, Plan N may have copayments of up to $20 for some office visits, and some emergency room visits that don't result in hospital admissions may charge $50 in copayments. Other than that, both plans also cover the first three pints of blood, Part A hospice care copayments or coinsurance, and skilled nursing facility care coinsurance. However, Plan M only covers half of Part A's deductible, though Plan N covers it completely. Both M & N cover 80% of foreign travel emergencies.