Medigap: How to Choose a Medicare Supplement Plan

Fran
Fran Majidi
March 2, 2020

Millions of Americans have Medicare but they are unsure how Medicare Supplements work. Or, they stall on learning more about it only to realize it may benefit them. By then they are stuck with a permanent fine for enrolling late!

We’re going to tell you exactly what you need to know in order to decide if you need Medicare Supplements, a product often called Medigap.

When you first enroll in Medicare, you can decide if you want Original Medicare (Part A and Part B) or Medicare Advantage (Part C). You can’t have both. Medicare Advantage is simply the private form of Medicare, but not necessarily a more expensive option. Compare prices with an agent to see which is better for you.

If you opt for Original Medicare, you can buy Medicare Supplement Insurance (also called Medigap), which helps pay for many out-of-pocket expenses.

Regulated by Federal and State Laws

One good thing about Medigap policies is that they are all regulated by federal and state laws to protect consumers. All the Medicare Supplement Insurance plans are identified by letters. Different letters offer different things.

A & B are original Medicare, C is private Medicare, D is Prescription drug plan and so on (see graph below). All plans under a letter must offer the same core benefits as others in the same category, but some plans will have other benefits on top of the basics. When you speak with an agent, ask how the plans he/she is comparing for you differ from one another.

Not all health insurance companies sell Medigap policies. If they do, they are not required to offer every plan (or every letter). However, if a company offers a Medigap plan, it must offer Medigap Plan A. They must offer C and F if they offer any plan.

Is Medicare Coverage Free?

No, in 2020, average monthly premiums for Medicare Part B were $144.60 or higher, depending on income. You also have a deductible and coinsurance for Part A and Part B. A Medigap plan may help pay for these additional costs.

If you are unable to pay for coverage, the state may help you with the cost. You’d need to contact your local health and human services for assistance applying. Your coverage would work just like anyone else’s Medicare plan.

Is Prescription Drug Coverage Included in Medicare?

For Medicare Advantage members, your drug plan is included in your coverage (Part C, which is a combination of Part A, Part B and Part D).

If you are an Original Medicare member and want prescription drug coverage, you must choose a Medicare Prescription Drug Plan (Part D) and pay a monthly premium.

Medicare Part D is the only option for a prescription drug plan. You need to choose this if you want coverage for your prescription medications. If you do not choose it when you first sign up for Medicare, you’ll be fined for joining later on. You’ll have to pay this penalty charge for as long as you have Medicare Part D.

What Is Medicare Part C?

Medicare Part C is Medicare Advantage, the private alternative to Original Medicare. It replaces Medicare Part A and B

How Many Medigap Plans Are There?

Medicare Supplement Plans Comparison Chart



In most states there are 10 Medigap Plans and each one covers different things. In some states, Plans F and G also offer a high-deductible plan. The option allows Medicare recipients to pay up to the deductible amount ($2,340 in 2020) before the policy begins to cover visits and services.

Plans C and F are not available to new Medicare recipients.

Plans K and L pay 100% of covered services after you meet out-of-pocket limits and pay your annual Part B deductible ($198 in 2020).

Plan N pays 100% of Part B coinsurance, except copays up to $20 and emergency room visits up to $50 (if you are not admitted).

The Following States Standardize Medigap Plans Differently:

Massachusetts, Minnesota and Wisconsin offer each medigap plan but with different coverages. It’s best to speak with a trusted agent if you’re shopping for Medicare Supplements.

New Medicare Regulations Starting January 2020

Medigap plans sold to people on or after January 2020 will not cover the Part B deductible.

Plans C and F are not available to new Medicare recipients who enrolled January 1, 2020 or later.

Can I get Medicare Advantage (Part C) and Medicare Prescription Drug (Plan D)?

No, if your Medicare Advantage Plan includes prescription drug coverage and you join a Medicare Prescription Drug Plan (Part D), you’ll go back to Original Medicare.

What Are My Drug Coverage Choices?

It can be confusing finding the right Medicare formula to fit your needs at the most reasonable price. It’s always a good idea to do some research, to familiarize yourself with how Medicare works and to see your options. Then, speak with a trusted agent who can help guide you through the buying process.

Some people have other forms of prescription drug coverage. For example, they may have drug coverage from an employer, union or some other source. If you have another plan, it’s important to see how these drug programs work with one another, where they overlap and where they leave gaps.

Medicare Drug Coverage Cost

When you elect a medicare drug coverage plan (Part D), you will have these expenses:

  • Premium
  • Yearly deductible
  • Copayments or coinsurance
  • Cost if you pay a late enrollment penalty (which lasts as long as you have your plan).

People’s rates vary for Part D coverage because everyone takes different medications. Your costs will vary according to which pharmacy you use (some plans require that you use in-network pharmacies). Your medication may or may not be in a plan’s formulary. If it is not, you will pay more for your medication. The plan you choose will also differ in price compared with another plan.

There is a plan called Extra Help that helps lower-income Medicare recipients pay Medicare Part D expenses. To find out if you qualify contact your local health and human services department or contact Medicare directly.

Compare Medicare Plans Online Now.

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