Medicare Supplement (Med Supp or Medigap)

A Medicare Supplement policy (also known as "Medicare Supplement", "Med Supp", and "Medigap") is health insurance sold by private insurance companies to fill the "gaps" in Original Medicare Plan coverage. Medicare Supplement plans help pay some of the health care costs that Original Medicare doesn't cover. If you are in the Original Medicare Plan and have a Medicare Supplement policy, then Medicare and your Medicare Supplement policy will pay both their shares of covered health care costs.

Generally, when you buy a Medicare Supplement policy you must have Medicare Part A and Part B.

You and your spouse must each buy separate Medicare Supplement policies. Your Medicare Supplement policy won't cover any health care costs for your spouse.

Plan Types

Insurance companies can only sell you a "standardized" Medicare Supplement policy. These Medicare Supplement policies must all have specific benefits so you can compare them easily.

You may be able to choose up to 12 different standardized Medicare Supplement policies (Medicare Supplement Plans A through L). Medicare Supplement policies must follow Federal and State laws. These laws protect you. A Medicare Supplement policy must be clearly identified on the cover as "Medicare Supplement Insurance." Each plan, A through L, has a different set of basic and extra benefits.

The benefits in any Medicare Supplement Plan A through L are the same for any insurance company. Each insurance company decides which Medicare Supplement policies it wants to sell. Not all types of Med Supp policies may be available in your state (e.g., Massachusetts, Minnesota and Wisconsin). If you need more information about Med Supp policies in your state, call your State Insurance Department or State Health Insurance Assistance Program.

What Med Supp Plans A through L Cover
Source: Information from the official government handbook published by the Centers for Medicare and Medicaid Services: Choosing a Medigap Policy 2009.
Med Supp Benefits	A	B	C	D	E	F*	G	H	I	J*	K	L
Medicare Part A Coinsurance and all costs after hospital benefits are exhausted
Medicare Part B Coinsurance or Copayment for other than preventive services											50%	75%
Blood (First 3 Pints)											50%	75%
Hospice Care Coinsurance or Copayment											50%	75%
Skilled Nursing Facility Care Coinsurance											50%	75%
Medicare Part A Deductible											50%	75%
Medicare Part B Deductible
Medicare Part B Excess Charges							80%
Foreign Travel Emergency (Up to Plan Limits)**
At-Home Recovery (Up to Plan Limits)
Medicare Preventive Care Part B Coinsurance
Preventive Care not Covered by Medicare (up to $120)
2009 out-of-pocket limit * Medigap Plans F and J also offer a high-deductible option. You must pay for Medicare-covered costs up to the high-deductible amount ($2,000 in 2009) before your Medigap policy pays anything. ** You must also pay a separate deductible for foreign travel emergency ($250 per year). *** After you meet your out-of-pocket yearly limit and your yearly Part B deductible ($135 in 2009), the plan pays 100% of covered services for the rest of the calendar year.											$4,620***	$2,310***

The Cost of Medicare Supplement Plans

Though policies with the same name cover the same benefits, the price may differ from company to company. Insurance companies offering Medicare Supplement plans set their own premiums that can be priced, or "rated," according to your community, the age at which you purchased the policy or the age you are during each year you hold the policy.

Because you need to have Medicare Part A and Part B to get a Medicare Supplement policy, you have to pay the monthly Medicare Part B premium as well as a premium to the Medicare Supplement insurance company.

Each insurance company decides how it will set the price, or premium, for its Medicare Supplement policies. It is important to ask how an insurance company prices its policies. The way they set the price affects how much you pay now and in the future. Medicare Supplement policies can be priced or "rated" in three ways:

1. Community-rated (also called "no-age-rated")
2. Issue-age-rated
3. Attained-age-rated

Each of these ways of pricing Medicare Supplement policies is described in the following chart. The examples show how your age affects your premiums, and why it is important to look at how much the Medicare Supplement policy will cost you now and in the future. The amounts in the examples aren't actual costs.

When you may enroll in and switch Medicare Supplement plans

You may enroll in a Medicare Supplement plan during the six month period starting on the first day of the month in which you are 65 years or older and enrolled in Medicare Part B (the "open enrollment" period).

If your open enrollment period has passed, insurance companies are able to decline your Medicare Supplement application. This is one reason why it is important to apply for a Medicare Supplement plan within six months of when you first become eligible. Once you are accepted for a policy, it will automatically renew as long as you pay your premiums.

If you apply for a Medicare Supplement plan, you have a "free look" period of 30 days to decide if you like your new policy. The 30-day period begins on the first day the policy is active. If you decide to cancel your policy during the "free look" period, and if you are inside your open enrollment period, you can apply and be approved for a new Medicare Supplement plan. If you are outside your open enrollment period, your application can be declined. This is why people who are applying for a new Medicare Supplement plan should not cancel any current plan until they are approved for the new plan.