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Could a Medicare Supplement Insurance Plan Help If You Have a Low Income?


Some people who are over 65 and qualify for a Medicare Supplement (Medigap) insurance plan may be retired and on limited or low incomes. If this is true for you, you may need to carefully consider how much you are spending on health-care costs and ways that you can save in the long term. A monthly premium is required for a Medicare Supplement insurance plan and since these plans are offered by private health insurance companies, there are no specific discounts or subsidies for low-income applicants. However, a Medicare Supplement insurance plan might help someone with a low income pay for health care by covering some of Original Medicare’s copayments, coinsurance and deductibles.

A good way to decide if a Medicare Supplement insurance plan may be a smart choice for you financially could be to understand what services a specific Medicare Supplement insurance plan may cover. If you think there is a good chance you will face many Medicare out-of-pocket costs that a particular Medicare Supplement insurance plan may cover, then the plan could be worth the monthly premium to you. There are up to 10 Medicare Supplement insurance plans available in most states, labeled A, B, C, D, F, G, K, L, M and N. (E, H, I, and J are not available.)

What benefits Medicare Supplement insurance plans may cover

Medicare Supplement insurance plan cover as few as four and up to nine of the following nine benefits:

  • Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used up
  • Part B coinsurance
  • The first 3 pints of blood for a medical procedure
  • Part A hospice care coinsurance or copayment
  • Skilled nursing facility care coinsurance
  • Part A deductible
  • Part B deductible
  • Part B excess charge
  • Emergency care during foreign travel (at 80%, up to plan limits)

Now let’s look at what these benefits would cost you without a Medicare Supplement insurance plan.

Costs without a Medicare Supplement insurance plan

Please note that the coverage listed below refers to the standardized Medicare Supplement insurance plans available in most states. Massachusetts, Wisconsin, and Minnesota have their own standardized plans that might have different coverage than this section describes.

  • Medicare Part A coinsurance in 2018 is as follows:
    • $0 for days 1-60 of a hospital stay for each benefit period.
    • $335 per day for days 61-90 of a hospital stay for each benefit period.
    • $670 for days 91 and beyond of a hospital stay for each benefit period – these are called lifetime reserve days. Beyond the lifetime reserve days (up to 60 days in your lifetime) you pay all costs.

    All Medicare Supplement insurance plans cover Medicare Part A coinsurance at 100% for 365 additional days after your Medicare benefits are used up.

  • Medicare Part B coinsurance is typically 20% of the Medicare-approved amount for most doctor services, outpatient therapy, and durable medical equipment. All Medicare Supplement insurance plans cover Part B coinsurance at least 50%.
  • Blood may not cost you if the provider gets it from a blood bank at no charge. However, under both Medicare Part A and Medicare Part B, if the provider has to buy blood for you, you must pay for the first three units of blood you get in a calendar year. Your other option would be to donate the blood in advance or have the blood donated by someone you know who is a compatible blood type. All Medicare Supplement insurance plans cover blood at least 50%.
  • The cost of hospice care is usually $0 under Medicare, but there is a copayment of $5 for each prescription drug and a 5% copayment for the Medicare-approved amount for inpatient respite care. All Medicare Supplement insurance plans cover Part A hospice care or coinsurance at least 50%.
  • Under Medicare Part A, you typically pay $0 for days 1-20 in a skilled nursing facility for each benefit period. In 2018, you pay $167.50 coinsurance per day for days 21-100 in a skilled nursing facility for each benefit period. For days 101 and later you generally pay all costs. All Medicare Supplement insurance plans except Plan A and Plan B cover skilled nursing facility coinsurance. (Note that Medicare Supplement insurance Plan A and Plan B are not the same as Medicare Part A and Part B.)
  • The Medicare Part A deductible is $1,340 for each benefit period in 2018. All Medicare Supplement plans except Medicare Supplement insurance Plan A cover the Medicare Part A deductible at least 50%. The Medicare Part B deductible is $183 per year in 2018. Only Medicare Supplement insurance Plans C and F cover the Part B deductible.
  • An excess charge is the difference between the amount a health-care provider is legally permitted to charge and the Medicare-approved amount. Only two Medicare Supplement insurance plans, F and G, cover the Part B excess charge.
  • In general, Medicare does not cover health care you get when traveling outside the U.S. and its territories. You would have to pay out-of-pocket for all your foreign travel health expenses without additional insurance like a Medicare Supplement insurance plan. Medicare Supplement insurance plans C, D, F, G, M and N cover may cover medical emergencies during foreign travel up to 80%, up to plan limits.

Consider which benefits you may need and which Medicare Supplement insurance plan has those benefits. Then consider the health-care costs you would have to pay out-of-pocket compared to the costs of a Medicare Supplement plan monthly premium and you will be able to decide if a Medicare Supplement insurance plan is right for you, even if you have a low income.

The product and service descriptions, if any, provided on these eHealth Insurance Web pages are not intended to constitute offers to sell or solicitations in connection with any product or service. All products are not available in all areas and are subject to applicable laws, rules, and regulations.

This website and its contents are for informational purposes only. Nothing on the website should ever be used as a substitute for professional medical advice. You should always consult with your medical provider regarding diagnosis or treatment for a health condition, including decisions about the correct medication for your condition, as well as prior to undertaking any specific exercise or dietary routine.

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