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Medicare Supplement Insurance Plan Out-of-Pocket Expenses

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Summary: Medicare Supplement Insurance plan out-of-pocket expenses may vary by the type of plans you choose and when you applied for it (if you have guaranteed issue rights).

Medicare Supplement (Medigap) insurance plans may help pay for “gaps” in your Original Medicare coverage. This includes cost-sharing expenses such as copayments and deductibles, as well as other out-of-pocket expenses you’re normally responsible for, such as the first three pints of blood. For Medicare beneficiaries who see the doctor frequently or need certain routine medical services, out-of-pocket costs like copayments and coinsurance can add up quickly, and a Medicare Supplement insurance plan may help offset some of these costs.

However, even with a Medicare Supplement insurance plan, you’re not covered for everything, and you’ll still have certain out-of-pocket expenses associated with your Medigap coverage. Your costs will depend on your specific plan type, insurance company, and where you live. Here is an overview of some of the out-of-pocket costs you may have with your Medicare Supplement insurance plan.

Medicare Supplement insurance plans and premiums

Premiums are usually the first cost most beneficiaries think of when considering a Medicare Supplement insurance plan. However, you may not realize that there are a variety of factors that may affect your premium amount, including where you live, the insurance companies in your zip code, and the type of “rating” (or pricing) method that the company uses to set its plan premiums. Some Medicare Supplement insurance companies may base premium costs on your age when you enroll in the plan, while others may charge all enrollees the same premium. The type of rating method used by the company will also affect whether your premiums increase over time, and by how much.

The timing of when you enroll and whether you have “guaranteed-issue rights” can also affect how much you pay for your Medicare Supplement insurance plan premium. In general, your premium cost may be lower if you enroll in a plan during your Medicare Supplement Open Enrollment Period, which is the six-month period that starts automatically once you have Part B and are 65 or older. If you apply for Medicare Supplement coverage during this time, you can’t be turned down for coverage or charged more because of pre-existing conditions*. You might face a waiting period before coverage begins.

If you apply for a Medicare Supplement insurance plan after this period is over, in most cases insurance companies are free to base your premiums on your health status, and you may have to pay more for your coverage (or be turned down entirely). In other words, the premium pricing method that your insurer uses greatly affects your overall out-of-pocket expenses for your Medicare Supplement coverage.

According to eHealth research in 2019, the average Medicare Supplement premium was $152 a month.

Out-of-pocket costs vary by Medicare Supplement insurance plan

Keep in mind that there are 10 standardized plans available in most states, labeled A through N, and each plan type offers a different level of coverage. So, the out-of-pocket expenses associated with your Medicare Supplement insurance plan will be determined in large part by which plan you have and the amount of coverage it offers. This Medicare Supplement plan comparison chart may be a helpful way to break down the differences in coverage across plans.

In many cases, if a benefit is covered, the Medicare Supplement insurance plan covers 100% of the cost. For example, all 10 Medicare Supplement insurance plans cover the Part A coinsurance and hospital costs for an extra year after Original Medicare coverage is used up; this benefit is covered in full. If a Medicare Supplement plan doesn’t cover a certain benefit, you’re responsible for that out-of-pocket cost. You’re also responsible for expenses that Original Medicare doesn’t cover, such as routine dental and vision coverage, acupuncture, and chiropractic services.

Some Medicare Supplement insurance plans only cover a percentage of some benefits. For example, Plans K and L only cover 50% and 75% of the cost for certain benefits (aside from the Part A coinsurance, which is covered 100%). So, if you’re enrolled in Plan K, for example, you’re still responsible for paying 50% of the cost for the Part B coinsurance or copayment; the first three pints of blood; Part A hospice care coinsurance or copayment; skilled nursing facility care coinsurance; and your Part A deductible. It’s important to read the benefit details for your plan carefully so you understand the out-of-pocket expenses you’re still responsible for.

Not every Medicare Supplement insurance plan covers overseas emergency health coverage. However, for the plans that do, you’re covered for 80% of approved costs, up to plan limits. You’re generally responsible for paying the other 20%, plus any amount over the plan limit, for overseas emergency medical services.

Medicare Supplement insurance plan out-of-pocket expenses and cost sharing

Some of the Medicare Supplement insurance plans have cost-sharing requirements you may want to keep in mind.

For example, there is a high-deductible version of Medicare Supplement insurance Plan F available where you must meet the annual deductible (which may vary from year to year) before the plan begins to cover costs. In 2019, the deductible for Plan F is $2,300, and you’ll need to pay for all out-of-pocket expenses until you’ve reached this limit. Beginning January 1, 2020, Medicare Supplement Plan C and Plan F will not be available to new Medicare beneficiaries.  However, if you already have Medicare Supplement Plan C or Plan F,  you can keep it.

If you’re enrolled in Medicare Supplement insurance Plan N, you may be responsible for a copayment in certain situations. While Plan N covers the Part B coinsurance or copayment in most cases, you may owe a copayment of up to $20 for certain office visits. You may also owe a copayment of up to $50 for emergency room visits that don’t result in you being admitted as an inpatient.

Medicare Supplement insurance Plans K and L have out-of-pocket limits that may change from year to year. In 2020, the out-of-pocket limit for Plan K is $5,880 and the limit for Plan L is $2,940. Both plans require you to meet the Part B deductible. Once you’re reached the plan limit, including the Part B deductible, Plans K and L cover 100% of covered out-of-pocket expenses for the rest of the year. Most Medicare Supplement plans do not have an out-of-pocket limit.

Other Medicare Supplement insurance plan out-of-pocket costs

As mentioned, Medicare Supplement insurance plans don’t cover everything. You’re still responsible for some out-of-pocket costs associated with your Original Medicare coverage. This includes your Part A premium, if you pay a premium for this coverage, and your Part B premium. If you’re enrolled in Medicare Part D (prescription drug coverage), you may have a separate premium and/or cost-sharing expenses for your Medicare Prescription Drug Plan as well.

If you have a pre-existing condition*, some Medicare Supplement insurance plans may make you wait up to six months before covering the condition. You may need to pay for out-of-pocket costs related to your pre-existing condition* until that waiting period is over. Keep in mind that just because your Medicare Supplement plan may make you wait up to six months before covering your health condition doesn’t mean you’re not covered under Medicare. Original Medicare will still cover the pre-existing condition*, but you’ll need to pay for cost-sharing until your Medicare Supplement coverage starts.

If you’d like help finding a Medicare Supplement insurance plan that fits your budget and needs, contact eHealth at the number below to speak with a licensed insurance agent.

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.

*Pre-existing conditions are generally health conditions that existed before the start of a policy. They may limit coverage, be excluded from coverage, or even prevent you from being approved for a policy; however, the exact definition and relevant limitations or exclusions of coverage will vary with each plan, so check a specific plan’s official plan documents to understand how that plan handles pre-existing conditions.

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