A Medicare supplement plan is used to provide coverage for gaps in benefits under Medicare Parts A and B. Also referred to as Medigap plans, a supplement plan is provided by a private health insurance company; however, all supplemental plans must adhere to Medicare regulations that specify 12 different standardized Medigap plans that private insurers can offer. Although all insurers must provide the same coverage under each type of plan, the cost of the plans can differ.
Medicare Supplement Plan Function
Medicare Part A covers expenses for hospital care and Part B covers expenses for outpatient medical services. The amount of coverage is limited in a number of ways. For example, Medicare Part B covers emergency transportation and may pay for non-emergency ambulance transportation if your doctor says it's medically necessary; however, you will pay 20 percent of the amount approved by Medicare. Medicare supplemental insurance plans are designed to cover such expenses as the 20 percent payment required by Medicare.
Types of Supplement Plans
There are 12 types of standardized Medicare supplement plans set forth in the Medicare regulations. Each type of plan is designated with a letter: A to D, F, G and K to N. Plans E, H, I and J were no longer offered after May 31, 2010; however, you can keep these plans if you purchased one prior to June 2010. A Medicare supplement insurance company can only sell the standardized plans, and it must offer to sell Plan A coverage if it chooses to sell any other standardized plan. The benefits under each plan differ, and the costs for any standardized plan can differ from state-to-state and from one insurer to another.
Benefits
The 12 standardized Medicare supplement plans provide different benefits to cover the various gaps in Medicare. For example, Plan A provides an additional 365 days of coverage for hospital costs after your Medicare hospital costs have been exhausted, but it does not cover the copayment required for skilled nursing facility case benefits. Conversely, Plan C provides coverage for the latter, but does not provide any benefits for additional hospital costs.
State Variations
Although the 12 standardized Medicare supplement plans offer the same benefits in most states, Massachusetts, Minnesota and Wisconsin have additional state regulations that require insurers to offer additional coverage beyond the basics required by Medicare. If you reside in these states, the best source of information for your supplement plan options will be your state's department of insurance.
Considerations
Because all insurance companies offering Medicare supplemental plans must offer the same benefits according to the standardized Medigap Plans A through N, you can compare plans offered by different insurance companies much easier. This will allow you to determine more readily which insurer is offering you the best price for the same coverage.
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