Introduction
"Medigap" policies or Medicare "Supplement" plans are private health insurance plans that cover the costs that Original Medicare doesn't cover.
- All plans offer the same basic benefits, though some might have additional benefits that the company tags on.
- Medigap plans are numbered A through N. All plans As, Bs, Cs, and so on are the same regardless of which company you purchase the plan through.
Comparing Medigap plans
You can show your clients the chart from Medicare.gov (below).
- The percentages describe the percent of the benefit that the plan covers. For example, plan G covers 100% of the "Part A deductible" while just 80% of "Foreign travel emergency."
- As you can see, plans differ in terms of how much they cover, with Plan F covering the most, followed by C and G. However, those people who are new to Medicare (as of January 1, 2020) are no longer able to purchase plans C and F because of a regulatory change that disallows plans from covering the Part B deductible. You also might notice missing letters -- that's because those plans are no longer for sale!
- Plan G is now the most popular plan for those new-to-Medicare
Walkthrough Example (with Plan G)
It's helpful to show clients what they would have to pay for under Original Medicare:
- Part A Coinsurance: You pay coinsurance for inpatient hospital care. In 2023, it's $400 per day for days 61 - 90, $800 per day for each day after that, up to 60 days across your life. While the average length of stay is 5-6 days, it can add up fast if you're in the hospital for longer.
- Part B Costs: You pay 20% of the Medicare-approved amount above the deductible.
- Blood (first 3 pints): The first 3 units of blood you receive (unless the hospital gets it at no charge).
- Part A Hospice Care Costs: You pay $5 per prescription for outpatient drugs for pain and symptom management, and 5% of inpatient respite care.
- Part A Skilled Nurse Facility Coinsurance: While you normally pay nothing for the first 20 days, you pay $200 per day for days 21 to 100, and the full cost thereafter.
- Part A Deductible: You pay a deductible of $1,600 when you receive inpatient care.
- Part B Deductible: You pay a deductible of $226 in 2023. Anyone new to Medicare after January 1, 2020 cannot purchase a plan that covers this deductible.
- Part B Excess Charges: In some cases, your doctor may not accept "Medicare assignment", which lets them charge you 15% more than the Medicare approved amount and ask for you to pay upfront, then get reimbursed by Medicare. Your should avoid check with your doctor that they accept Medicare!
- Foreign Travel Emergency: You typically pay 100% of the travel costs, though there are rare circumstances when Medicare may pick up part of the bill.
...compared to plan G:
- You pay the private company a set monthly premium in addition to paying your Part B premium.
- You no longer have to pay any of the costs above, with the exception of the Part B Deductible and 20% of foreign travel costs up to $50k over your lifetime.
You can go to any physician who accepts Medicare. Unlike Medicare Advantage plans, you don't have to worry about costs changing if your doctor is "in-network" or "out-of-network." About 93% of doctors in the U.S. accept Medicare, but you should double check with your doctor in advance.