Medicare Supplement (Medigap)

The Centers for Medicare & Medicaid Services (CMS) defines Medigap (Medicare Supplement Insurance) plans as private health insurance policies designed to help cover some of the out-of-pocket costs that Original Medicare does not cover, such as:

  • Deductibles
  • Coinsurance
  • Copayments

Medigap plans are sold by private insurance companies and can help beneficiaries with costs like the 20% coinsurance for Part B services or the Part A hospital deductible. Medigap plans are intended to complement Original Medicare (Part A and Part B), not to replace it.

Here are the key points CMS highlights about Medigap plans:

  1. Standardized Plans: CMS explains that Medigap policies are standardized into different plans, each labeled with a letter (A, B, C, D, F, G, K, L, M, and N). Each lettered plan provides a different set of benefits, though the benefits within each plan are the same no matter which insurance company offers it. For example, Medigap Plan G will have the same benefits regardless of the insurer.
  2. Exclusivity to Original Medicare: Medigap plans are only available to people who are enrolled in Original Medicare (Part A and Part B). These plans do not work with Medicare Advantage (Part C), and you cannot have both a Medigap plan and a Medicare Advantage plan at the same time.
  3. No Prescription Drug Coverage: Medigap plans do not include prescription drug coverage. For prescription drug coverage, beneficiaries must enroll in a Medicare Part D plan separately.
  4. Availability and Costs: Medigap plans are sold by private companies, and their premiums can vary by company, location, and other factors. The coverage and benefits are standardized, but prices are not, so CMS recommends comparing plans.