What Medicare Supplement insurance is
A Medicare Supplement policy is sold by a private insurance company and is designed to sit alongside Original Medicare. It does not replace your Part A and Part B benefits; it helps cover the share of approved costs that Original Medicare does not pay.
You pay a monthly premium for the policy in addition to your Part B premium. In exchange, the amount you owe at the point of care is typically smaller and more predictable.
How it works with Original Medicare
When you receive care, Medicare processes the claim first and pays its share. The Medigap policy then pays its portion of the remaining approved amount according to the benefits of the plan letter you purchased.
Because Medicare handles the claim first, you generally do not need plan approval to see a particular provider, as long as that provider accepts Medicare.
Costs Original Medicare may leave behind
- The Part A hospital deductible for each benefit period
- Coinsurance for extended hospital or skilled nursing facility stays
- The annual Part B deductible, depending on the plan letter
- Part B coinsurance, which is typically a percentage of the approved amount
- Excess charges from providers who do not accept assignment, in some states
Original Medicare on its own has no annual limit on what you may pay out of pocket. That is the gap Medigap coverage is designed to address.
Standardized plan letters
In most states, Medigap policies are standardized and identified by letter. The benefits within a given letter are the same no matter which insurance company sells it, which makes comparison relatively direct.
What differs between companies is price, rate-increase history, customer service, household discounts, and how each company underwrites applications. Massachusetts, Minnesota, and Wisconsin standardize their policies differently.
Provider flexibility
Medigap policies do not use networks. You can generally see any provider in the country who accepts Medicare, which is one of the main reasons people who travel or split time between states consider this route.
Prescription drug coverage is separate
Medigap policies sold today do not include prescription drug coverage. If you want drug coverage, you generally add a standalone Part D plan, and delaying that coverage without other creditable coverage can result in a late enrollment penalty.
Medigap Open Enrollment Period
The Medigap Open Enrollment Period generally begins the first month you are 65 or older and enrolled in Part B, and it lasts six months. During this window, companies generally cannot deny you a policy or charge you more because of your health history.
This window happens once. Outside of it, and outside certain guaranteed issue situations, your options depend on the rules in your state.
Medical underwriting considerations
Outside of a guaranteed issue situation, an insurance company may ask health questions and may decline an application or charge a higher premium. Some states have added protections that make switching easier; others have not.
This is the practical reason people are advised to think carefully before dropping a Medigap policy — getting it back later is not always possible.
Who may consider a Medicare Supplement plan
- People who want predictable costs at the point of care and are comfortable with a higher monthly premium
- People who want to use providers nationwide without network restrictions
- People who travel frequently or live in more than one state during the year
- People currently in their Medigap Open Enrollment Period
- People who see specialists often and want to avoid referral requirements
Medicare Supplement compared with Medicare Advantage
| Consideration | Medicare Supplement | Medicare Advantage |
|---|---|---|
| Who administers benefits | Original Medicare, with the policy paying its share | A private plan under contract with Medicare |
| Monthly premium | Typically higher | Often lower, sometimes zero, plus your Part B premium |
| Provider access | Generally any provider that accepts Medicare | Typically a network, with rules by plan type |
| Prescription coverage | Not included; add a Part D plan | Often included in the plan |
| Additional benefits | Generally not included | May be offered, varying by plan |
| Cost at point of care | Usually lower and more predictable | Copays and coinsurance as you use services |
Important disclosures
- Not every Medigap plan letter covers every out-of-pocket cost, and benefits differ by letter.
- Availability, pricing, rating methods, and underwriting rules vary by state and by insurance company.
- Medigap policies sold today do not include prescription drug coverage.
- Insurance Allies is a private, non-government entity. It is not connected with or endorsed by the United States government, the federal Medicare program, or the Centers for Medicare & Medicaid Services (CMS).
- We do not offer every plan available in your area. Any information we provide is limited to the plans Everlive Advisors LLC represents in your area.
- To learn about all of the options available to you, contact Medicare.gov, call 1-800-MEDICARE (TTY 1-877-486-2048), 24 hours a day, 7 days a week, or contact your local State Health Insurance Assistance Program (SHIP).
Frequently asked questions
- Can I have a Medigap policy and a Medicare Advantage plan at the same time?
- Generally no. Medigap is designed to work with Original Medicare, and it does not coordinate with a Medicare Advantage plan.
- Are Medigap premiums the same everywhere?
- No. Even for the same standardized plan letter, premiums differ by company, state, age, and rating method.
- Can I switch Medigap plans later?
- Sometimes. Outside your open enrollment window or a guaranteed issue situation, a company may use medical underwriting, and approval is not guaranteed. State rules vary.
- Do I still need Part D with a Medigap policy?
- If you want prescription drug coverage, yes. Medigap policies sold today do not include it, and going without creditable drug coverage can lead to a late enrollment penalty.
Talk through your Medicare options
Answer a few questions and a licensed insurance agent can help you review the Medicare options available where you live. There is no obligation to enroll.
By calling or submitting a form, you may be connected with a licensed insurance agent.
