Medicare Supplement Insurance
You've Seen the Gaps. Now Let's Talk About How to Fill Them.
On our Understanding Medicare page, we explained how Original Medicare works.
Medicare Part A and Part B provide extensive healthcare coverage, but they don’t pay 100% of your healthcare costs.
That can leave you responsible for deductibles, coinsurance and other out-of-pocket expenses.
We call that your financial exposure.
A Medicare Supplement plan — also called Medigap — is designed to help reduce or, depending on the expense and plan you choose, eliminate many of those costs.
What Is Medigap?
The name actually does a great job of explaining the concept.
MEDIcare + GAP = MEDIGAP
Original Medicare pays first.
A Medicare Supplement policy then helps pay certain costs that Original Medicare leaves behind.
Instead of replacing Medicare, a Medicare Supplement works alongside Original Medicare.
Think of it this way:
- Original Medicare provides the foundation.
- Medigap helps fill the financial gaps.
Medigap Helps Reduce That Exposure
This is where Medicare Supplement insurance comes in.
Depending on the Medicare Supplement plan you choose, the policy can pay some or nearly all of the Medicare-approved expenses that would otherwise be your responsibility.
The objective is simple:
Reduce the financial gaps left by Original Medicare and make your healthcare expenses more predictable.
For someone who doesn’t want significant unexpected medical expenses, a Medicare Supplement can transfer much of that financial exposure to the insurance company in exchange for a monthly premium.
Medicare Supplement Plans Are Standardized
Medicare Supplement plans are identified by letters, such as Plan G, Plan N and High Deductible Plan G.
This is important:
Benefits for the same lettered Medicare Supplement plan are standardized.
For example, the basic medical benefits of a Plan G are the same regardless of which insurance company provides the policy.
What can vary between insurance companies includes:
- Monthly premium
- Rate history and future rate changes
- Discounts
- Underwriting requirements
- Customer service
- Financial strength
- Availability in your area
That’s one reason having access to multiple insurance carriers can be valuable.
Remember Your Financial Exposure?
With Original Medicare alone, you can potentially be responsible for costs such as:
- The Part A hospital deductible and certain hospital costs
- The Part B deductible
- Part B coinsurance
- Skilled nursing facility coinsurance
- Certain other Medicare-approved expenses
One of the most significant exposures we discussed in Medicare 101 is Part B coinsurance.
After the Part B deductible, Original Medicare generally pays 80% of the Medicare-approved amount for covered Part B services.
You are generally responsible for the remaining 20%.
And Original Medicare does not have an annual maximum out-of-pocket limit.
That’s an important risk to understand.
Different Ways to Manage the Same Risk
Not everyone wants to handle their financial exposure the same way.
That’s why we don’t believe the Medicare Supplement conversation should simply be:
“Which plan is the best?”
A better question is:
“How much financial exposure do you want to keep?”
For example:
Plan G — Greater Predictability
Plan G covers most of the gaps in Original Medicare for Medicare-approved services.
You generally remain responsible for the annual Medicare Part B deductible.
After that deductible is satisfied, Plan G provides very comprehensive coverage of the Medicare-approved costs that Original Medicare leaves behind.
Higher monthly premium. Less financial exposure.
Plan N — Share Some of the Cost
Plan N also provides extensive coverage but leaves you responsible for certain out-of-pocket expenses, including the Part B deductible and certain copayments.
In exchange for accepting some of that exposure, premiums may be lower than Plan G.
Potentially lower premium. You retain some of the risk.
High Deductible Plan G — Keep More Risk, Lower the Premium
High Deductible Plan G takes a different approach.
You agree to pay Medicare-covered out-of-pocket costs up to an annual deductible before the Medicare Supplement begins paying covered benefits.
In exchange, the monthly premium can be significantly lower than traditional Plan G.
Lower monthly premium. Greater initial financial exposure.
This can be attractive to someone who wants protection against larger medical expenses but is comfortable assuming more of the smaller costs themselves.
Medicare Supplement Doesn't Replace Medicare
This is an important distinction.
With a Medicare Supplement, you remain enrolled in Original Medicare.
Medicare remains your primary insurance.
Your Medicare Supplement works with Medicare to help cover eligible expenses Medicare leaves behind.
This also means that, in most cases, you can see any doctor or hospital in the United States that accepts Medicare.
There generally isn’t a Medicare Supplement provider network you have to stay within.
What About Prescription Drugs?
Modern Medicare Supplement plans generally do not include outpatient prescription drug coverage.
If you choose Original Medicare with a Medicare Supplement, you can typically purchase a separate Medicare Part D prescription drug plan.
So your overall coverage may look like:
- Original Medicare Part A + Part B
- + Medicare Supplement
- + Part D Prescription Drug Plan
- Together, these pieces can create comprehensive Medicare coverage.
How HCS Helps You Choose
Our process doesn’t begin with asking which insurance company you want.
It begins with understanding you.
We look at factors such as:
- Your healthcare needs
- Your budget
- Your comfort with out-of-pocket expenses
- Your doctors and healthcare preferences
- Your travel and lifestyle
- Where you live
Then we can compare Medicare Supplement options from multiple insurance carriers available in your area.
The objective isn’t simply to find a Medicare Supplement.
It’s to find the right balance between what you pay each month and how much financial exposure you want to keep.
From Exposure to Protection
If you’ve already gone through our Medicare 101 education, you understand the basic concept:
- Original Medicare provides excellent coverage — but it leaves financial gaps.
- A Medicare Supplement gives you a way to address those gaps.
The question becomes:
- How much of the gap do you want to cover?
- That's where we can help.