Key Differences in Medicare Supplements

Medicare Supplements

• Medicare supplement plans--also known as Medigap plans--are available to anyone who currently has Parts A and B coverage. Medigap plans are named according to letter, so the available plans range from A through L. These are standardized plans that are regulated by federal and state laws. However, unlike traditional Medicare coverage these plans are issued by private insurance companies. Any company that issues Medigap polices must offer Plan A along with other basic benefits. Basic benefits include Parts A and B coinsurance coverage, an additional 365 hospital days per lifetime and coverage for three pints of blood a year.
  
  

Deductibles

• Before Medicare coverage begins, individuals must pay a deductible of $1,068 for Part A and $135 for Part B. These are the current rates for 2009. Medicare then covers 80 percent of approved costs once the Part B deductible is paid. The different supplement plans are designed to cover different types of expenses. The more expenses covered, the more expensive the plan. In terms of deductible coverages, Medigap plans B through J cover the Medicare Part A deductible. Medigap plans C, F and J provide coverage for the Medicare Part B deductible.
  
  

Part B Expenses

• Medicare Part B is set up to work with doctors on an "assignment" basis. Doctors who work on assignment have agreed to accept reimbursement from Medicare as payment in full. When a doctor does not work on assignment, patients must pay these expenses up front. There are supplement plans that pick up a certain percentage of these expenses. Medigap plans F, I and J cover 100 percent of these costs, while plan G will pick up 80 percent of the cost.
  
  

Additional Coverages

• Since Medicare Parts A and B only cover hospital and doctor expenses, a number of Medicare supplement plans offer coverage for additional services like prescription drugs, skilled nursing care and preventative care. Medigap plans H and I cover 50 percent on prescription costs up to $1,250 per year, while Plan J covers 50 percent up to $3,000 per year. There is, however, a $250 deductible to pay under all three plans before benefits kick in. Skilled nursing care is available under Medigap plans C through J. This benefit allots $105 per day for nursing facility care after the 21st day up to 100 days. Preventative care coverage is available under Plans E and J and covers $120 towards preventative care per year.
  
  

Considerations

• As Medicare supplement plans are regulated by federal and state laws, certain states may apply different rules as to how these plans are administered. Minnesota, Massachusetts and Wisconsin are three states where special rules are in place. And while Medigap plans do cover deductibles and co-pays, individuals are still responsible for paying Medicare Part B premiums as well as the premiums required by the Medigap insurance company. When shopping for supplement policies, consider that individual insurance companies can vary in terms of pricing and plan availability. Financial stability and reputation can be key determinants when deciding on which company to go with.