What is Medicare Supplement Insurance?

by Kanopy Insurance


Most people 65 or older enrolled Medicare Part B have Medicare supplement insurance, also known as Medigap, to pay for health care costs not covered by medicare. Medicare supplement insurance helps to pay for deductibles and copayments. Medicare doesn't cover every medical expense. When you're on a fixed income, finding the money to pay for unplanned deductibles and copayments can be tough. That's why most people who are enrolled in Medicare Part B also have some medicare supplement insurance.

Medicare supplemental insurance can make it easier to budget because you have a set amount you pay each month. That ensures you're prepared for any medical issue and won't be financially devastated by costs for conditions that aren't covered under Medicare Part B as well as deductibles and copays.

Maybe you’ve just turned 65 and want to reduce your health care payments or preparing for the future has always been your thing. Either way, getting medicare supplement insurance isn’t difficult. However, navigating through all the information surrounding Medigap and understanding exactly how it works can be challenging.

That’s why we’re here to help you solve more than “wait-is-this-pre-existing-condition-covered;” you’ll get answers to costs, coverage, and more.

What is Medicare Supplement Insurance?

Medicare supplement insurance, or Medigap, is an insurance policy that helps you pay for medical costs that standard Medicare doesn't cover. There are ten supplement plans available in all but three states (Massachusetts, Minnesota, and Wisconsin have slightly different requirements), labeled A, B, C, D, F, G, K, L, M, and N.


While this alphabet soup can seem confusing at the outset, most of the Medicare supplement insurance coverage options include:

  • Copayments.
  • Coinsurance.
  • Deductibles. The Part A deductible covers costs for inpatient hospital stay while the Part B deductible covers costs for outpatient services.
  • Skilled nursing copayments.
  • Foreign travel (usually a percentage).
  • At-home recovery after an illness or accident.
  • Preventative care.
  • Part B excess. These are charges that exceed what the standard Medicare policy will pay.

Here is a helpful chart to compare each type of medicare supplement plan coverage: 


Plan F tends to be the most comprehensive but is also available with higher deductibles that you must pay out of pocket before the insurance kicks in.

3 Questions to Ask About Medicare Supplement Insurance

Clearly, medicare supplement insurance deserves your time and attention. And like any aspect of insurance, there can be a learning curve to discover the ins and outs and what you need for your lifestyle. Hopefully, these answers to three of the most common and important questions can make the learning curve a little less steep.


1. Do You Have to Have Supplement Insurance with Medicare?

No, there's no legal requirement to supplement your standard Medicare coverage. But for people over age 65 with the financial ability, purchasing a Medigap policy is a smart move. As you age, you're more likely to incur medical expenses, and the types of illnesses you may develop and the care you need can be more costly. Medigap helps protect you against potentially high out-of-pocket expenses.

There are some exceptions. If you have a supplemental health insurance policy for retirees that is through your former employer or a union, that may serve the same purpose as Medigap insurance. Some seniors choose to purchase a Medicare Advantage Plan that replaces both standard Medicare and supplemental insurance. In fact, you can't have both an Advantage Plan and a Medigap policy.

2. How Much Does Medicare Supplemental Insurance Cost?

You're already paying a monthly premium for Medicare Part B, and your Medigap policy will be on top of what you're paying for that. Costs can vary, but a survey by Weiss Ratings gives you an idea of what you'll pay. Annual Medigap costs can range from $936 for Plan K coverage to $1,952 for top-of-the-line Plan F coverage for a 65-year-old man. A middle-of-the-road policy, Plan N, will cost $1,332 a year. This is typically divided into monthly installments to make it easier to pay.

3. When Can I Enroll in Medicare Supplement Insurance?

It can get a bit confusing when it comes to how and when you can sign up for Medigap coverage. Many people sign up when they are first eligible. If you don't, or if you purchase insurance and then stop it, you may have trouble getting a supplemental policy later on -- or it could be prohibitively expensive.

Once you turn 65 and enroll in the standard Medicare program, you have a six-month period to select and sign up for supplemental insurance. In this six-month time frame, insurance companies have to offer you a policy at the best available rates no matter what your health situation is. In other words, you can get coverage at a reasonable price even if you're already ill or have pre-existing conditions -- as long as you don't wait longer than six months to enroll.

The exception is if you're covered by some types of private group health insurance that don't end until after you're 65. When a private plan or any Medicare Advantage or Medigap policy ends, you'll have a 63-day window to buy a new plan. That brief window for purchasing new Medigap insurance also opens if you have had a Medicare Advantage plan and decide within the first year that it's not right for you.

Why You Need Medicare Supplement Insurance

Most seniors don't have the financial resources to be able to rely on standard Medicare coverage should they get sick. If you want to get a procedure done or work with a specialist that's not covered by Medicare Part B, you'll have to pay everything out of pocket. Not all types of care that you might like after an illness or accident are covered by standard Medicare, either.

With Medigap insurance, you can have peace of mind that your outstanding medical bills will be covered. Plus, your deductibles and copays will be covered under some plans. While figuring out which supplemental policy best fits your needs and your wallet can be a bit tricky, it should be a priority to ensure that you'll be taken care of if you need it.

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