How Medicare Supplemental Insurance Plans Work

Medicare Supplemental Insurance Plans (also known as “Medigap”) work in conjunction with Original Medicare (Parts B and A) to cover costs that you might otherwise be responsible for. They’re standardized plans, meaning that each plan with a letter (like Plan G from one insurer is the same as Plan G from another insurer) offers the same basic coverage nationwide.

The Indiana Department of Insurance regulates Medicare supplement plans. Private insurance companies are licensed by the Indiana Department of Insurance to sell Medicare supplement plans. During open enrollment, which begins in the month that you enroll in Medicare part B at 65 or older, any Medicare supplement policy is available to you regardless of your health. After that, you could be rejected, have to pay more or change plans. It’s best to find a plan you like while you can.

Most Medicare supplements charge a monthly fee to maintain your policy. The premium amount is determined by the insurance company. It is usually based upon the age of the customer at the time the policy was purchased. Insurance companies may raise the premium annually, but must first prove that the expected loss ratio of the current year exceeds the previous year.

Medigap Plans cover many of the expenses that you may be required to pay with Original Medicare, such as deductibles, copayments and coinsurance. Generally, the more expensive the plan, the better coverage it will provide.

Plans A to N are available depending on your needs. Plan F, the most comprehensive plan, is only available for people who qualified for Medicare prior to January 1, 2020. Plans A, J and K offer lower premiums. However, they do not include the Part A deductible. Plans K to N cover Medicare-approved costs, including the Part A deductible and 20% coinsurance on doctor visits and outpatient services. Plans L and N also include benefits for hospice and respite care.

Some Medicare supplement policies provide additional benefits such travel insurance, vision coverage and dental coverage. You should carefully review each policy to ensure that it is affordable and meets your needs. Consider your current health and future health. You may need to switch policies in the future if your health changes. You can get the details of each policy from a licensed insurance agent/producer.

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