Medicare is a nationwide health insurance program for individuals aged 65 and over and certain disabled individuals. The basic Medicare benefit package (termed “original Medicare” in this report) provides broad protection against the costs of many health care services. However, Medicare beneficiaries may still have significant additional costs, including copayments, coinsurance, deductibles, and the full cost of services that are not covered by Medicare. In 2009, about 21% of Medicare beneficiaries purchased the private supplemental insurance known as Medigap to fill some of the cost gaps left by original Medicare.
All Medigap plans cover some percentage of Medicare’s cost-sharing. Some plans offer additions to these basics, including various combinations of greater coverage of Medicare cost sharing, and care associated with foreign travel emergencies. The most popular plans are the most comprehensive, and cover all deductibles, copayments, and coinsurance not covered by Medicare. Medigap generally does not cover medical treatments not covered by Medicare, although it does extend coverage for certain covered services, such as coverage for additional hospital days beyond the Medicare benefit limit. Medigap is financed through beneficiary payments to private insurance firms.
Following the open-enrollment period, beneficiaries have other rights in limited situations, such as when they move to a different state. Guaranteed issue (or the right to buy a plan, to have the plan’s premium not depend on health status, and in some cases to have the plan start coverage of preexisting conditions immediately) is one such right. The right of guaranteed renewability is available in a wide variety of situations, and genetic discrimination is forbidden. Moreover, Medigap insurers must pay out at least 65% (and sometimes 75%) of total premiums as claims to the beneficiaries.
Medigap plans sold to people new to Medicare can no longer cover the Part B deductible. Because of this, Plans C and F are no longer available to people new to Medicare on or after January 1, 2020. However, if you were eligible for Medicare before January 1, 2020, but not yet enrolled, you may be able to buy one of these plans that cover the Part B deductible (Plan C or F). If you already have or were covered by Plan C or F (or the Plan F high deductible version) before January 1, 2020, you can keep your plan.
| Medigap Benefits | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Plan A | Plan B | Plan C | Plan D | Plan F* | Plan G* | Plan K | Plan L | Plan M | Plan N | |
| Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used up | Y | Y | Y | Y | Y | Y | Y | Y | Y | Y |
| Part B coinsurance or copayment | Y | Y | Y | Y | Y | Y | 50% | 75% | Y | *** |
| Blood (first 3 pints) | Y | Y | Y | Y | Y | Y | 50% | 75% | Y | Y |
| Part A hospice care coinsurance or copayment | Y | Y | Y | Y | Y | Y | 50% | 75% | Y | Y |
| Skilled nursing facility care coinsurance | N | N | Y | Y | Y | Y | 50% | 75% | Y | Y |
| Part A deductible | N | Y | Y | Y | Y | Y | 50% | 75% | 50% | Y |
| Part B deductible | N | N | Y | N | Y | N | N | N | N | N |
| Part B excess charge | N | N | N | N | Y | Y | N | N | N | N |
| Foreign travel exchange (up to plan limits) | N | N | 80% | 80% | 80% | 80% | N | N | 80% | 80% |
| Out-of-pocket limit** | N/A | N/A | N/A | N/A | N/A | N/A | $6,620 in 2022 | $3,310 in 2022 | N/A | N/A |
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