What Are Medicare Supplements?

A Medicare Supplement Insurance (Medigap) policy, sold by private companies, can help pay some of the health care costs that Original Medicare doesn’t cover, like copayments, coinsurance, and deductibles.

Some Medigap policies also offer coverage for services that Original Medicare doesn’t cover, like medical care when you travel outside the U.S. If you have Original Medicare and you buy a Medigap policy, Medicare will pay its share of the Medicare-approved amount for covered health care costs. Then your Medigap policy pays its share.

A Medigap policy is different from a Medicare Advantage Plan. Those plans are ways to get Medicare benefits, while a Medigap policy primarily supplements your Original Medicare benefits.

8 things to know about Medigap policies

1. You must have Medicare Part A and Part B.

2. If you have a Medicare Advantage Plan, you can apply for a Medigap policy, but make sure you can leave the Medicare Advantage Plan before your Medigap policy begins.

3. You pay the private insurance company a monthly premium for your Medigap policy in addition to the monthly Part B premium that you pay to Medicare.

4. A Medigap policy only covers one person. If you and your spouse both want Medigap coverage, you’ll each have to buy separate policies.

5. You can buy a Medigap policy from any insurance company that’s licensed in your state to sell one.

6. Any standardized Medigap policy is guaranteed renewable even if you have health problems. This means the insurance company can’t cancel your Medigap policy as long as you pay the premium.

7. Some Medigap policies sold in the past cover prescription drugs, but Medigap policies sold after January 1, 2006 aren’t allowed to include prescription drug coverage. If you want prescription drug coverage, you can join a standalone Medicare Prescription Drug Plan (Part D).

8. It’s illegal for anyone to sell you a Medigap policy if you have a Medicare Medical Savings Account (MSA) Plan.

Medicare Advantage Plans, sometimes called “Part C” , “MAPD” or “MA Plans,” are offered by private companies approved by Medicare. If you join a Medicare Advantage Plan, you still have Medicare, however you’ll be getting your Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance) coverage from the Medicare Advantage Plan [HMO of PPO] and not Original Medicare.

Covered services in Medicare Advantage Plans

Medicare Advantage Plans cover all Medicare services. Medicare Advantage Plans may also offer extra coverage such as dental and vision and acupuncture.

Rules for Medicare Advantage Plans

Medicare pays a fixed amount for your care each month to the companies offering Medicare Advantage Plans. These companies must follow rules set by Medicare. However, each Medicare Advantage Plan can charge different out-of-pocket costs and have different rules for how you get services (like whether you need a referral to see a specialist or if you have to go to only doctors, facilities, or suppliers that belong to the plan for non-emergency or non-urgent care). These rules can change each year.

Costs for Medicare Advantage Plans

What you pay in a Medicare Advantage Plan depends on several factors and can be found in the Summary of Benefits. Be sure to read the details carefully.

Drug coverage in Medicare Advantage Plans

You usually get prescription drug coverage (Part D) through the plan. In some types of plans that don’t offer drug coverage, you can join a Medicare Prescription Drug Plan.

You can’t have prescription drug coverage through both a Medicare Advantage Plan and a Medicare Prescription Drug Plan. If you’re in a Medicare Advantage Plan that includes drug coverage and you join a standalone [PDP] Medicare Prescription Drug Plan, you’ll be disenrolled from your Medicare Advantage Plan and returned to Original Medicare.

How Medicare Supplement Insurance (Medigap) policies work with Medicare Advantage Plans

Medigap policies can’t work with Medicare Advantage Plans and you cannot be enrolled in a MAPD plan at the same time as you enrolled in a Medigap plan.

How Medicare Part D Works

Understanding the basics Before deciding whether to sign up for Medicare prescription drug coverage, you need to understand how the program works together as a whole. Grasping the big picture makes it easier to deal with the details.

Who can get Medicare drug coverage?

Anyone on Medicare (with either Part A or Part B) is entitled to drug coverage (known as Part D) regardless of income. No physical exams are required. You cannot be denied for health reasons or because you already use a lot of prescription drugs.

Do I have to sign up?

For most people, joining Part D is voluntary. However, if you now get your drugs from Medicaid, you must get them from a Medicare drug plan as soon as you become eligible for Medicare.

You won’t need to sign up if you have other drug coverage that is better than Medicare’s — for example, benefits from a current or former employer or union.

But if you don’t have other drug coverage that’s considered as good as Medicare, and you delay signing up, you’ll incur a late penalty that adds to your premiums for as long as you’re in the program, except in certain circumstances, and you’ll be able to enroll only during open enrollment at the end of the year.

What if I don’t take any prescription drugs right now?

The same sign-up rules apply. Part D is insurance — you buy it so that it will protect you if and when you need it. If you don’t need any prescription drugs at the present time, enrolling in the Part D plan with the lowest premium in your area ensures that you have coverage if you suddenly need it, but at the least cost.

How do I get Medicare prescription drug coverage?

You must enroll in one of the private insurance plans that Medicare has approved to provide it. Wherever you live, you can get drug coverage in one of two ways:

• Through a “stand-alone” plan (PDP) that offers only drug coverage. This type is mainly intended for people who choose to receive their other health benefits from the traditional Medicare fee-forservice program.
• Through a Medicare Advantage plan (MA-PD) that covers both medical services and prescription drugs. This type is for people who choose to receive all their health care services in one package.

What will my premium be?

There is no single monthly premium for Part D prescription drug coverage. Each drug plan sets its own premium for each calendar year. Some Medicare Advantage plans do not charge an extra premium for drug coverage.