Medicare Supplement Insurance Plans

although private-sector insurance companies underwrite, price and administer Medicare Supplement—or “Medigap”—policies, they must follow strict guidelines set by the federal government. In fact, the Feds dictate precisely what forms private companies can offer. Working from these templates, each state then approves the Supplement plans for sale within its borders.

There are many types of Medicare Supplement coverage available; these are called Plans A, B, C, D, F, G, K, L, M and N. (These letter denominations are completely separate of and unrelated to Medicare Parts A, B, C, and D. But people often confuse the two sets—and this confusion is understandable.)

Speaking broadly, Plan A offers the least additional coverage and costs the least. Plan B offers a little more additional coverage and costs more, Plan C more, etc., through Plan G. Plans F and G are the most comprehensive Medigap coverages. (Plans K, L, M, and N are specialized coverages with limits or high deductibles that make them less generous, overall, than Plans F and G.)

All Medicare Supplement plans include at least the following coverages:

physician expenses that exceed the Medicare-approved amount but still fall within charged limitations established by Medicare,

the Medicare Part A coinsurance amount for days 61-90 ($289 per day in 2012) and days 91-150 ($578 per day) of a hospital stay,

the first three pints of blood when provided during a covered hospital/facility stay,

coverage of up to 365 more days of a hospital stay during lifetime after all Medicare hospital benefits are exhausted—paid at the applicable prospective payment system (PPS) rate or another appropriate standard of payment,

the coinsurance or co-payment amount for Medicare Part B services after the $140 yearly deductible has been met,

cost-sharing for all Part A Medicare-eligible hospice care and respite care services.

Plans C through G also cover:

the deductible for Part A hospitalization ($1,156 per “benefit period”—usually a year)

the deductible for Part B medical expenses ($140 in a calendar year)

skilled nursing facility care beyond what Parts A and B pay (up to $144.50 per day for days 21-100)

expanded emergency health care while you’re traveling abroad.