More Medicare beneficiaries are opting for Medicare Supplement (Medigap) insurance, with the portion of seniors with this additional coverage growing to 41% in 2021 from 38% in 2020, according to a new report.
The report by AHIP also found that Medicare Supplement enrollees were three times less likely to have trouble paying their medical bills than those on Original fee-for-service Medicare. Only 3% of enrollees with Medicare Supplement coverage reported having difficulty paying medical bills in the last 12 months, compared to 8% of original Medicare enrollees without such coverage.
Medigap plans provide additional coverage for Medicare beneficiaries and can help cover out-of-pocket costs that Medicare does not cover. So, if Original Medicare covers a procedure, then the supplement plan will pay the portion that you are responsible for, up to the plan limits.
Medigap plans are standardized and there is no variation between benefits and provider choices among plans of different insurers. Plans are identified by letters. The only difference between plans of the same letter are the premiums the insurers charge.
These plans are popular because they are portable and can be used anywhere in the U.S. where an enrollee finds a provider who accepts Medicare.
There are no network restrictions and there are no referrals required to see specialist doctors. Medicare Supplement plans in general offer more freedom and flexibility compared to Medicare Advantage plans, which include networks of providers.
Fastest-growing plans
According to the AHIP report, the Medigap plans with the fastest enrollment growth between 2020 and 2021 were:
Plan G, up 21% — Plan G accounted for 32% of overall Medicare Supplement enrollment in 2021. These plans typically cover:
- Medicare Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used, at 100%.
Medicare Part B coinsurance or copayment.
First three pints of blood at 100%.
Part A hospice care coinsurance or copayment at 100%.
Skilled nursing facility care coinsurance at 100%.
Part A deductible at 100%.
Foreign travel emergencies (up to plan limits) at 80%.
Part B excess charges at 100%*.
* Excess charges are the difference in cost between what a non-participating doctor or health care provider charges for a medical service and the Medicare-approved amount. If you see a non-participating provider, they are allowed to charge up to 15% above what Medicare has approved for a covered service. Without Part G, you’d be responsible for paying this excess amount out of pocket.
Plan G also has a high-deductible option, the deductible for which is $2,700 in 2023.
Plan D, up 20% — This plan is similar to Plan G, but it doesn’t cover excess charges for Part B services.
Plan N, up 2% — This plan covers everything that Plan G does, except the excess charges for Part B services. Plan N is largely the same as Plan D, except for these instances: Plan N pays 100% of the Part B coinsurance, except for a copayment of up to $20 for some office visits, and up to a $50 copayment for emergency room visits that don’t result in inpatient admission.
Plan M, up 20% — This plan, which has very little enrollment (less than 5,000), is similar to plan G, except:
- It doesn’t cover excess charges for Part B services, and
- It pays only 50% of the Part A deductible.
The takeaway
If you are newly eligible for Medicare, you can choose from a number of plan options, including just going with Original Medicare, a Medicare Advantage plan or a Medicare Supplement plan during your initial enrollment period. If you opt for the latter when first eligible, you won’t be subject to underwriting and the insurer cannot decline your application.
If you are already on Medicare and are not enrolled in a supplement plan, you can enroll in a Medigap plan at any time of the year by passing underwriting. However, the insurer can deny your application for any reason.
If you have questions about Medicare and the various plans that are available, give us a call.
