Once you have decided that Medicare Supplement Insurance is the right choice for you, it’s time to dive into the alphabet soup of plan options. Every plan option is known by a letter—such as Plan A or Plan G—and each one offers different benefits. Which Medicare Supplement plan you choose will depend on your lifestyle, preferences, the benefits that are most important to you and your budget. Read on to get a better understanding of the individual plans and how the right plan can help meet your needs.
What is Medicare Supplement Insurance?
Medicare Supplement Insurance is designed to help pay for some of the out-of-pocket expenses that Original Medicare doesn’t cover including copayments, coinsurance and deductibles. Original Medicare has no out-of-pocket spending limits, so carrying Medicare Supplement Insurance is important for keeping your healthcare spending managed and more predictable. Which Medicare Supplement plan to choose depends on the cost and features you want included.
How to Choose a Medicare Supplement Plan
There are currently 8 Medicare Supplement Plan options available to new Medicare enrollees: Plans A,B,D,G, K, L,M and N. Plans C and F—which cover the Medicare Part B deductible—are no longer open to applicants who qualified for Medicare before 2020, but are still open to new enrollees who qualified for Medicare before 2020. The plans vary by which benefits they offer, the percentage of a particular benefit that is covered and price. All plans fully cover Part A coinsurance and hospital costs, which helps pay for the 20% of inpatient costs that Medicare doesn’t cover. These plans also cover additional hospital days that may not be covered by Original Medicare, up to 365 days after Medicare benefits are used up. Additionally, none of the plans currently offered to people who are newly qualified to Medicare as of 2020 cover the annual Part B deductible of $198. Beyond that each plan has different benefits and percentages covered.
All Plans
Pros
Offer full coverage for inpatient hospitalizations (Part A) which pays the 20% of inpatient costs that Original Medicare doesn’t cover.
Cons
None of the current plans cover the annual Part B deductible of $198. They also do not offer vision, dental or prescription drug benefits. These would need to be purchased as separate plans.
Plan A
Pros
Part A is a basic, no frills Medicare supplement plan and therefore may have less expensive monthly premiums than more comprehensive plans. Plan A fully covers Part B coinsurance and copayments, which includes outpatient doctor’s visits and care as well as necessary durable medical equipment. It also covers copays on the first 3 pints of blood and hospice coinsurance and copayments.
Cons
Plan A doesn’t offer any coverage for skilled nursing facility coinsurance, the Part A deductible, Part B excess charges or foreign emergency travel coverage. The Part A deductible can be up to $1,408 per benefit period and can be charged more than once annually if a person is repeatedly hospitalized. Part B excess charges are related to seeing providers that do not accept Medicare and can be up to 15% more than Medicare approved amounts.
Plan B
Pros
Plan B is similar to Plan A, in that it fully covers Part B coinsurance and copayments, the first 3 pints of blood and hospice coinsurance and copayments. It also fully covers the Part A deductible. Plan B monthly premiums may be less expensive than other more comprehensive plans.
Cons
Plan B doesn’t offer any coverage for skilled nursing facility coinsurance, Part B excess charges or foreign emergency travel coverage.
Plan D
Pros
Plan D is similar to Plan B, but steps it up by offering full coverage for skilled nursing facility coinsurance benefits as well as covering up to 80% of foreign travel emergency care. Plan D benefits also include fully covering Part B coinsurance and copayments, the first 3 pints of blood, hospice coinsurance and copayments and the Part A deductible.
Cons
Plan D doesn’t cover Part B excess charges, or the charges related to seeing providers that do not accept Medicare. If you regularly visit doctors that do not accept Medicare this might not be the best plan for you.
Plan G
Pros
Plan G is currently the most comprehensive plan offered to new Medicare enrollees and is most similar to Plan F, which is no longer available to new enrollees. This plan covers everything Plan D does and adds Part B excess charges to the mix. To sum it up plan G fully covers Parts A coinsurance and hospital costs, Part B coinsurance and copayments, blood work up to 3 pints, hospice coinsurance and copayments, skilled nursing facility coinsurance and Part A deductible. This plan also covers 80% of foreign travel emergency care.
Cons
Since Plan G is the most comprehensive plan, the premiums may be more expensive than the more basic plans with fewer benefits.
Plan K
Pros
Plan K covers 50% of Part B coinsurance and copayments, blood work up to 3 pints, hospice coinsurance and copayments, skilled nursing facility coinsurance and Part A deductible.
As this plan offers only 50% coverage of many benefits it may be offered at a lower monthly premium then other plans with more full coverage.
Cons
Plan K is a percentage based plan that only covers 50% of most benefits. This means you could be responsible for up to half of the expenses that Original Medicare doesn’t cover and significant out-of-pocket expenses not covered by Original Medicare. Plan K also doesn’t offer any coverage for Part B excess charges or foreign travel emergency coverage.
Plan L
Pros
Plan L has similar benefits to Plan K, but covers an additional costs 25% of costs, for a total of 75% coverage on Part B coinsurance and copayments, the first 3 pints of blood, hospice coinsurance and copayments, skilled nursing insurance copayments and Part A deductible. Though it may cost a bit more each month, with this higher percentage of coverage Plan L offers more protection from out-of-pocket expenses than Plan K.
Cons
Because plan L is a percentage based plan you may still be on the hook for significant out-of-pocket expenses for outpatient, blood transfusions, skilled nursing and hospice care.
Plan L doesn’t offer coverage for Part B excess charges for foreign travel emergency coverage.
Plan M
Pros
Plan M is very similar to the most comprehensive Plan D, but only offers 50% for the Part A deductible, which can be up to $1,408 per benefit period. Plan M fully covers Part B coinsurance and copayments, the first 3 pints of blood, skilled nursing facility coinsurance and hospice coinsurance and copayments. Plan M also offers 80% coverage for foreign travel emergency care.
Cons
Plan M only covers 50% of the Part A deductible—which can be up to $1,408 per benefit period—so you may be responsible for out-of-pocket expenses, especially if you are hospitalized multiple times in a year.
Plan N
Pros
Plan N is very similar to Plan M, but does not offer any coverage for the Part A deductible. This might make the premiums slightly less per month. Plan N fully covers Part B coinsurance and copayments, the first 3 pints of blood, skilled nursing facility coinsurance and hospice coinsurance and copayments. Plan M also offers 80% coverage for foreign travel emergency care.
Cons
Plan N offers no coverage for the Part A deductible, which can be up to $1,408 each benefit period. This could get expensive if you are repeatedly hospitalized because you could be asked to pay multiple Part A deductibles in a single year.