What is Medicare Supplement? With terms like Original Medicare, Medicare supplement insurance and Medicare Advantage plans all suddenly becoming relevant when you first qualify for Medicare, it can be so confusing to figure out what is available to you and what your best options are. Here we try to cover the basics for what you need when you first enroll in a Medicare plan:

What is covered by Original Medicare only?

Original Medicare refers to Medicare Parts A and B. Under these plans, you will have most services like hospital stays, doctor visits, preventative care, testing, treatment, nursing facilities and equipment covered if medically necessary. The biggest gap in your coverage as someone with Original Medicare only is prescription drug costs—without adding Medicare Part D to your plan you will be responsible for 100% of the costs of prescription drugs.

Can I add Medicare Part D later on?

You can add Medicare Part D—coverage for prescription drugs—later, but you are likely to be hit with a lifetime late enrollment penalty unless you have other drug coverage that is equal to or better than Medicare Part D. This means you will have a higher premium and copays for prescription drugs you pick up at the pharmacy for the rest of your life as long as you have a Part D plan. Since most people will need access to prescription drugs eventually, it is generally cheaper in the long term to enroll in a plan that covers prescription drugs when you first become eligible for Medicare.

What do other Medicare supplement insurance plans cover?

Medicare supplement insurance plans—such as Plan, F, Plan G or Plan N—cover the gaps in cost leftover after Medicare has paid its share of your expenses. For example, it’s standard to be responsible for 20% of health care costs under some parts of Original Medicare, so an emergency room visit billed at $100,000 could leave you responsible for $20,000. In cases like this, it’s good to have a Medicare supplement plan to cover most or all of that remaining 20%. 

Medicare supplement plans are not required, so it is possible to only have Original Medicare or Original Medicare and Medicare Part D, but it is generally more financially responsible in the long run to enroll in a Medicare supplement plan right away. 

Do Medicare Supplement plans include Medicare Part D?

No, Medicare Supplements do not include Medicare Part D. Most who enroll in a Medicare Supplement also enroll in a stand-alone Prescription Drug Plan (PDP) to cover these costs. PDPs are a type of Medicare Part D plan that only includes drug coverage, so they can work with your Medicare supplement insurance plan to cover everything.

What if I get Medicare Advantage instead?

Most Medicare Advantage plans include Part D coverage, known as Medicare Advantage Prescription Drug plan (MAPD), which cover prescription drug costs. You cannot have a Medicare Advantage plan and a Medicare Supplement insurance plan at the same time, because Medicare Advantage is considered an alternative to Original Medicare. Under Medicare Advantage, a private company will offer the same types of services associated with a Medicare plan, and generally prescription drugs are included in Medicare Advantage plans. 

However, they all have different costs and different types of coverage, so it’s important to compare Medicare Advantage plans in your area alongside available Medicare supplement insurance plans to see which one is a better fit for you.

Can I switch plans?

You can switch Medicare Supplement insurance plans any time of year as often as you want, provided you can pass medical underwriting based on your health at the time you apply. However, if it is outside your enrollment period you can be denied in some cases based on your health status. You can also be hit with a late enrollment penalty when you sign up for Medicare Part D outside of your initial enrollment period when you first became eligible.

With Medicare Advantage, you can enroll when you first have Medicare Part A and B during the initial enrollment period and make plan changes during the annual enrollment period of Oct 15 to Dec 7. You may also qualify for a Special Enrollment Period (SEP) under special circumstances, such as moving out of your plan’s service area or losing coverage through no fault of your own.