Medicare supplement insurance (aka, Medigap) is additional insurance you can buy to help cover some of the out-of-pocket costs included with Original Medicare (Part A hospital coverage and Part B medical coverage). These costs include the deductibles, copayments, and coinsurance that must be paid when you use healthcare services.
By design, Original Medicare only covers about 80% of your major medical costs. The other 20%, often called the gap, is the responsibility of each Medicare beneficiary. Fortunately, Medicare allows beneficiaries to buy gap insurance, called Medigap, to help pay the out-of-pocket costs. There are ten different Medigap plans that can help you cover these costs.
This article focuses on Medigap Plan B, which shouldn’t be confused with Medicare Part B. Medicare has Parts (A, B, C, and D), but Medigap insurance has plans.
Medigap Plan B, sometimes called Medicare Plan B, is one of 10 standardized Medicare supplements. Each lettered plan (A, B, C, D, F, G, K, L, M, and N) offers a different level of coverage because they cover different out-of-pocket costs.
The best way to understand the coverage is to first understand the 9 out-of-pocket costs in Original Medicare:
- Medicare Part A Coinsurance & Hospital Costs
- Medicare Part A Skilled Nursing Facility Coinsurance
- Medicare Part A Deductible
- Medicare Part A Hospice Care Coinsurance or Copayment
- Medicare Part B Deductible (annual)
- Medicare Part B Coinsurance or Copayment
- Medicare Part B Excess Charges
- Blood (first 3 pints)
- Foreign Travel Emergency
Medicare Plan B covers most of the costliest gaps in Medicare, including your Part A deductible and coinsurance, hospice coinsurance, Part B coinsurance, and blood. However, it does leave one potentially serious gap, Part A skilled nursing coinsurance. Also, this plan does not cover foreign travel emergencies, but you are covered anywhere you go in the United States and its territories.
The following Medicare Supplement Plans Comparison Chart gives a side-by-side view of Plan B vs. the other nine plans:
Medigap Plan B covers the following:
- Medicare Part A deductible
- Medicare Part A hospital expenses and coinsurance up to 365 additional days after your Medicare benefits are depleted
- Hospice care coinsurance or copayment (Part A)
- Medicare Part B copayments and coinsurance
- The first three pints of blood you receive as a hospital inpatient or outpatient (Original Medicare usually covers any pints you receive after the first three)
Medicare Supplement Plan B does not cover:
- Medicare Part B deductible
- Medicare Part B excess charges
- Skilled Nursing Facility care coinsurance
- Foreign travel emergency care
Medicare Plan B Costs May Vary… Benefits Don’t
State and federal governments regulate Medigap plan coverage and certain rules, but they don’t regulate premiums. Said another way, all Medigap Plan B policies have the same benefits, no matter which company you buy from, but availability and monthly premiums may differ by location and company. This is a huge benefit because it means you can focus your effort on price shopping.
Here’s what you need to know about premiums. All supplement insurance companies set monthly premiums based on one of three rating systems:
- Issue-age-rated
- Attained-age-rated
- Community-rated
Using one of these three formulas, insurers factor in your age, gender, location, use of tobacco products, and health status. Insurers come up with different rates based on many factors, including the size, age, and health of the pool of members.
Fortunately, once you qualify, you’re in! Your coverage can’t be canceled unless you stop paying your premium or you weren’t truthful on the application. In rare circumstances, your policy can be canceled if the insurance company goes bankrupt. In this case, you can choose a new insurer and can’t be turned down.
Medicare Supplement Plan B Enrollment Period
The best time to get Medicare Plan B coverage is during your six-month Medigap Open Enrollment Period (OEP). Your personal OEP begins on the first day of the month that you’re age 65 or over and enrolled in Medicare Part B. During this six-month window, you have a guaranteed issue right to enroll in the Medigap plan of your choice.
Your guaranteed issue right means that you cannot be turned down due to pre-existing health conditions. So long as you live in the plan’s service area and are enrolled in both Medicare Part A and Part B, the insurance carrier must sell you the policy.
If you miss your OEP and later decide to apply, you will be required to go through medical underwriting and the carrier may deny coverage. However, in some situations, you may have a guaranteed issue right to enroll in a Medigap plan outside your Medigap OEP.
Also See: You and Your Medicare Supplement Guaranteed Issue Rights
You can easily find out which Medigap plans are available in your area using our Medigap Comparison Tool. Simply enter your zip code and you’ll be on your way.
Need help deciding which Medicare supplement is right for you? Call 1-855-266-4865 and let a HealthPlanOne agent assist you. There’s no obligation, and they’re contracted with all of the top insurance carriers nationwide.