Understanding Your Options With Medigap

Medigap policies come in many flavors.  If you’ve done any reading in this area at all, you’ve probably come to realize that the whole thing is a messy alphabet soup… and it’s really, really hard to figure it all out.  If you want more details on the choice between Medigap and Medicare Advantage plans, see the article Medicare Supplements versus Medicare Advantage Plans.

What I’ve done here is to pull together a resource that may be helpful as you consider your options for a Medigap plan.

The ABC’s

Plan A covers:

  • Medicare Part A coinsurance hospital costs up to an additional 365 days after Medicare benefits are used up
  • Medicare Part B coinsurance or copayments
  • Blood (well, the first 3 pints anyhow)
  • Part A Hospice Care coinsurance or copayment
  • Medicare Preventative Care Part B coinsurance

Plan B covers:

  • Everything covered by Plan A, plus:
  • Medicare Part A deductible

Plan C covers:

  • Everything covered by Plan B, plus:
  • Skilled nursing facility care coinsurance
  • Medicare Part B deductible
  • Foreign travel emergency (up to plan limits)

Plan D covers:

  • Everything covered by Plan B, plus:
  • Skilled nursing facility care coinsurance
  • Foreign travel emergency (up to plan limits)

(in other words, everything in Plan C except the Medicare Part B deductible)

Plan E is no longer available as of May 31, 2010

Plan F covers:

  • Everything covered by Plan C, plus:
  • Medicare Part B excess charges
  • Plan F also offers a high-deductible plan as well.  In this plan, you pay for the first $2,000 of covered expenses before your Medigap policy pays anything.

Plan G covers:

  • Everything covered by Plan D plus:
  • Medicare Part B excess charges

(in other words, everything in Plan F except the Medicare Part B deductible)

Plans H, I, and J are no longer available as of May 31, 2010

Now we’re getting to some of the more flexible plan options.  These have been developed to provide similar benefits as other plans but with additional participation by the insured in order to reduce the premium costs.

Plan K covers:

  • Everything covered by Plan D with the following exceptions:
  • Foreign travel emergency is not covered
  • There is a 50% coverage on the following:
    • Medicare Part B coinsurance or copayments
    • Blood (again, just the first 3 pints)
    • Part A Hospice Care coinsurance or copayment
    • Skilled nursing care facility coinsurance
    • Medicare Part A deductible
  • There is a yearly out-of-pocket maximum for all coinsurance and copayments of $4,620.  After this has been met (along with your annual Medicare Part B deductible), the plan pays 100% of each covered service.

Plan L covers:

  • The same coverage as Plan K except a 75% coverage (instead of the 50% coverage)
  • The yearly out-of-pocket maximum for Plan L is $2,310, with the same detail as Plan K otherwise.

Plan M covers:

  • Everything covered by Plan D with the following exception:
  • Medicare Part A deductible is only covered at a 50% rate

Plan N covers:

  • Everything covered by Plan D with the following exception:
  • The Medicare Part B coinsurance or copayment is covered 100% except for up to $20 copayment for office visits and up to $50 for emergency room visits

About the author

Jim Blankenship, CFP®, EA

Jim Blankenship is the founder and principal of Blankenship Financial Planning, Ltd., a financial planning firm providing hourly, as-needed financial planning and advice. A financial services professional for over 25 years, Jim is a CFP professional and has earned the Enrolled Agent designation, a designation that qualifies him as enrolled to practice before the IRS. Jim is also a NAPFA-registered financial advisor, which designates him as a Fee-Only Financial Advisor.

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