Understanding Medicare Supplement Insurance Plan Costs

Deciding whether Medicare Supplement Insurance (Medigap) is worth the cost is a personal decision that depends on several factors, including whether you’re looking for lower monthly premium totals or lower out-of-pocket costs for your health care.

To learn more, you can speak with a licensed insurance agent from MedicareSupplement.com who can help you evaluate your insurance needs.

Let’s take a moment to understand the types of costs it can help cover (and the costs it won’t).

Man doing finances

Medigap can help cover some Original Medicare out-of-pocket costs

Medicare Supplement Insurance plans are sold by private insurance companies and can help cover some of Original Medicare’s out-of-pocket costs, such as deductibles, copayments and coinsurance.

Medicare Part A and Part B deductibles

Each part of Medicare has a deductible you must meet before Medicare begins paying its share for covered services.

In 2019, the Medicare Part A deductible is $1,364 per benefit period, and the Medicare Part B deductible is $185 per year.

Medicare Part A benefit periods are based on how long you’ve been discharged from the hospital. A benefit period resets once you’ve been out of the hospital for 60 days.

If you return to the hospital for inpatient care after 60 days has passed since your last inpatient care, you will pay the Part A deductible again, because your benefit period will reset.

If you enroll in a Medigap plan that covers the Medicare Part A and/or Part B deductible, you may find that the plan’s monthly premiums are worth the cost if those premiums total less than your expected costs reaching the Medicare deductibles.

Medicare Part A and Part B coinsurance

Once you meet your Part A deductible, you will pay a coinsurance for covered hospital services.

  • For your first 60 days that you are in the hospital, you pay a $0 coinsurance for your hospital costs after meeting your $1,364 deductible.

  • For days 61-90 in a hospital during a single benefit period, you pay a $341 coinsurance in 2019 for each day you are hospitalized.

  • If you are in the hospital for more than 90 days during a single benefit period, you pay a $682 coinsurance in 2019 for each day you are hospitalized for up to 60 lifetime reserve days.

Once you meet your Part B deductible, your Part B coinsurance is generally 20 percent of the Medicare approved amount for covered services.

Medicare Supplement Insurance Plans 2019
Medicare Supplement Benefits A B C D F1 G K2 L3 M N4
Part A co-insurance and hospital costs
Part B co-insurance or co-payment 50% 75%
First 3 pints of blood 50% 75%
Part A hospice care co-insurance or co-payment 50% 75%
Co-insurance for skilled nursing facility     50% 75%
Medicare Part A deductible   50% 75% 50%
MedicarePart B deductible              
Medicare Part B excess charges              
Foreign travel emergency     80% 80% 80% 80%     80% 80%
1. Plan F offers a high-deductible plan. This plan requires you to pay a $2,300 deductible in 2019 before it covers anything.
2. Plan K has an out-of-pocket yearly limit of $5,560 in 2019. After you pay the out-of-pocket yearly limit and yearly Part B deductible, it pays 100% of covered services for the rest of the calendar year.
3. Plan L has an out-of-pocket yearly limit of $2,780 in 2019. After you pay the out-of-pocket yearly limit and yearly Part B deductible, it pays 100% of covered services for the rest of the calendar year.
4. 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 an inpatient admission.

Medicare Supplement Insurance plan costs

Medicare Supplement Insurance plans help cover some of the out-of-pocket costs listed above, but coverage levels will vary depending on the specific Medigap plan you enroll in.

Possible Costs

In 2018, the national average premium for Medigap Plan F (the most popular Medigap plan) was around $143 per month.1

Your Medicare Supplement Insurance premium is paid in addition to:

  • Your Medicare Part A premium (if you have one — most people do not)
  • Your Medicare Part B premium ($135.50 per month in 2019)
  • Any Medicare out-of-pocket costs that are not covered by your Medigap plan

Although Medicare Supplement Insurance plans help cover some out-of-pocket costs, they still don’t cover some health care costs such as prescription drugs, dental care and vision care.

If you enroll in Medicare Supplement Insurance and want coverage for prescription drugs, you can enroll in a Medicare prescription drug plan (Medicare Part D) to help cover the cost of some prescription drugs.

The average Part D monthly premium in 2018 was $52.23,2 which you pay in addition to your Medicare Part B premium, your Medicare Part A premium (if you have one) and your Medicare Supplement Insurance plan premium.

Neither Original Medicare nor Medicare Supplement Insurance cover dental or vision care. Generally, most routine vision and dental costs must be paid 100 percent out of pocket if you have Original Medicare and Medigap.

Medicare Advantage vs. Medicare Supplement Insurance

Medicare Advantage plans provide at least the same hospital and medical benefits as Medicare Part A and Part B combined into one plan sold by a private insurance company.

Many Medicare Advantage plans may include prescription drug coverage, as well as coverage for dental, vision and hearing coverage.

If you enroll in a Medicare Advantage plan, you still pay your Medicare Part B monthly premium. Some Medicare Advantage plans have a monthly premium that you pay in addition to your Part B premium, and some plans feature a $0 monthly premium.

Medicare Advantage premium amounts and out-of-pocket costs will vary depending on the specific plan you enroll in.

When deciding whether Medicare Supplement Insurance is worth the cost for you, add up how much you could potentially pay for your:

  • Medicare Part A premium (most people do not pay a premium for Medicare Part A)
  • Medicare Part B premium
  • Medigap premium
  • Medicare Part D premium and out-of-pocket costs (if you enroll in a Part D plan)
  • Dental, hearing and vision care

You can get a Medicare Advantage plan quote and compare it to your potential Medicare and Medicare Supplement Insurance costs.

Keep in mind that Medicare Supplement Insurance helps cover some of Medicare’s out-of-pocket costs, and Medicare Advantage plans typically do not cover Medicare deductibles, copayments or coinsurance.

 

Learn more

Medicare Advantage Plans vs. Medicare Supplement Insurance

Medicare Supplement Insurance Plan N

Medicare Supplement Insurance Plan F vs. Plan G

 

1 Hoffower, Hillary. Medicare isn’t enough for retirees. (Jun 17, 2018). Business Insider. Retrieved from www.businessinsider.com/how-much-medigap-plans-cost-every-state-ranked-2018-6.

2 MedicareAdvantage.com’s internal analysis of CMS 2018 Prescription Drug Plan (PDP) Landscape Source Files. May 2018.

Copyright 2018 TZ Insurance Solutions LLC. All rights reserved.

MedicareAdvantage.com is a website owned and operated by TZ Insurance Solutions LLC. TZ Insurance Solutions LLC and TruBridge, Inc. represent Medicare Advantage Organizations and Prescription Drug Plans having Medicare contracts; enrollment in any plan depends upon contract renewal.

Plan availability varies by region and state. For a complete list of available plans, please contact 1-800-MEDICARE (TTY users should call 1-877-486-2048), 24 hours a day/7 days a week or consult www.medicare.gov.

Medicare has neither reviewed nor endorsed this information.