Medicare Supplement Insurance (Medigap) is extra insurance people can purchase from a Medicare-approved private insurance company if they have Original Medicare (parts A and B).
These plans help cover various costs associated with Original Medicare.
Glossary of Medicare terms
- Out-of-pocket cost: This is the amount a person must pay for care when Medicare does not pay the total amount or offer coverage. Costs can include deductibles, coinsurance, copayments, and premiums.
- Premium: This is the amount of money someone pays each month for Medicare coverage.
- Deductible: This is an annual amount a person must spend out of pocket within a certain period before Medicare starts to fund their treatments.
- Coinsurance: This is the percentage of treatment costs that a person must self-fund. For Medicare Part B, coinsurance is 20%.
- Copayment: This is a fixed dollar amount a person with insurance pays when receiving certain treatments. For Medicare, this usually applies to prescription drugs.
Medigap plans do not usually cover everything.
Medigap does not cover the following:
- vision or dental care
- eyeglasses
- hearing aids
- long-term care, such as a nursing home
- private-duty nursing
After 2005, Medigap plans stopped coverage for prescription drugs. However, people can purchase a stand-alone prescription drug (Part D) plan from a Medicare-approved private insurance company.
Medigap plans help cover “gaps” in the coverage from Original Medicare. They help pay for some of the healthcare costs that Original Medicare does not cover. Medigap plans may also offer additional benefits that Medicare does not offer.
Not all Medigap plans are available everywhere. Individuals can find plans available in their area using the Medicare online search tool.
All Medigap plans help pay for certain out-of-pocket costs associated with Original Medicare, such as:
- deductibles
- copayments
- coinsurance
Other services Medigap may cover include:
- the first 3 pints of the blood benefit (if a healthcare professional has to purchase blood for a transfusion, the individual is responsible for the cost of the first 3 pints)
- the Part B excess charge (anything a healthcare professional charges over the Medicare-approved amount)
- up to 80% of emergency care during foreign travel
- the out-of-pocket limit
Medicare resources
For more resources to help guide you through the complex world of medical insurance, visit our Medicare hub.
