What is a Medicare Supplement / Medigap Plan?

Also known as a “Med Supp” or a “Medigap Plan,” a Medicare Supplement Plan is an offering from a private insurance company that will help cover the 20% “gap” of costs that Original Medicare does not cover. Specifically, a Medicare Supplement can help cover

  • Medicare Part A and B deductibles;
  • copayments and coinsurance;
  • Hospice coinsurance / copays; and
  • Emergency medical costs during international travel.

Similar to both Original Medicare and Medicare Advantage, a Medicare Supplement isn’t the right choice for everyone, so let’s look at the “pro’s” and “con’s”:

Helps cover co-payments, co-insurance
and deductibles
Although premiums vary between plans, your monthly premium can be
expensive and is not refundable if you don’t have eligible expenses,
e.g., you pay your premium every month, regardless of whether
you go to the doctor
Caps your financial responsibility
at your monthly premium
You will need to purchase a Medicare Part D plan for
prescription drug coverage and pay a monthly premium
Beyond what you pay for your monthly
premium, you out-of-pocket expenses
may be limited
If you require dental, vision or hearing, you will need to purchase
a stand-alone Dental / Vision / Hearing Plan (“DVH Plan”) which
comes with an additional monthly premium

In sum, although a Medicare Supplement / Medigap Plan will help cover the 20% of costs that Medicare does not, and may also cap your financial obligations in the event that you incur significant medical costs, it can come with a rather high monthly price tag in the form of a non-refundable premium, and you would still need to pay extra for a Part D plan AND a DVH Plan.