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”:
| PRO | CON |
| 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.
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