Medigap Plans in Alabama

How Medicare Supplements Work with Parts A and B

Medicare Supplements can seem confusing. But they are much easier to understand when you know what they are made to do.

The first thing to remember is:

Medicare Parts A and B are your main health insurance.

A Medicare Supplement is a private insurance policy that works with Medicare. It helps pay some of the costs that Medicare leaves for you to pay.

Medicare Supplements are also called Medigap plans.

The two plans you will hear about most often today are Plan G and Plan N.

You may also hear about Plan F, especially if you were eligible for Medicare before 2020.

First, Understand Parts A and B

Before we talk about Medicare Supplements, let’s remember what Parts A and B do.

Part A = Hospital

Medicare Part A helps pay for things like:

• Inpatient hospital stays
• Skilled nursing care when Medicare’s rules are met
• Hospice care
• Some home health care

An easy way to remember it is:

Part A = Hospital

Part B = Medical

Medicare Part B helps pay for things like:

• Doctor visits
• Specialists
• Outpatient care
• Lab work
• X-rays and tests
• Medical equipment
• Many other medical services

An easy way to remember it is:

Part B = Doctors and Medical Care

Together, Parts A and B are called Original Medicare.

Medicare Does Not Pay Everything

Original Medicare pays a large part of your medical bills.

But it does not always pay 100%.

Medicare can leave you with costs such as:

• Deductibles
• Coinsurance
• Other costs that Medicare does not pay

This is where a Medicare Supplement can help.

Think of Medicare as the first payer.

Your Medicare Supplement is the second payer.

How Does a Medicare Supplement Work?

Let’s say you go to the doctor for a service covered by Medicare.

The doctor sends the bill to Medicare first.

Medicare looks at the bill and decides if the service is covered.

If it is covered, Medicare pays its part.

Then your Medicare Supplement can pay some or all of the Medicare-approved costs left over, depending on which supplement you have.

Think of it like this:

Doctor → Medicare → Medicare Supplement → You

Medicare pays first.

Your supplement pays second.

Then you pay anything that is still your responsibility.

That is why it is called a Medicare Supplement.

It works with Medicare.

Think of a Supplement Like Car Insurance

A Medicare Supplement is an insurance policy, but it can help to think about it more like car insurance than your main health insurance.

Think about your car.

You own the car.

Your car insurance does not give you the car. It gives you financial protection if certain things happen.

A Medicare Supplement works in a similar way.

Medicare Parts A and B give you your main health coverage.

Then you buy a Medicare Supplement from a private insurance company to help protect you from certain costs Medicare leaves behind.

The supplement does not replace Medicare.

It works behind Medicare.

Your Supplement Does Not Decide Which Doctors You Can See

With a standard Medicare Supplement, you normally do not have a doctor network from the supplement company.

The important question is usually:

“Does this doctor accept Medicare?”

If the doctor accepts Medicare, your standard Medicare Supplement can generally work with your Medicare coverage according to the benefits of your plan.

This means your Plan G insurance company normally does not tell you:

“You must use one of our doctors.”

You are using Medicare’s system.

This can give people a lot of freedom when choosing doctors and hospitals that accept Medicare.

What Is Medicare Supplement Plan G?

Plan G is one of the most popular Medicare Supplements.

Plan G covers many of the costs that Original Medicare leaves behind.

There is one important cost you need to remember:

Plan G Does NOT Pay Your Part B Deductible

You pay the Medicare Part B deductible yourself each year.

After you meet that deductible, Plan G generally pays the Medicare-approved Part A and Part B cost-sharing that Plan G is designed to cover.

An easy way to remember Plan G is:

Plan G = I pay my Part B deductible. Then Plan G covers most of the remaining Medicare-approved gaps.

Plan G also covers Part B excess charges.

What Is Medicare Supplement Plan N?

Plan N is also very popular.

Plan N is similar to Plan G, but you agree to pay a little more of your medical costs yourself.

Just like Plan G:

Plan N does NOT pay your Part B deductible.

You pay that deductible yourself.

Plan N also allows certain copays.

You may pay up to:

$20 for certain office visits

and

$50 for certain emergency room visits if the visit does not result in an inpatient admission.

Plan N also does not pay Medicare Part B excess charges.

Because you agree to pay some of these costs yourself, Plan N may have a lower monthly premium than Plan G.

Plan G and Plan N Made Simple

	Plan G	Plan N
Part A hospital coinsurance	Covered	Covered
Part A deductible	Covered	Covered
Skilled nursing coinsurance	Covered	Covered
Part B deductible	You Pay	You Pay
Part B coinsurance	Covered	Covered, except certain copays
Office visit copay	No	Up to $20 for certain visits
Emergency room copay	No	Up to $50 in certain cases
Part B excess charges	Covered	You Pay
Foreign travel emergency benefit	Yes, with limits	Yes, with limits

A very easy way to think about the difference is:

Plan G

Pay a little more in premium and have fewer bills when you use your Medicare.

Plan N

You may pay less in premium, but you agree to pay a little more when you use your Medicare.

What Is Plan F?

You may know someone who says:

“I have Plan F and it pays everything.”

Plan F was once one of the most popular Medicare Supplements.

Plan F is very similar to Plan G.

But there is one big difference.

Plan F Pays the Part B Deductible

Plan G does not.

That means Plan F covers one Medicare cost that Plan G leaves for you to pay.

But the rules for Plan F changed in 2020.

What Happened to Plan F in 2020?

A federal law changed who can buy Medicare Supplement plans that pay the Part B deductible.

Starting on January 1, 2020, people who were newly eligible for Medicare could no longer buy a Medicare Supplement that pays the Part B deductible.

Since Plan F pays that deductible, it could no longer be sold to people who became newly eligible for Medicare on or after January 1, 2020.

But this does not mean Plan F went away.

If You Were Eligible for Medicare Before January 1, 2020

Plan F may still be available to you.

If you already have Plan F, you can generally keep it.

If you were eligible for Medicare before 2020 but never bought Plan F, you may still be able to buy one. Normal Medicare Supplement enrollment and insurance company rules can still apply.

If You Became Eligible for Medicare January 1, 2020 or Later

You cannot buy Plan F.

For these people, Plan G is usually the closest choice to Plan F.

The easy way to remember it is:

Plan F = Plan G + the Part B deductible

Why Do Supplements Have Letters?

Medicare Supplements are standardized.

That means the letter tells you what benefits the plan provides.

For example:

A Plan G is a Plan G.

If Company A sells Plan G and Company B sells Plan G, the basic Medicare benefits provided by those standard Plan G policies are the same.

Company A cannot decide:

“Our Plan G doesn’t cover the Part A deductible.”

Plan G is required to have the benefits that make it a Plan G.

The same idea applies to Plan N and the other standardized Medicare Supplement plans.

So Why Compare Different Insurance Companies?

If Plan G benefits are standardized, why would you compare companies?

Because the price is not always the same.

Two companies may both sell Plan G.

The Medicare benefits are the same, but one company may charge a different monthly premium.

Companies can also be different in areas such as:

• Customer service
• Discounts
• Financial strength
• How they set their prices
• How their premiums may change over time

So when comparing Medicare Supplements, you are often looking for a good insurance company and a good price for the standardized plan you want.

Who Controls Medicare Supplements?

Medicare Supplements are sold by private insurance companies.

They are regulated by both the federal government and the states.

The federal government helps set important rules for Medicare Supplements.

These federal rules help make sure that a Plan G has the required Plan G benefits, no matter which insurance company sells it.

But Medicare Supplements are also insurance policies sold in each state.

That means the State Department of Insurance plays an important role.

In Alabama, that is the:

Alabama Department of Insurance

The Alabama Department of Insurance helps oversee the insurance companies that sell Medicare Supplement policies in Alabama.

So an easy way to think about it is:

Federal government = Helps set the Medigap rules and standards

State Department of Insurance = Regulates the insurance companies and policies in the state

Private insurance company = Sells you the Medicare Supplement

Medicare = Your main health coverage and pays first

An Easy Example

Let’s say Bob has:

Medicare Part A

Medicare Part B

Medicare Supplement Plan G

Bob needs surgery.

Bob goes to a hospital that accepts Medicare.

The hospital sends the Medicare-covered bills to Medicare first.

Medicare pays its part.

Then Bob’s Plan G helps pay the Medicare-approved costs that Plan G is designed to cover.

Bob is still responsible for his Part B deductible when it applies.

The important thing to remember is:

Medicare is still Bob’s main health insurance.

Plan G did not replace Medicare.

Plan G simply helped pay some of the costs that Medicare left behind.

The Easy Way to Remember F, G, and N

Plan F

The most complete of these three plans.

It pays the Part B deductible.

But you can only get Plan F if you were eligible for Medicare before January 1, 2020, subject to the normal rules for buying a Medicare Supplement.

Plan G

Very broad coverage, but you pay the Part B deductible.

After that deductible, Plan G covers most of the Medicare-approved costs that Original Medicare leaves behind.

Plan N

You agree to pay a little more yourself.

You pay the Part B deductible.

You may have certain doctor and emergency room copays.

You also pay Part B excess charges if they happen.

The Most Important Thing to Remember

A Medicare Supplement is easier to understand when you remember:

Medicare Parts A and B are your main health insurance.

Your Medicare Supplement sits behind Medicare and helps pay some of the bills Medicare leaves behind.

Think of it like this:

Medicare pays first.

Your supplement pays second.

You pay what is left, if anything.

Plan G and Plan N are two of the most common choices today.

And Plan F is mainly an option for people who were already eligible for Medicare before January 1, 2020.

The supplement does not replace Medicare.

It simply helps fill the gaps Medicare leaves behind.

That is why Medicare Supplements are also called:

Medigap.

A Medicare Supplement isn’t the only way to handle those gaps. Some people choose Medicare Advantage instead, which works very differently.