What Is Medicare Supplemental Insurance?

by Vicki A. Benge ; Updated July 27, 2017
Medicare supplemental insurance helps with some copayments.

Medicare recipients have the option of obtaining additional insurance to help defray costs not covered by Original Medicare. These supplemental policies should not be confused with Medicare Advantage Plans that offer Medicare benefits through a private insurer. Instead, Medicare supplemental insurance is private insurance that works with the federal government program and must be standardized according to state and federal regulations.

The Basics

A Medicare supplemental insurance policy helps to fill the gaps in Original Medicare coverage. That is why supplemental policies are often called Medigap policies. This is additional insurance, as the name "supplemental" infers. For example, some Medicare supplemental insurance policies will cover policyholders who travel outside the country, coverage Original Medicare does not provide.

How It Works

Medicare supplemental insurance policies will require the insured to pay a monthly premium for the coverage, which is separate from the premium paid for Medicare Part B insurance. Medigap policies typically pay for part or all of the out-of-pocket expenses Medicare recipients are responsible for, such as copayments. Costs for supplemental insurance policies differ by types of protection and provider. For example, monthly premiums can range from $68 to $150 for basic benefits.

Requirements

To obtain Medigap insurance, the policyholder must be eligible for and enrolled in Medicare parts A and B. Medicare beneficiaries must purchase a single policy as supplemental insurance. Family polices that include coverage for a spouse are not available as Medigap insurance. What is covered in a Medicare supplemental policy differs based on what plans the provider chooses to offer. However, expenses resulting from dental care, vision care and eyeglasses typically are not covered, according to the Centers for Medicare and Medicaid Services. Other exclusions may include long-term and private nursing care.

Signing Up

Medicare recipients who wish to purchase a supplemental insurance policy should do so when first eligible during open enrollment, according to Medicare.gov. This one-time period begins the month a Medicare recipient turns 65 and last for six months. For those over age 65, a one-time sign up period for a Medigap policy begins when the recipient enrolls in Medicare Part B coverage. Obtaining supplemental coverage after the end of the enrollment period may not be possible, or the available options may be more expensive.

Additional Help

For Medicare recipients who wish to compare supplemental policies, the agency provides a chart on its website showing what each standardized policy does and does not cover. To get additional help in comparing supplemental insurance policies, the government supports a system called State Health Insurance Assistance Programs, or SHIPs. You can find your state SHIP office from the website. This agency will also refer those who need extra help obtaining appropriate coverage to other state agencies such as Medicaid.

About the Author

Vicki A Benge began writing professionally in 1984 as a newspaper reporter. A small-business owner since 1999, Benge has worked as a licensed insurance agent and has more than 20 years experience in income tax preparation for businesses and individuals. Her business and finance articles can be found on the websites of "The Arizona Republic," "Houston Chronicle," The Motley Fool, "San Francisco Chronicle," and Zacks, among others.

Photo Credits

  • monkeybusinessimages/iStock/Getty Images