insurance

Medicare Supplement

Medicare Supplement insurance, also called Medigap, is private insurance designed to help pay for costs that original Medicare doesn't cover, such as copayments, coinsurance, and deductibles. These standardized plans work alongside Medicare Parts A and B to reduce out-of-pocket expenses.

Example

“After paying large coinsurance bills for several doctor visits, Janet purchased a Medicare Supplement Plan G to cover the 20% that Medicare Part B doesn't pay.”

Memory Tip

Supplement means 'in addition to' - these plans add coverage to fill the gaps that Medicare leaves behind.

Why It Matters

Medicare's coinsurance and deductibles can create significant out-of-pocket costs, especially for people with chronic conditions requiring frequent medical care. Supplement plans provide financial predictability and protection from potentially devastating medical bills.

Common Misconception

Many people believe Medicare Supplement plans include prescription drug coverage, but they don't - you need a separate Medicare Part D plan for medications. Additionally, some think these plans work with Medicare Advantage, but you can only have a supplement plan with original Medicare Parts A and B.

In Practice

Helen has original Medicare and pays $180 monthly for Supplement Plan G. When she has knee replacement surgery with total Medicare-approved costs of $25,000, Medicare Part A covers the hospital stay after she pays the $1,632 deductible. Medicare Part B covers 80% of the surgeon and outpatient physical therapy costs ($4,000 total), leaving her with $800 in coinsurance. Her Supplement Plan G pays the entire $800 coinsurance, so her only out-of-pocket cost is the Part A deductible.

Etymology

The term 'supplement' reflects its purpose to supplement or add to Medicare's existing coverage. It emerged in the 1980s as private insurers began offering policies to fill Medicare's coverage gaps.

Common Misspellings

Medicare SupplimentMedicare SupplementalMedcare SupplementMedicare Suplements

More in insurance

Other insurance terms you should know

deductibleThe amount you pay out-of-pocket before your insurance begin…insurance premiumThe amount paid periodically to an insurance company in exch…deductibleThe amount a policyholder must pay out of pocket before insu…copayA fixed amount paid by an insured person at the time of a me…coinsuranceA cost-sharing arrangement where the insured pays a percenta…out-of-pocket maximumThe most an insured person will pay for covered healthcare s…

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