Why Might I Want to Enroll in a Medicare Supplement Plan?

Mike Olmos by Mike Olmos | Licensed since 2010
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This article was updated on: 09/16/2018

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Medicare Supplement plans are sold by private insurance companies to work alongside your Original Medicare (Part A and Part B) health-care coverage. (You generally cannot have Medicare Supplement insurance with a Medicare Advantage plan.) Perhaps the best reason to buy a Medicare Supplement plan is to save on out-of-pocket Medicare costs such as copayments, coinsurance and deductibles.

Keep in mind that Original Medicare has no out-of-pocket maximum. A Medicare Supplement plan will usually come with its own monthly premium, but if you receive extensive medical services or frequent hospitalizations, the plan could save you a lot of money. Medicare Supplement plans are labeled A-N (plans E, H, I, and J are no longer sold) and not all plans are available in all areas. Let’s look more at which Medicare out-of-pocket costs that a Medicare Supplement plan might help you with.

Medicare Part A coinsurance and hospital costs

All standardized Medicare Supplement plans (A, B, C, D, F, G, K, L, M, N) may cover Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used up. Under Medicare Part A, for days 1-60 of hospitalization, there is $0 coinsurance for each benefit period. However, as your length of hospitalization increases, the costs typically increase as well. Medicare costs for days 61-90 of hospitalization in 2018 are $335 per day of each benefit period. A Medicare Supplement plan may cover that coinsurance cost. So if you were hospitalized as an inpatient for 65 days, a Medicare Supplement plan could help cover the five days that are $335 each, or $1,675 toward your total hospital bill.

Medicare considers a limited number of the in-patient hospitalization days 91 and beyond to be “lifetime reserve days.” You have up to 60 lifetime reserve days in your lifetime. Each of these lifetime reserve days usually costs you $670 per day in 2018. A Medicare Supplement plan could help pay this coinsurance. If you were hospitalized for 151 days (90 days + 60 lifetime reserve days + 1), Medicare would usually stop paying entirely. For hospitalizations of 151 days and beyond, Medicare Supplement may continue to provide you coverage, up to an additional 365 days.

Medicare Part B coinsurance or copayment

Most standardized Medicare Supplement plans generally pay 100% of your Medicare Part B coinsurance or copayment. Medicare Supplement Plan K may pay 50% and Plan L may pay 75%. Your Part B coinsurance is typically 20% of the Medicare-approved amount for doctor services, outpatient therapy and durable medical equipment. An electric wheelchair could be an example of durable medical equipment. If the Medicare-approved amount for an electric wheelchair were $1,500, you would typically be responsible for 20% of that, or $300. A Medicare Supplement plan may cover that $300 coinsurance.

Blood (first three pints)

Most of the Medicare Supplement plans that are standardized in 47 states may pay 100% for the first three pints of blood you get as part of a Medicare-covered medical procedure. Generally Plan K pays 50% and Plan L pays 75%. If the hospital can get blood from a blood bank at no charge, you usually won’t have to pay for it. However, if the hospital has to buy blood for you, you generally have to pay for the first three pints you get in a calendar year. Your Medicare Supplement plan may cover that cost. You also could have the blood donated by you or someone else, which may avoid a charge.

Medicare Part A hospice care coinsurance or copayment

Most standardized Medicare Supplement plans pay 100% for Medicare Part A covered hospice care coinsurance or copayment, except Plan K which pays 50%, and Plan L which pays 75%. Hospice care is generally $0 under Medicare Part A and Part B. However, you may need to pay 5% of the Medicare-approved amount for inpatient respite care (temporary care in a nursing home of similar facility to the patient’s caregiver can take time off).  A Medicare Supplement plan may cover this cost.

Skilled nursing facility care coinsurance

Medicare Supplement Plans C, D, F, G, M and N may cover skilled nursing facility care coinsurance at 100%. Plan K may cover it at 50% and Plan L at 75%. Under Original Medicare, you typically pay $0 for each benefit period for days 1-20 of your skilled nursing facility stay. For days 21-100, you usually pay $167.50 coinsurance in 2018 for each benefit period. That means for 30 days in a skilled nursing facility, you may have a $1,675 cost (days 1-20 at $0 and days 21-30 at $167.50). Medicare Supplement may help cover that cost.

Medicare Part A deductible

All standardized Medicare Supplement plans except Plan A may cover the Part A deductible at least 50%. Plans B, C, D, F, G, and N may cover it at 100%. Plans K and M may cover it at 50%, and Plan L at 75%. You pay a $1,340 deductible in 2018 for each benefit period. If you had Medicare Supplement Plan K, you might only pay $670 (50%); if you had Medicare Supplement Plan B, you might not have to pay any of the deductible.

Medicare Part B deductible

Your Part B deductible is $183 per year in 2018. Medicare Supplement Plans C and F may cover 100% of this cost. None of the other standardized lettered plans in most states covers the Part B deductible.

Medicare Part B excess charges

Medicare Supplement Plans F and G may cover Medicare Part B excess charges at 100%. An excess charge is the difference between the Medicare-approved amount for a service, and the amount the health-care provider is legally allowed to charge.

Foreign travel (up to plan limits)

Original Medicare might provide foreign emergency health-care coverage in very limited circumstances. Medicare considers Puerto Rico, the U.S. Virgin Islands, Guam, the Northern Mariana Islands and American Samoa as part of the U.S. However, if you are planning a European excursion or an African safari, it might be a good idea to get foreign travel coverage from a Medicare Supplement plan. Medicare Supplement Plans C, D, F, G, M and N, may cover approved emergency medical care during foreign travel (up to plan limits) at 80%. To learn what the plan limits are, speak to the insurance company directly.

Out-of-pocket limit

Two Medicare Supplement plans offer out-of-pocket limits: Plan K and Plan L. After you meet your out-of-pocket yearly limit and yearly Part B deductible, the Medicare Supplement plan will generally pay 100% of your Medicare covered services for the rest of the year. The Plan K out-of-pocket maximum is $5,240 in 2018. The Plan L out-of-pocket maximum is $2,620 in 2018.

If you still have questions about how a Medicare Supplement plan can help you with Medicare’s out-of-pocket costs, I am happy to help you find answers. If you prefer, you can schedule a phone call or request an email by clicking on the buttons below. You can also find out about plan options in your area by clicking the Compare Plans button.

The product and service descriptions, if any, provided on these Medicare.com Web pages are not intended to constitute offers to sell or solicitations in connection with any product or service. All products are not available in all areas and are subject to applicable laws, rules, and regulations.

Medicare Supplement insurance plans are not connected with or endorsed by the U.S. government or the Federal Medicare program.

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