What is a Medicare Supplement Plan?

If you are enrolled in an Original Medicare plan, you’ll notice that they do not cover all the costs.  Some of the health care costs like deductibles, coinsurance, and copayments are out-of-your-pocket expenses which can turn into a pretty lengthy bill at times. You need a counter for such costs, and this is where a Medicare supplement plan comes in handy. 

A Medicare supplement plan or Medicare supplement insurance is a type of insurance policy in which a private company covers your out-of-pocket health and medical expenses that Medicare does not cover. A Medicare supplement plan is also known as a Medigap and it may include costs such as deductibles, coinsurance, and copayments. 

In this blog, we’ll dive deeper into the benefits and uses of the Medicare Supplement plan. So, keep scrolling!

What is a Medicare Supplement Plan? 

Medicare supplement plan is an insurance policy offered by private companies that covers your out-of-the-pocket healthcare expenses that the Original Medicare does not pay for. The costs that a Medicare Supplement plan covers may include deductibles, coinsurance, and copayments.

Medicare Supplement insurance or Medigap is provided by private companies and regulated by federal and state governments. There are many variations to a Medicare supplement plan. The 10 variations of a Medigap are labeled from A to N each, with different costs and benefits. You need to compare those variations to settle with one that covers your healthcare needs. 

Medicare Supplement Insurance is for those who are 65 years and above and have enrolled in Medicare Part A and Part B of the Original Medicare. Also, people enrolling for a Medicare Supplement plan must live in the state where the plan is offered. 

What is Medicare Supplement Insurance and How Does It Relate to Medigap?

Medigap is just another name of Medicare Supplement Insurance. Medicare Supplement Insurance aka Medigap provides out-of-the-pocket healthcare and medical expenses that an Original Medicare Plan does not provide for. 

What is Medigap? 

An original Medicare referred to as Plan A and B does not cover all the expenses related to any illness. Medigap, the same as Medicare Supplement Insurance, is a health insurance plan provided by private companies to cover costs that are not covered by an Original Medicare plan. 

How does a Medicare Supplement Plan work? 

The Medicare Supplement Insurance only works with an Original Medicare Plan. An Original Medicare Plan covers only a portion of your total healthcare and medical expenses at a time, say 80%. The remaining 20% is usually paid by Medigap. 

Once you and Medicare have paid the required share of medical expenses, Medigap pays the rest of the bill. These expenses paid by Medigap usually include expenses like deductibles, copayments, and coinsurance. 

There are 10 variations of a Medigap plan ranging from A to N. However, some of the older Medigap plans have been discontinued. Medigap Plans and their benefits are standardized in almost all States excluding Massachusetts, Minnesota, and Wisconsin. 

Medigap is obliged to play at least Plan A and Plan C or Plan F to their customers. A Medicaid or Medicare Advantage policyholder is not eligible to apply for a Medicare Supplement Plan. 

What Do Medicare Supplement Plans Cover and What Are the Different Types?

There are 20 different types of Medigap plans, namely from A to N. A Medicare Supplement Plan typically covers the following expenses:

Medicare Part A – Extended hospital costs, coinsurance, and hospice care coinsurance or copayments. 

Medicare Part B – Coinsurance or copayments, deductible, and first 3 pints of blood in case of transfusion.

How Do I Choose the Right Medicare Supplement Plan for Me?

Consider the following aspects before choosing a Medicare Supplement Plan: 

  1. There are 10 different Medigap plans. Start by comparing these plans. Refer to this chart.
  2.  Check what Medigap plans are available in your state and by which Insurance companies. 
  3. Check the quality, reputation, and financial ratings of the insurance companies you’re interested in. 
  4. Get personalized price quotes from the Insurance companies by contacting them. 
  5. Choose the plan that best meets your needs and budget, and enroll during your Medigap Open Enrollment Period (OEP)

What are the Pros and Cons of a Medicare Supplement Plan? 


  1. Covers out-of-pocket medical costs like deductibles, coinsurance, and copayments.
  2. Covers 80% of your emergency healthcare services when you’re traveling outside the US.
  3. Insurance companies pay your out-of-the-pocket bills irrespective of your health conditions, when you turn 65 and enroll in the open enrollment period. 


  1. Does not cover medical expenses such as prescription drug, vision, dental, hearing, etc.
  2. Some Medigap policies might charge you higher as you age. 
  3. Not all Medigap plans guarantee quality nursing facility or hospice care. 

How Do Medicare Supplement Plans Interact with Medicare Advantage Plans?

Medicare Advantage Plans are an alternative to the Original Medicare and are provided by the private companies that are in contract with Medicare. If you have a Medicare Advantage Plan, you cannot apply for a Medicare Supplement plan and vice-versa. 

A Medicare Advantage Plan aka Part C covers all the benefits of Medicare Part A and Part B. Furthermore, It provides additional benefits including prescription drug coverage, vision, dental, and hearing care. 

What Are the Different Ways to Pay for Medicare Supplement Plans?

Some of the common payment options for Medicare Supplement Plans are:

  1. Automatic Bank Drafts: When you authorize them, the insurance company automatically deducts the premium amount from your checking or savings account every month. 
  1. Online Payments: You can create an account in the insurance company’s online portal or app and pay online using a debit card, credit card, or electronic check. 
  1. Mail-in payments: You can mail a check or money order to the insurance company along with a payment coupon or invoice, taking enough time before the due date. 
  1. Phone Payments: You can pay the insurance company over the phone via credit card, debit card, or electronic check. 

What Are the Tax Implications of Medicare Supplement Plans?

Medicare Supplement Plans are tax deductible. However, only under certain conditions such as – If you itemize your deductions and your total medical and dental expenses exceed 7.5% of your adjusted gross income (AGI). 

What Are the Medicare Supplement Plan Requirements and Eligibility Criteria?

You can apply for a Medicare supplement plan in the Initial enrollment period. This period is the start of the month when you turn 65 and enroll for Part B.