Medicare Supplemental
Medicare A & B covers about 80% of all doctor and hospital bills after age 65. The remaining 20% can be avoided by purchasing a Medicare Advantage or Medigap plan.
Medicare Advantage (part C)
Over the past few years, alternatives to traditional Medicare have become available called Medicare Advantage Plans. The main reason people choose Medicare Advantage Plans is to save money. When you join a Medicare Advantage Plan, you disenroll from traditional Medicare and are provided with a list of doctors. The plans are not medically underwritten and many include a prescription drug benefit. For a copay, Medicare Advantage Plans cover some or all of the the gaps in Medicare Part A and Part B.
To join a Medicare Advantage Plan, you must be enrolled in both Medicare Part A and Part B, and pay a monthly premium typically between $0 and $300 depending on where you live.
Medigap
A Medigap insurance policy covers the gaps in Medicare Parts A and B and you must have Medicare Parts A and B to purchase a policy. There are 10 standardized Medigap plans, A through J, that follow both federal and state laws in the state in which they are sold. Medigap Plan A offers the fewest benefits for the lowest cost, and Medigap Plan J offers the most benefits for the highest cost. There is no difference in benefits between the same-letter policies sold by different insurance companies in the same state. In general, you should select the best policy you can afford, since you are guaranteed issuance of Medigap without underwriting only once in your life during open enrollment. The plans do not offer a prescription drug benefit.
Insurance companies may offer discounts to females, nonsmokers, and married persons. The cost is typically from $100 to $300 per month and cannot be canceled or increased based on claims history.
Medicare Prescription Drug (Part D)
Anyone choosing a medigap policy should also enroll in a Prescription Drug plan, especially because the cost is permanently increased for each month you delay. The premium for Part D plans is typically between $20 and $50 per month. You must have Medicare Parts A and B to enroll.