Medicare Supplements: Why Medicare Alone Isn’t Enough

American Senior Benefits
American Senior Benefits
Published on August 25, 2021

Medicare – the government-run health insurance program for Americans age 65 and over – is central to senior insurance and retirement planning. While Medicare itself is vital to ensuring seniors have access to medical care, having Medicare alone leaves seniors vulnerable to high healthcare costs.

What is Medicare?

Medicare coverage alone (sometimes referred to as “straight Medicare” or “Original Medicare”) covers 80% of a senior’s medical costs. All eligible seniors are automatically enrolled in Medicare Part A, which covers hospitalizations and has no premium for most people. Seniors have the option to elect Medicare Part B coverage for doctor visits, and the standard premium for Medicare Part B coverage in 2021 is $148.50. While Part B enrollment is optional, seniors should be advised that there are penalties for electing for coverage after their original seven-month enrollment period. However, seniors who are still working or covered under a spouse’s employee plan can elect Medicare B with no penalty once their current coverage ends.

How Do Medicare Supplement Plans Work?

Medicare Supplement Plans (sometimes called Medigap Plans) work with Medicare A and B and are designed to help pay for 20% of hospitalization and office visit costs not covered by Medicare A and B. Currently, there are nine standardized Medicare Supplement Plan options available: A, B, D, G, G-High Deductible, K, L, M, and N. Notably, Plans C, F, and F-High Deductible are no longer available to anyone who turned 65 after January 1, 2020. Each option offers the same coverage regardless of which insurance company is offering the plan, but the companies can charge different monthly premiums for identical coverage. 

Are Medicare Supplement Plans and Medicare Advantage Plans the Same Thing?

Medicare Supplement (Medigap) Plans are not the same as Medicare Advantage Plans. Unlike Medicare Supplement Plans, Medicare Advantage Plans (also called Medicare Part C) replace the coverage of both Medicare A and B with coverage through an insurance company. Most Medicare Advantage Plans include prescription coverage, and many include additional benefits like vision and dental care.

What is Medicare Part D, and Who Should Enroll?

Medicare Part D is Medicare’s prescription coverage plan. While Medicare Advantage Plans usually offer drug coverage, Medicare Supplement Plans do not. If a senior is enrolled in a Medicare Supplement Plan, they will also need to enroll in Medicare Part D to cover their prescription costs. Like Medicare Part B, there are penalties for late enrollment in Medicare Part D coverage.

You cannot have a Medicare Advantage Plan and Medicare Part D at the same time. Suppose a senior enrolled in a Medicare Advantage Plan decides to also enroll in Medicare Part D. In that case, they will be dis-enrolled from their Medicare Advantage Plan and placed back on Original Medicare.

Final Thoughts

Choosing the right Medicare option is one of the most critical financial decisions seniors have to make. At American Senior Benefits, agents can provide seniors with the knowledgeable guidance they need to help protect their health and finances. As an American Senior Benefits agent, you can enjoy a rewarding career advising seniors on how best to enjoy their golden years.

How Do I Learn More?

To learn more about reviewing Medicare insurance policies, contact the specialists at American Senior Benefits. Our licensed experts will be happy to answer any questions you have.  

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