You may have heard about two types of coverage Medigap and Medicare Supplement. There is no difference between Medigap and Medicare Supplement Insurance. They are simply two different terms for the same type of insurance coverage offered through private insurance companies and used to cover extra health care costs not covered by Original Medicare (Parts A and B).

Extra health care costs?

That’s right, Original Medicare does not cover all of your health care costs.  We’ll break it down here into the two basic parts.

Part A pays for your first 60 days in the hospital. Your share of that cost is a hospital deductible, which will be $1,484 in 2021. After 60 days consecutive days in the hospital, Medicare pays a diminishing share of your benefits. You begin paying a larger share in the form of a daily hospital copay. This can be hundreds of dollars per day, so you need supplemental coverage to protect you from those expenses on Part A services.

This can be hundreds of dollars per day, so you need supplemental coverage to protect you from those expenses on Part A services.

Part B pays for your outpatient care. This includes things like doctor visits, lab-work, imaging tests, surgeries, durable medical equipment, and even things like chemotherapy, radiation, and dialysis. After a small deductible that you pay once per year ($203 in 2021), Part B will cover 80% of all these services for you.

Your share is the other 20% of all these services, with no cap. That can be quite a bit of money for some of the bigger ticket items like surgeries or cancer treatments. You’ll need supplemental coverage to protect you from high Part B expenses.

A Medicare Supplement Insurance (Medigap) policy can help pay some of the remaining health care costs, like:

• Copayments
• Coinsurance
• Deductibles

Some Medigap policies also cover services that Original Medicare doesn't cover, like medical care when you travel outside the U.S. If you have Original Medicare and you buy a Medigap policy, here's what happens:

• You pay a monthly premium to a private insurance company for your Medigap plan. This monthly premium is in addition to your monthly Medicare Part B premium.
• Medicare will pay its share of the Medicare-approved amount for covered health care costs.
• Then, your Medigap policy pays its share.

What are the types of Medicare Supplement Plans?

There are a wide range of Medicare Supplement plans. The different types of plans are named alphabetically, Plan A through Plan N. (Note, that they are not the same as other parts of Medicare, which are also named alphabetically.)

Medicare Supplement plans range from those that offer basic coverage, to those offering a much higher level of coverage. Understanding your health care needs, as well as your financial situation, can help when choosing a Medicare Supplement plan.

Compare Medicare Supplement plans online

While premium amounts differ among insurance companies, the benefits of each standard Medigap plan are the same.

For example, Medigap Plan C policies offer the same benefits regardless of which insurance company provides it. The premium amounts might be different depending on which state you live in.

Medigap plans also allow you freedom of choice in your medical care. You can see any physician or healthcare provider that participates in Medicare (nearly 900,000 providers across the nation).