Medicare supplement insurance plans, also known as Medigap plans, help pay some Medicare out-of-pocket (OOP) costs. Medigap Plan M has a lower monthly premium, as it provides less coverage than some other Medigap plans.
In this article, learn more about Medigap Plan M, including its costs and what it covers. This article also discusses how to get help with Medicare costs.
We may use a few terms in this piece that can be helpful to understand when selecting the best insurance plan:
- Deductible: This is an annual amount that a person must spend out of pocket within a certain time period before an insurer starts to fund their treatments.
- Coinsurance: This is a percentage of a treatment cost that a person will need to self-fund. For Medicare Part B, this comes to 20%.
- Copayment: This is a fixed dollar amount that an insured person pays when receiving certain treatments. For Medicare, this usually applies to prescription drugs.
Federally funded Medicare is a health insurance program for older adults in the United States. Some younger people with certain disabilities or conditions may also be eligible for Medicare.
The program consists of:
- Part A, which is hospital insurance
- Part B, which provides medical insurance
- Part C, or Medicare Advantage, which offers the same basic coverage as original Medicare (Part A and Part B), together with some additional benefits
- Part D, which covers prescription drugs
Medicare OOP costs are the remaining amounts that an individual must pay after Medicare has contributed its share of costs. The OOP items include deductibles, copays, and coinsurance.
For example, in 2021, the Medicare Part A deductible is $1,484. Of this, Medigap Plan M pays $742, which is 50% of the deductible.
In addition to any Medigap plan costs, a person also needs to pay the Part B premium, which is $148.50 in 2021.
Private insurance companies administer Medigap plans, which are available to a person enrolled in original Medicare (parts A and B). A person with a Medicare Advantage plan cannot enroll in a Medigap plan.
Medicare standardizes the Medigap plans, which means that all Medigap plans of the same letter offer the same coverage, regardless of location. However, plan premiums and availability vary across the country, and Massachusetts, Minnesota, and Wisconsin use a different system to standardize their Medigap policies.
Insurance companies offer 10 Medigap plans — identified by the letters A, B, C, D, F, G, K, L, M, and N — though people qualifying for Medicare in 2021 cannot enroll in Plan C or Plan F.
A person can search for Medigap plans using the policy finder tool.
Medigap Plan M provides the same primary benefits as other Medigap plans. The monthly premium is lower than that of some other Medigap plans, as a person needs to pay half of the Part A hospital deductible and the Medicare Part B deductible.
Medigap Plan M benefits include:
- Part A hospital coinsurance and expenses up to an additional 365 days after original Medicare benefits run out
- Part A deductible up to 50%
- Part A hospice care copayment
- Part B copayment
- first 3 pints of blood for a medical procedure
- skilled nursing facility care coinsurance
- foreign travel emergency coverage to 80%
Medigap Plan M does not provide vision, dental, or hearing care benefits. If someone wants this coverage, they may wish to consider enrolling in a Medicare Advantage plan instead of a Medigap policy. A person cannot enroll in both a Medigap and a Medicare Advantage plan.
Learn more about the pros and cons of Medicare Advantage here.
The costs for Medigap plans vary depending on the company providing the plan, the person’s age, their choice of plan, and their location.
In general, a plan with higher monthly costs offers more benefits, while plans with lower monthly costs may have a higher deductible.
Here are some examples of varying Plan M monthly premiums:
- In New York, a 66-year-old male who does not smoke could expect to pay a Plan M monthly premium ranging from $362 to $524.
- In California, the same person would find the monthly premium for Plan M to be $177.
- In Louisiana, the Plan M monthly premium for the same person would range from $122 to $217.
In addition, a person would have to pay the Medicare Part B premium, which is $148.50 in 2021.
A person can use this online tool to find a policy that best suits their needs.
Factors influencing the costs
Companies may use various factors to calculate the cost of a Medigap plan, including:
- Attained-age-related: The coverage increases as a person gets older.
- Community rate: A person’s age is not a factor in calculating the plan cost.
- Issue-age-related: The age of the person enrolling in the plan affects the cost.
A person can get impartial healthcare advice, including information about Medigap and Medicare, from their State Health Insurance Assistance Program.
For people with limited resources and incomes, a government program called Medicaid may offer help with costs. The qualifying criteria vary by state, though this is generally based on an assessment of the person’s household’s income and assets.
Medicare supplement plans, or Medigap plans, help people pay for remaining OOP healthcare costs after Medicare has contributed its share.
Medigap Plan M generally offers a lower premium than some other Medigap plans, but a person must also pay half of the Medicare Part A deductible, all of the Part B deductible, and the Part B excess charges.
Medigap Plan M does not offer vision, dental, hearing, or prescription drug coverage.