Medicare Supplement Plan J is a policy that helps pay out-of-pocket expenses. Medicare has discontinued this plan for new enrollees.
Medicare supplement insurance plans, also known as Medigap, help pay for the costs that people with original Medicare incur, such as coinsurance, deductibles, and copayments.
Private insurance companies administer Medigap policies, which must follow Medicare rules. Some Medigap policies become unavailable when Medicare benefits change.
Medicare supplement insurance (Medigap) plans fill the “gaps” in Medicare parts A and B, which include some essentials — such as prescription drugs — and out-of-pocket expenses. These expenses include:
- Deductibles: This is the amount that a person must pay before the insurance starts paying.
- Coinsurance: This is a percentage amount that a person pays toward their healthcare costs once they have fully paid their deductible. Coinsurance is often about 20% of a particular service.
- Copayments: A person pays this fixed amount at each provider visit.
- Excess charges: A person is responsible for paying this charge in addition to any applicable coinsurance and copayment. Excess charges often apply when a provider charges more than Medicare approves for a service, which some states allow.
Until 2010, Medicare Supplement Plan J was one of several available Medigap plans. Anecdotal evidence suggests that the benefits that the policy offered made it one of the most popular.
Medigap Plan J is not available to those who became eligible for Medicare after June 1, 2010. People who purchased Plan J before June 1, 2010, can usually keep the plan.
Plan J has comprehensive coverage that includes:
- Part A hospital costs for 365 days after Medicare benefits are exhausted
- Part A coinsurance up to 365 days after Medicare benefits are exhausted
- Part A yearly deductible
- Part B coinsurance or copayments
- Part B yearly deductible
- Part B excess charges
- the first 3 pints of blood
- hospice coinsurance or copayments
- skilled nursing facility coinsurance
- foreign travel
- preventive services
The plan sometimes includes coverage for prescription drugs with a deductible of $250 per year.
When people were able to enroll in Medigap Plan J, they could select a high deductible option. A person would pay the higher deductible of $2,370 each year before the plan started to pay for approved costs.
In 2003, the Medicare Prescription Drug Improvement and Modernization Act (MMA) became law, and this changed the structure of benefits within Medicare.
MMA added Medicare Part D, a prescription drug plan, to the list of available policies, creating many similarities between Part D and Plan J. Due to these similarities, sales of Plan J stopped as of June 1, 2010. However, those who still have Plan J may keep it.
If a person with Plan J wishes to change to another Medigap plan, they may do so by contacting their new or existing plan provider. Medicare has a helpful web tool that a person can use to compare plan options in their zip code.
No Medigap plans sold after January 1, 2006, are allowed to include coverage for prescribed medication. If a person purchased a policy before this date and it covered prescription drugs, they can keep the plan.
Although Medicare Plan J is no longer available for purchase, individuals can choose from other Medigap plans.
Private insurance companies can decide on the Medigap policies that they offer. However, the company must have the authorization to operate in-state, meaning that not all plans are available in all states.
Each policy is labeled with a letter. In 2021, 10 standardized Medigap plans are available: A, B, C, D, F, G, K, L, M, and N. It is important to note that Medigap Plan C is different than Medicare Part C, which is also known as Medicare Advantage.
When looking at the coverage for each plan, a person should note the following:
- All Medigap plans cover the Part A coinsurance and hospital costs up to 365 days after Medicare benefits are exhausted.
- All plans help pay the Part B coinsurance.
- Massachusetts, Minnesota, and Wisconsin standardize Medigap policies in different ways.
- Medigap plans C and F are not available for those new to Medicare after January 1, 2020.
- When a person meets their yearly out-of-pocket limit for plans K and L, the plan pays 100% of covered services for the rest of the year. In 2021, these limits are $6,220 for Plan K and $3,110 for Plan L.
- Plan N pays 100% of Part B coinsurance, except for a $20 copayment for office visits. Plan N also requires a $50 copayment for emergency room visits.
A person can compare Medigap policies in their zip code using Medicare’s online search tool.
Medigap policies often cover benefits that original Medicare does not offer. For example, the plan may cover medically necessary care when a person is traveling outside of the United States.
However, Medigap policies generally do not include coverage for:
- eye care
- dental treatment
- hearing aids
- long-term care
- private nursing
To enroll in a Medigap policy, an individual must have Medicare parts A and B and pay the Part B monthly premium directly to Medicare.
The premium for a Medigap plan is payable to the private insurer that administers it.
When it was available, Medicare Supplement Plan J was a popular Medigap policy choice due to the comprehensive benefits it offered. However, it is no longer an option for those new to Medicare.
If a person enrolled in Plan J after June 1, 2010, they can continue with the plan. If they have the high deductible version of Plan J, the deductible may increase each year.
Similarly, if a person enrolled in Plan J before January 1, 2006, and the plan included coverage for prescribed drugs, they may keep it. However, no Medigap plans sold after this date are allowed to include coverage for prescribed medication.
Other Medigap plans are available, and a person can research all available options in their area to find the best plan for their circumstances.
Private insurance companies sell Medigap policies and set the premiums. Costs and plan availability may vary among states.