Even though private-sector insurance companies underwrite, price and administer “Medi-gap” or Medicare Supplement policies, it is compulsory for them to adhere to the guidelines set by the federal government. In fact, the Feds govern and decide what forms private companies can offer. Working from the templates provided, each state then approves the Supplement plans for sale within its borders.

There are many types of Medicare Supplement coverage available such as Plans A, B, C, D, F, G, K, L, M and N.

 ( Note: People often confuse the two sets- Medicare Supplement plans and medicare parts, but these letter denominations are completely separate of and unrelated to Medicare Parts A, B, C and D.)

On an elaborative front, Plan A offers the least additional coverage being the least expensive. Plan B offers a little more additional coverage and also costs more. The trend continues with an incrementing pattern from Plan C through Plan G. Plans K, L, M and N are specialized coverage with restrictions or high deductibles that make them less generous, overall, than Plans F and G as these are the most comprehensive Medigap coverage.

Plans C through G offer some additional coverage:

What all Medicare Supplement plans offer is:

•   the deductible for Part B hospitalization ($1,156 per “benefit period”—usually a year)
•   the deductible for Part A medical expenses ($140 in a calendar year)
•   skilled nursing facility care beyond what Parts A and B pay (up to $144.50 per day for days 21-100)
•   expanded emergency health care while you’re traveling abroad.
•   physician expenses that exceed the Medicare-approved amount but still fall within charged limitations established by Medicare,
•   the Medicare Part B coinsurance amount for days 61-90 ($289 per day in 2012) and days 91-150 ($578 per day) of a hospital stay,
•   the first three pints of blood when provided during a covered hospital/facility stay,
•   coverage of up to 365 more days of a hospital stay during lifetime after all Medicare hospital benefits are exhausted—paid at the applicable prospective payment system (PPS) rate or other appropriate standard of payment,
•   the coinsurance or co-payment amount for Medicare Part A services after the $140 yearly deductible has been met,
•   cost-sharing for all Part B Medicare-eligible hospice care and respite care services.
• A 30 day free-look period is provided on all Medicare Supplement plans. The free-look provision starts from the day the policy is delivered. A Medicare Supplement policy issued or delivered often contains a provision which allows the insured to return the policy or certificate within 30 days and receive a full refund.

Some other notes:

•   Medicare Supplement Plan F has an option called High Deductible Plan F (or F*).
• §  Medicare Supplement Plans K and L cover similar expenses and services as plans A through G. The only difference lies in the fact that they involve more cost-sharing on your part. They have annual out of pocket maximum limits of $4,660 and $2,330 (in 2012) respectively, and once exhausted, after that the policy pays 100 percent of the Medicare co-payments, coinsurance and deductibles for the rest of the calendar year.
• §  Though Plan N includes similar coverage as Plan D but it also involves a co-payment structure of up to $50 for emergency room visits and up to $20 for Part B physician office visits.

Eligibility for Medicare Supplement coverage normally isn’t a problem although timing can be an issue. You may have to wait for the next “open enrollment” period for new coverage to take effect if you try to change plans in the middle of a benefit period (most often, a calendar year). However, if any of the following circumstances apply, you can get replacement Medicare Supplement coverage (at least under plans A, B, C, F, F*, K and L) immediately:

1. You leave the health plan because it failed to meet its contract obligations to you (Example: the marketing materials were misleading or quality standards were not met).
2. Your Medicare Advantage Plan coverage ends because the plan is leaving the Medicare program or stops giving care in your area. You must apply for other coverage between the date you receive notice your coverage will be ending, and no later than 63 calendar days after your coverage ends.
3. You move out of the service area of your Medicare Advantage Plan, Medicare SELECT policy or PACE program.
4. Your Medicare Supplement policy terminates on account of the insurance carrier becoming insolvent
5. You dropped your Medicare Supplement policy to join a Medicare managed care plan (HMO), Private Fee-for-Service plan, or PACE program and then leave the plan within one year after joining.
6. You joined a Medicare Advantage Plan (like a Medicare HMO, PPO, or PFFS plan) or PACE program when you first became eligible for Medicare at age 65 and you leave the plan within one year of joining.

For those last two scenarios to work for immediate replacement coverage, you should make sure that it is the first time you have ever been enrolled in one of these types of plans. If you meet this criteria, you are also eligible to return to your former Medicare Supplement policy, if the same insurance company still sells the plan. If the company doesn’t, you’ll have the right to purchase Medicare Supplement policies equivalent to plans A, B, C, F, F*, K and L.

Important note: It’s illegal for anyone to sell a second Medicare Supplement policy to a person if they have knowledge about the fact that the person already has an existing policy. The only exception to this is if the insured notifies the insurance company, in writing, that they plan to cancel their existing Medicare Supplement policy.

Note: This web site extends to you many useful tools for finding and comparing Medicare Supplement plans. You can also go to the main Medicare website (www.medicare.gov) and access the “Health and Drug Plans” search tool. Choose the “Compare Medigap Policies” tab and follow the instructions to view options in your area.