Understanding Medicare Plan J & Medigap Supplement Insurance

• Original Medicare beneficiaries can enroll in a Medicare supplement insurance plan, known as Medigap or MedSupp, to ​“fill in the gaps” of their Original Medicare plan’s coverage. Medicare Advantage beneficiaries cannot enroll in a Medigap policy, however. 

• A Medicare supplement plan helps cover Medicare-approved expenses such as costs associated with prescription drugs in some cases. It will not cover dental and other such costs that are not included in Original Medicare plans. 

• Plan J was a Medigap policy that is no longer available for purchase as of June 2010. Those who were enrolled in Medigap Plan J prior to that time are allowed to keep their Plan J coverage so long as their insurance company continues to provide the Medigap policy. 

Medicare is a government health insurance program created by the federal government in 1965. Medicare plans provide health insurance for those age 65 and older, younger Americans with disabilities, and those with end-stage renal disease (ESRD)

There are two main ways someone can enroll in Medicare: Original Medicare or Medicare Advantage.

While Original Medicare covers many healthcare services, it does not cover everything. That said, those who decide on an Original Medicare plan have the option to add a Medicare supplemental insurance policy to their coverage. These supplemental insurance policies are offered by private insurance companies and are often known as Medigap (or MedSupp). 

There are various types of Medigap policies to choose from. At present, there are 10 different Medigap plans available: A, B, C, D, F, G, K, L, M, and N.

In the past, Medicare beneficiaries had the option to enroll in Plan J. However, this is no longer an option as of June 2010 due to the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. Those who were enrolled prior to June 2010 are still allowed to keep their Plan J coverage as long as their insurance provider continues to offer it. 

This article will explain everything there is to know about Medigap Plan J as well as other Medigap policies with similar coverage and how to choose the best Medigap policy based on a beneficiary’s medical and financial situations.

Medicare Supplement Insurance—also known as Medigap—helps cover insurance costs that Original Medicare doesn’t cover. Unlike the federal Medicare program, Medigap is offered by private health insurance companies. Other popular Medicare supplement insurance plans include Medicare Advantage, standalone prescription drug plans, and various other Medigap plans.

After Medicare covers its agreed-upon costs, Medigap policies serve as additional coverage. Medigap pays a Medicare-approved amount of leftover costs—including copayments, coinsurance, and deductibles. Additionally, Medigap can offer options that Original Medicare doesn’t, like medical services when you travel outside of the U.S.

There are currently 10 different Medigap plans: A, B, C, D, F, G, K, L, M, and N. However, some of these plans are no longer available to people newly enrolled in Medicare—such as Plan J.

Medigap Plan J was one of several possible Medicare supplement plans to choose from. In June of 2010, due to the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, the plan became discontinued for new enrollees. However, people who were enrolled in Medicare prior to June of 2010 and already enrolled in Plan J were allowed to keep their coverage, so long as the insurance company continued to offer it.

In terms of coverage, Plan J is considered to be the most amount of available coverage a person can buy. Benefits of Plan J include:

• Medicare Part A coinsurance and hospital stays up to 365 days after Medicare benefits are used up

• Medicare Part A and Part B deductibles

• Medicare Part B excess charges

• Medicare Part B coinsurance or copayments

• Coverage for the first three pints of blood

• Hospice care coinsurance or copayments

• Skilled nursing facility care coinsurance

• Foreign travel emergencies

• Preventive care

• Recovery at home (up to $1600)

• Prescription drug benefits (only with some plans)

While Plan J is closed to new Medicare enrollees, there are still some Medicare beneficiaries enrolled in this type of Medigap policy. While Plan J’s coverage is quite comprehensive, Medicare has evolved over the last decade, and some of Plan J’s benefits are covered in other ways within the Federal Medicare Program. Because of these changes, Plan J beneficiaries may be wondering whether they should keep or change their Medigap policy. 

There are a number of considerations to take before dropping Plan J and switching to another Medigap policy:

• Cost: The annual deductible for Plan J as of 2021 is $2,370, which is higher than most Medigap deductibles.

• Benefits: Hospice care is now covered in Part A (hospital insurance) while preventative care is covered in Part B (medical insurance). The introduction of Medicare prescription drug coverage (Part D) also made the prescription drug benefits aspect redundant.

• Travel: There are still a few benefits to continuing to keep Plan J, particularly if a person does a lot of foreign traveling. Plan J helps cover medical emergencies during foreign travel.

For those who weren’t eligible for Medicare until after 2010, Plan J is no longer an option. However, there are other plans still available that offer very similar benefits as Plan J. Previously, the closest compatible option was Plan F, but as of January 2020 is no longer an option for new Medicare enrolled. Currently, the most comparable options are Plan G, and Plan N. 

Plan G

Plan G covers nearly all the same benefits as Plan J, with a few notable exceptions:

• Foreign travel emergencies are only covered 80%, as opposed to 100% with Plan J

• Plan G only covers Part A deductible, not Part B

• Does not include recovery at home

• Does not include prescription drug coverage

Plan G premiums may also be lower than Plan J options—check with each plan to compare.

Note: Learn more bout Medigap Plan G and how it compares to other plans at this resource.

Plan N

Like Plan G, Plan N also shares many similarities to Plan J, with a few exceptions. Some of the differences are:

• Foreign travel emergencies are only covered by 80%, as opposed to 100% with Plan J

• Plan A only covers Part A deductible, not Part B

• Does not cover Part B excess charges

• Does mot include recovery at home

• Does not include prescription drug coverage

Plan N premiums may also be lower than Plan J, so it’s important to compare plan costs when making the decision to switch from Plan J to another Medigap policy.

Note: For more information about Plan N and how it compares to other plans, visit this resource. 

Due to the fact that there are many Medigap plans to choose from, it is understandable that someone may feel overwhelmed by their options. Below are some best practices for picking the right plan for someone given their situation, medically and financially:

• Call State Health Insurance Assistance Program (SHIP). SHIP can provide free guidance in choosing a policy. Do note, not all states participate in SHIP. Learn more at this resource.

• Research online: Visit the official website of the Centers for Medicare & Medicaid Services for complete details on everything there is to know about the particulars of Medicare coverage. 

• Discuss options with a licensed insurance agent: Licensed insurance agents can help enrollees navigate their Medigap choices and help them make the best decision. 

• Contact Medicare: Get the contact information for Medicare at this resource.

• Review medical records: For those who have infrequent doctor visits, Plan N may be a good option because of its lower monthly premiums. 

• Compare Medigap policies: This page found on the official Medicare website lays out everything beneficiaries need to know about the various coverage levels available when it comes to Medigap.

How are Medigap policies standardized? 

Medigap policies are standardized, meaning these Medicare supplement policies must follow both state and federal laws. These laws are in place to protect beneficiaries. For example, insurance providers must clearly identify Medigap as ​“Medicare Supplement Insurance.” 

All Medigap policies offer the same basic benefits. Some policies offer additional benefits, too. Do note, Medigap policies are standardized in a different way for those who live in Massachusetts, Minnesota, or Wisconsin. 

Note: Learn more about Medigap at this resource.

When is the best time to purchase a Medigap policy? 

The official Medicare website recommends Medicare enrollees buy a Medigap policy during the initial enrollment period (IEP).

Note: Learn more about purchasing Medigap at this resource.

Can Medigap be used with an MA plan?

No, a Medigap and Medicare Advantage plan cannot be combined. In fact, it is illegal for an insurance provider to sell a Medicare beneficiary a Medigap policy unless they are switching back to an Original Medicare plan. 

Note: Learn more about Medigap and Medicare Advantage plans at this resource.

When is the best time to change or drop a Medigap policy?

If a beneficiary is unhappy with their Medigap policy, they do have the option to drop or change their Medigap plan. Timing is crucial, however, in dropping or changing Medigap policies because there are instances a beneficiary may need to pay a late enrollment penalty as result.

Note: Learn more about dropping or changing Medigap coverage at this resource.