Medicare Supplemental Insurance Benefits for Assisted Living & Long-Term Care

Page Reviewed / Updated - May 2017

Definition

Medicare Supplemental insurance is often referred to as Medigap.  Medigap policies are supplemental Medicare insurance policies sold by private companies to fill the “gaps” in Medicare plans. There are 10 standardized plans defined by federal law, referred to as Plans A, B, C, D, F, G, K, L, M and N.   Not all 10 plans are available in every state, nor does each insurance company choose to offer all plans. 

 

Discussion

 Even the most comprehensive Medigap plans do not cover long term care for the elderly.

Medigap plans are intended to fill the “gaps” in Medicare insurance. Since most long-term care for seniors is not covered by Medicare, this is a considerable “gap”. However, even the most comprehensive of the Medigap plans does not cover long-term care needs for the elderly. These policies do not pay for assisted living, Alzheimer's, custodial (personal care), or adult day care. At best, they supplement nursing home care on a temporary basis and help with hospice coverage.

When a senior is in recovery mode following an accident or procedure, some plans will help in limited capacity with skilled nursing care, but this is short term only. Medicare pays for 100% of skilled nursing care for 20 days and they pay approximately 80% of the cost for 80 more days. Some Medigap plans will pay for the remaining approximately 20% for the remaining 80 days, meaning a senior can receive 100 days of skilled nursing care with very little out of pocket cost.

 For military retirees and family members, there are two programs that offer very similar benefits to Medigap plans; these are CHAMPVA for Life and TRICARE for Life. Participation in either of these programs may make having a Medigap plan unnecessary.

 

Qualifying
  • All Medigap policies require a senior to have Medicare, so at a minimum, seniors must meet the Medicare Eligibility Requirements
  • Must be 65 years of age.
  • States regulate these plans. Therefore, seniors must purchase a plan in the state where they reside.
  • Coverage restrictions may apply if a plan is purchased more than 6 months after enrollment in Medicare.

 

Benefits

Medicare supplemental plans benefits extend on the benefits of Medicare. There are 10 different plans; each offers a different level of benefit.  Plans do not provide seniors with cash payments; instead seniors make lower payments to their medical providers.

Benefits differ depending on which of the 10 different policies an individual purchases. As mentioned previously, for skilled nursing care, Medicare pays 100% for 20 days and approximately 80% for 80 more days. Most Medicare supplemental policies will cover the remaining approximately 20%. Seniors can therefore receive up to 100 days of nursing home care with little out-of-pocket cost. No Medicare Supplemental Insurance / Medigap policies pay for assisted living, memory care, or other forms of non-medical, personal care. Medical care is covered for people who reside in assisted living, but not room and board or personal care received in those residences. To be clear, non-medical adult day care (sometimes called adult day social care) and non-medical, in-home care (sometimes called personal, custodial, or companion care) are not covered.

Some of the more robust plans also will pay an “at-home recovery benefit” of up to $40 per visit for 40 visits. This covers custodial care but only for an hourly visit and again only on a short term basis after an illness, injury, or surgery. 

To best understand and  compare benefits of the different plans, visit the Medicare.gov webpage.

 

Costs

Costs will differ for each of the plans. Private insurance companies sell Medigap policies, and the state and federal laws mandate coverage. Therefore, providers all offer very similar policies. Consequently, shopping for a Medicare supplemental insurance policy by price is a smart strategy.

The price of some Medigap polices are not based on the policyholder’s age, while age is factored into the price of other plans. For example, with some plans, the cost is based on the policyholder’s current age and the cost increases as one gets older. With other plans, the cost is based on the age of the policyholder when the plan was purchased. (The plan is less expensive for individuals who purchase it at a younger age). When comparing Medigap insurance plans from different insurance companies, it’s important to ask how the polices are priced. Across the nation, the average monthly rate for a Medigap plan is under $200.

 

How to Purchase

It is best to purchase a policy within 6 months of enrollment in Medicare. During this time, insurers are required to accept applicants regardless of pre-existing conditions.

Medigap plans are sold directly by private companies. Click here to find Medicare Supplemental Insurance in your area.

 Each state has a State Health Insurance and Assistance Program called SHIPs, which are staffed by volunteers that help seniors with their Medicare related questions.  Find SHIPs in your state.