Medicare Part B covers medical bills but does not provide full coverage. You pay 20 percent of the bills for doctors’ visits and outpatient treatment, for example. Therefore, many Medicare enrollees buy Medicare supplement ("Medigap") insurance from private companies. There are several types of policies, but each type is standardized by federal law.
Every type of Medigap policy will pay the 20 percent share of doctors’ bills and other medical treatment. Different types have additional benefits.
A recent survey found that "Plan F" is by far the most popular type of Medigap policy, with a 40 percent market share. Its benefits include care outside the U.S.; long stays in skilled nursing homes; deductibles for hospitalization, medical, and outpatient expenses; and so-called "excess charges." The last-named coverage pays the difference between what a doctor or provider charges and the amount Medicare will pay.
For federal retirees who keep their Federal Employees Health Benefits insurance, FEHB effectively acts as a Medigap plan since it fills in as the second payor behind Medicare, and thus most do not purchase Medigap coverage as well.
