Do You Need Supplemental Medicare Insurance?

Written by Jordan McElwainUpdated: Wednesday, February 15, 2023

Medicare beneficiaries are not required to enroll in supplemental Medicare insurance, but we recommend doing so to limit your medical costs. Only 10% of Medicare beneficiaries choose not to enroll in supplemental Medicare insurance. This is because Original Medicare (Parts A & B) only covers about 80% of costs for covered services—and it doesn’t cover prescriptions. If you need surgery or take regular prescriptions, the lack of comprehensive coverage could cause serious financial strain.

Original Medicare also has no out-of-pocket limits, so you’ll owe at least 20% of the costs of all medical services you receive. Healthcare costs can reach astronomical levels quickly. One $50,000, outpatient surgery will cost you at least $10,000 if you only have Original Medicare. Supplemental Medicare insurance, however, limits your out-of-pocket costs and financial risk.

What are your supplemental insurance options with Medicare?

Supplemental insurance options for Medicare beneficiaries include Medigap, Medicare Advantage, and Part D plans. For those who are unfamiliar with these options, below are brief explanations:


Medigap (also referred to as Medicare Supplement) plans sit on top of Original Medicare to help cover the 20% of costs not covered by Original Medicare. There are 10 types of Medigap plans with varying levels of coverage, none of which provide additional services not covered under Original Medicare. 

Medicare Advantage

Medicare Advantage (also known as Medicare Part C) is a bundled option for your Medicare coverage. By law, Medicare Advantage plans must cover at least the same services as Part A and Part B. They generally provide additional benefits, including dental, vision, and hearing services and prescription drug coverage.

Part D

Medicare Part D covers prescription drugs, which are not covered by Original Medicare. Many Medicare Advantage plans include Part D coverage. For those on Original Medicare (with or without a Medigap plan), there are stand-alone Part D plans.

Choosing your supplemental Medicare insurance

Most Medicare Advantage plans come with Part D coverage—and all Medicare enrollees who don’t have Part D coverage tied to a Medicare Advantage plan can enroll in a stand-alone Part D plan. Because of this, the real decision you need to make is: Medigap or Medicare Advantage?

This decision should be made with careful consideration. At Chapter, we use Ari Parker’s 3 Ps method to determine which supplemental option is best for your unique health and financial needs. The 3 Ps are simple: providers, prescriptions, and priorities. Together, we’ll look at your current prescriptions and healthcare providers as well as your priorities concerning ancillary benefits and financial savings. We use this information to provide a Medicare plan recommendation that fits your needs like a glove.

Need help determining which supplemental insurance is best for your healthcare needs? Learn about your options and how they differ by speaking with one of our amazing Medicare Advisors. Pick a time to chat via this link!

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