Health Insurance

4 Best Medicare Supplement Plans for 2020

Medicare supplement plans, commonly known as Medigap, are additional Medicare health insurance policies that you can purchase. These policies are designed to help pay for the many gaps in coverage — deductibles, coinsurance and copays — for Original Medicare.

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For seniors, these policies can provide peace of mind and simplify monthly costs for Medicare. Without a Medigap plan, policyholders of Original Medicare will find that tracking deductibles and paying for regular medical treatment out of pocket can become cumbersome. Therefore, your best medicare supplement plan will be one that balances your monthly premium and fills the most gaps in coverage.

How to choose your best Medicare supplement plans

The best medicare supplement plan for you will depend on which Original Medicare parts you need filled and the cost of the plan. You should choose the supplement policy that provides your best benefits and fills in the gaps in coverage that you expect to spend the most on health care.

For example, for 2020, the Medicare Part A deductible is $1,408. Some Medicare supplement policies, such as Plan A, provide no coverage for this deductible. Therefore you would be responsible for paying the entire $1,408 out of pocket before your normal Original Medicare coverage would kick in.

On the other hand, if you selected Medigap Plan G, the entire $1,408 deductible would be covered by your supplement policy. This means you would not need to incur the out-of-pocket costs and would begin getting your claims paid for immediately. However, you should also consider costs, since Plan G can be more expensive than Plan A.

It is for this reason that you should carefully analyze what each Medigap plan covers and costs so that you can choose the best one for your situation.

What is the best Medicare supplement?

As mentioned above, your best Medicare supplement will be the plan that balances costs and coverage. However, starting in 2020, the most comprehensive plans, C and F, will not be available for new enrollees. In lieu of these new regulations, it is critical to reassess and evaluate all available Medigap policies. Furthermore, on a high level, policies that offer more comprehensive coverage will have significantly higher monthly premiums. Below you can find an analysis of the level of coverage and monthly premium ranges for all the Medicare supplement plans.

Plan APlan BPlan CPlan DPlan FPlan GPlan KPlan LPlan MPlan N
Medicare Part A coinsurance100%100%100%100%100%100%100%100%100%100%
Medicare Part B coinsurance100%100%100%100%100%100%50%75%100%100%
Blood (3 pints)100%100%100%100%100%100%50%75%100%100%
Part A hospice care coinsurance100%100%100%100%100%100%50%75%100%100%
Skilled nursing facility coinsurance100%100%100%100%50%75%100%100%
Medicare Part A deductible100%100%100%100%100%50%75%50%100%
Medicare Part B deductible100%100%
Medicare Part B excess charges100%100%
Foreign travel emergency80%80%80%80%80%80%
Premium range$147-$784$202-$726$239-$573$221-$515$221-$544$199-$473$62-$135$119-$301$201-$430$146-$289

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Best overall Medicare supplement for new enrollees: Plan G

Due to the inability for new applicants to purchase Plan F and Plan C, Medicare supplement Plan G is the best overall plan that provides the most coverage for seniors. Plan G is very similar to Plan F in that it will cover almost everything except the Part B deductible. This means that you would be responsible for paying the entire Medicare Part B deductible — $198 a year for 2020 — before insurance benefits will begin to payout.

However, Plan G will have one of the highest monthly premiums among all the Medicare supplement policies: $473. Therefore, you should weigh the cost of this monthly premium with your potential medical expenses for the year.

Best overall Medicare supplement pre-2020: Plan F

Plan F has the highest Medicare supplement premiums compared to C, G and N. On the other hand, it will cover all the items that you would usually need to pay for out of pocket including deductibles and coinsurance.

Plan F is a good option if you want a comprehensive policy that will leave you not having to worry about day-to-day expenses such as paying a copay for a doctor. The monthly premium for Plan F will be $140. Unfortunately, Plan F will not be available to new Medicare enrollees who become eligible after January 1st, 2020. Anyone with Plan F currently will be able to keep their coverage.

Best cheap Medicare supplement: Plan K

If you are interested in the cheapest Medigap policy that still provides some coverage for Original Medicare costs, you may want to look into Plan K.

Plan K is significantly different from many other Medicare policies since it provides only 50% coverage for Medicare Part B coinsurance, blood, Part A hospice, skilled nursing and the Part A deductible. Many other Medigap plans, such as Plan G, provide full reimbursements for these health care areas.

This is crucial to consider if you need health insurance coverage for skilled nursing. In this case, if you were to get Plan K, only 50% of such costs would be covered.

On the other hand, your monthly premiums will be much cheaper when compared to every other Medicare supplement policy available. Policyholders can expect to pay a monthly premium between $62 and $135.

Best alternative to Plan G Medicare supplement: Plan N

Plan N is a good option for individuals who do not want to purchase Plan G but still want comprehensive Medicare insurance coverage at a cheaper price.

Policyholders of Plan N will miss out on the Medicare Part B deductible and excess charges, which can add up quickly since Part B covers many routine medical expenses like outpatient care and preventive services. For this reason you should try and forecast your costs and compare that to the annual premium for Medigap Plan N, which is between $1,752 and $3,468.

Best medicare supplement companies

Unlike health insurance, where policies differ among providers, Medicare supplement plans are standardized so that the benefits for each plan letter are the same for each company. This means that Medicare supplement Plan G from UnitedHealthcare will be identical in coverage to the Plan G offered through Aetna.

However, rates will change from company to company since each provider will choose a different pricing structure for their Medicare supplement plans. It is important that you take this into account along with each provider’s financial strength and history of rate increases. Some companies may offer cheap rates but will increase your rates more quickly as you age.

Variety of products available including dental, vision and health, but availability in some states may be limited.
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UnitedHealthcare (UHC) is one of the best Medigap companies since they are paired directly with AARP. AARP is one of the largest advocacy groups for Americans over 50 years old, with over 38 million members. Additionally, UHC has great financial strength, with a score of an A from A.M. Best.

There's no individual health insurance offering, but it has a superior app experience and strong financial ratings.
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Aetna is another strong Medicare supplement provider — the company has an A.M. Best score of A. The company currently offers Medicare supplement plans A, B, F, G and N to a variety of states at competitive rates. However, if you want a different Medicare supplement plan such as Plan C, D, K, L or M, you would need to purchase the policy from a different provider.

Cigna has limited availability, but in states where it is available, policies are more affordable than those from other insurers.
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Cigna, similar to UHC and Aetna, currently has an A.M. Best rating of A, meaning that it has the financial strength to continue to pay health insurance claims in the future. Cigna Medicare supplement has some added benefits when compared to other companies such as a household premium discount. The discount is available in most states when multiple family members in the same household enroll in the same Cigna Medigap plan.

Sterling Price

Sterling Price is a research analyst at ValuePenguin specializing in health and life insurance. He graduated from Syracuse University with a bachelors degree in Finance and Accounting and has previous experience as a licensed life insurance representative.

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