For seniors, these policies can provide peace of mind and simplify monthly Medicare costs. Without a Medigap plan, Original Medicare policyholders will find that tracking deductibles and paying for regular medical treatment out of pocket can become cumbersome. Furthermore, you may find that there are many different unexpected costs associated with your care.
How to choose the 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 the best benefits for you and fills in the coverage gaps where you expect to spend the most on health care.
For example, for the 2021 plan year, the Medicare Part A deductible is $1,484. Some Medicare supplement policies, such as Plan A, provide no coverage for this deductible. Therefore, you would be responsible for paying the entire $1,484 out of pocket before your Original Medicare coverage would kick in.
On the other hand, if you selected Medigap Plan G, the entire $1,484 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. Often, there is an ideal set of supplemental policies for your health care needs.
What is the best Medicare supplement?
As mentioned above, your best Medicare supplement will be the plan that balances costs and coverage. Unfortunately, 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.
It is important to note that policies that offer more comprehensive coverage for deductibles and care will have significantly higher monthly premiums. Below you can find an analysis of the level of coverage and monthly premium ranges for all of the Medicare supplement plans.
|Medicare Part A coinsurance||100%||100%||100%||100%||100%||100%||100%||100%||100%||100%|
|Medicare Part B coinsurance||100%||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 coinsurance||100%||100%||100%||100%||100%||100%||50%||75%||100%||100%|
|Skilled nursing facility coinsurance||100%||100%||100%||100%||50%||75%||100%||100%|
|Medicare Part A deductible||100%||100%||100%||100%||100%||50%||75%||50%||100%|
|Medicare Part B deductible||100%||100%|
|Medicare Part B excess charges||100%||100%|
|Foreign travel emergency||80%||80%||80%||80%||80%||80%|
Prices found below for each Medicare supplement policy will vary by state.
Find Cheap Medicare Plans in Your Area
Best overall Medicare supplement for new enrollees: Plan G
Due to the inability of new applicants to purchase Plan C and Plan F, 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 — $203 a year for 2021 — before insurance benefits will begin to pay out.
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 give you peace of mind about day-to-day expenses, such as paying a copay for a doctor. The monthly premium for Plan F will be $221. Unfortunately, Plan F will not be available to new Medicare enrollees who become eligible after Jan. 1, 2020. Anyone who currently has Plan F 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 types of health care.
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 to forecast your costs and compare them 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’s 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.
UnitedHealthcare (UHC) is one of the best Medigap companies since it is paired directly with AARP. AARP is one of the largest advocacy groups for Americans over 50 years old, with more than 38 million members. Additionally, UHC has great financial strength, with a score of an A from AM Best.
Aetna is another strong Medicare supplement provider — the company has an AM 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, similar to UHC and Aetna, currently has an AM 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.
Medicare supplement plans and costs were found using the Medicare.gov plan search tool. Medicare company selections were determined based on costs, customer reviews, NAIC complaint index and financial strength ratios.