How To Choose a Medicare Supplement (Medigap) Policy
Compare Medicare Plans in Your Area
Choosing the best Medicare Supplement plan for you depends on your coverage needs and budget.
Most people choose Medigap Plan G because it offers the best coverage for new enrollees. But, Plan G also has high average costs. A cheaper plan that covers fewer things might make sense if you're in good health, and you can afford to pay more when you go to the doctor.
What is Medigap insurance?
Medigap insurance helps you pay less for the costs you're responsible for with Original Medicare (Parts A and B). It's important to get a Medigap policy because otherwise you won't have a cap on how much you pay when you visit the hospital.
All Medicare Supplement (Medigap) plans typically offer the same level of coverage if they have the same plan letter. That means a Medigap Plan G from AARP/UnitedHealthcare covers the same costs as a Plan G policy from Blue Cross Blue Shield.
You can't buy a Medigap policy if you have a Medicare Advantage plan. That's because Medicare Advantage plans already limit how much you'll pay when you go to the hospital.
Decide how much Medigap coverage you need
The right Medigap plan for you depends on how much coverage you need.
Although nearly everyone has access to 10 Medigap plan types, most people choose Medigap plans G, F and N.
That's because these plans offer the most coverage. But, if you're healthy and don't mind paying more at the doctor, you may be better off with a cheaper plan that covers fewer things like Plan K or Plan L.
Best Medicare Supplement plans for new enrollees
Plan G | Plan N | Plan K | |
|---|---|---|---|
| Cost per month | $159 | $121 | $83 |
| Part A coinsurance | |||
| Part B coinsurance | 50% | ||
| Blood transfusion(3 pints) | 50% | ||
| Part A hospice care | 50% | ||
| Skilled nursing facility | 50% | ||
| Part A deductible | 50% | ||
| Part B excess charges | |||
| Foreign travel emergency . | 80% | 80% |
Average costs are for a 65-year-old woman who doesn't smoke.
Keep in mind that outside of certain circumstances, companies can consider your health history when setting plans and approving coverage.
That means it's not usually a good strategy to start with a cheaper plan when you're young and healthy before moving to a more expensive plan with better coverage when you're older. But, there are some exceptions to this rule. For example, Blue Cross Blue Shield lets you switch Medigap plans at any time without taking your health status into account through its Blue to Blue program.
Plus, five states have extra laws that let Medicare enrollees switch Medigap plans without penalty.
Some states let insurance companies sell "innovative Medigap" plans that bundle extra coverage options like vision, dental and wellness programs with standard Medicare Supplement policies. Coverage details and availability differ by state and company.
Massachusetts, Wisconsin and Minnesota don't follow the standard 10-plan Medigap format. Instead, Wisconsinoffers just one Medigap plan, Minnesota offers two and Massachusetts offers three.
These plans don't have the same letter names as regular Medigap plans. For example, in Minnesota, you can choose from the Basic Plan or the Extended Basic Plan, while in Massachusetts you have the Core Plan, the Supplement 1 Plan and the Supplement 1A Plan.
Shop around for the best Medigap company
Price and customer service quality are the only factors you should consider when choosing between Medigap companies.
That's because you'll get the same coverage no matter which company you pick. But, some companies have cheaper rates and better customer satisfaction rates than others.
Companies may offer cheaper plans for a few reasons. For example, some companies are more efficient than others. But, companies with more expensive plans also often offer better customer service and faster claims processing.
Choosing the cheapest plan in your area may leave you with a headache later on if the company has poor customer service.
You should consider companies like AARP/UnitedHealthcare and Mutual of Omaha if customer service is important to you. These companies tend to get fewer complaints than average.
On the other hand, companies like Humana typically have expensive rates and bad customer service.
Find discounts and cost savings
Before you buy a Medicare Supplement plan, take advantage of discounts and savings programs to see if you can lower your costs even more. For example, some insurance companies offer discounts for customers who live with a spouse, partner or roommate.
Customers can also take advantage of other common discounts for things like signing up for online bill pay or autopay. For example, Humana will take $2 off your monthly rate when you set up an automatic payment through your bank or credit card.
You can also get lower rates by enrolling in a Medicare Select plan. These plans offer the same coverage as regular Medigap policies. However, you can only go to doctors in the plan's network.
Medicare Select works like an HMO but for Medicare Supplement policies by limiting you to a network of doctors.
Contact a Medigap company or broker
After you decide on a plan, you can get in touch directly with the best Medicare Supplement company in your area or contact a local broker.
If you feel confident going through the sales process on your own, consider buying a Medigap plan directly from your preferred company. Otherwise, getting a broker can help you find the best plan and company that fits your needs. Brokers typically have an in-depth knowledge of the products they're selling.
It's a good idea to look at third-party rating platforms like Yelp or Google Reviews before you hire an insurance broker. Recommendations from past customers can help you find the best brokers in your area.
If you wait until after the first six months after you become eligible for Medicare to buy a Medigap plan, you may have to fill out a health questionnaire and possibly pass a physical to qualify for a policy.
Each state runs its own Seniors' Health Insurance Information Program (SHIIP) that offers free advice and counseling for Medicare-related topics like how to apply for Medicare. You can speak with a SHIIP agent to learn more about Medicare Supplement policies and coverage.
Frequently asked questions
How do you choose a Medicare Supplement plan?
When choosing a Medicare Supplement plan, you should look at your health needs and budget. Healthy individuals might save money with a plan that offers less coverage while people who need more medical services should consider a plan that has more coverage.
Keep in mind that changing your plan later on can be difficult, so it usually makes sense to choose a plan with better coverage even if you're in relatively good health now.
What's the most popular Medicare Supplement plan?
Most people choose Medigap Plan Gbecause it offers the most complete coverage of any plan available to new Medicare enrollees. Plan F is also popular,but it's only available if you became eligible for Medicare before Jan. 1, 2020.
What is the downside to Medicare Supplement plans?
It's hard to change Medicare Supplement plans after the first six months when you first become eligible for coverage, called an initial enrollment period. That's because companies can charge higher rates or deny coverage based on your medical history in many cases.
Medigap plans also often have higher monthly rates than Medicare Advantage plans.
Sources
Medicare Supplement plan details and rules are from Medicare.gov. Medigap company recommendations are based on plan costs, and complaint data is from the National Association of Insurance Commissioners (NAIC).
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