Medicare Supplement plans, also referred to as Medigap, fill in the gaps in your Original Medicare coverage. But because there are so many options for Medigap plans, many seniors struggle when it comes time to pick a specific plan. Keep reading to find out exactly what plans are available, so that you may confidently answer the question: “Which Medicare Supplement plan is best for me?”
What Medigap Plans Are Available in 2020?
There are 11 total Medigap plans, but as of January 1, 2020, only eight are available to new enrollees. Medicare Supplement Plans C and F are only available to those enrolled in Medicare on or before December 31, 2019. Each Medigap plan differs in cost and coverage. Since Medigap plans are offered by private insurance companies, monthly premium pricing varies. For example, the monthly premium ranges listed below are what a senior in Rochester, New York could expect to pay:
- Total yearly costs are estimated for someone in “good” health. Source: www.medicare.gov Tip: Medigap plans are standardized in most states (Massachusetts, Minnesota, and Wisconsin are the exceptions). For example, Plan N from Insurer A has the same coverage and features as Plan N from Insurer B. You can rest assured that when you are comparing monthly premium prices between private insurance companies, you are comparing apples to apples.
What Are the Most Popular Medigap Plans?
With so many choices, seniors looking for a Medicare Supplement plan often find it helpful to understand which plans are the most popular. According to the most recent data available from the non-profit AHIP’s (American’s Health Insurance Plans) State of Medigap 2019 Report, the most popular plans are:
Plan F: Accounts for 55% of total enrollment. As of January 1, 2020, plan F is no longer available to new Medicare enrollees. If you turned 65 on or after that date, you may no longer purchase it. If you turned 65 before that date, but have not yet enrolled in Medicare, you may still be able to purchase plan F. Plan G: Accounts for 31% of total enrollment. Plan G’s popularity is steadily increasing, partly because it is a great alternative to plan F. Plan G pays for all original Medicare deductible and Part B coinsurance amounts, aside from the Part B deductible (which no plan covers).Plan N: Accounts for 12% of total enrollment. Plan N is also becoming more popular. It offers lower monthly premiums with predictable copays for routine doctor visits and emergency visits.
In contrast, the least popular Medigap plans are Plans H, L, and M, each accounting for less than 0.5% of total enrollees.
Which Medigap Plan Should I Choose?
There is no one specific Medicare Supplement plan that is the “best”— there is only the plan that is best for you. In order to find a Medigap plan that meets your specific needs and budget, ask yourself these questions:
Am I Eligible for a Medigap Plan?
In order to enroll in a Medigap plan, you must already be enrolled in original Medicare (Parts A and B). If you are enrolled in a Medicare Advantage plan (Part C), you are not eligible to also enroll in a Medigap plan. If you do have a Medicare Advantage plan and want a Medigap plan instead, you must first switch to original Medicare.
What Is My Enrollment Deadline?
It is important that you start researching plans and insurance companies far enough in advance to ensure that you have plenty of time to choose a plan before your open enrollment deadline. Aim to enroll in original Medicare—and a Medigap plan—within six months after you turn 65. If you enroll within that Open Enrollment Period, your insurance company guarantees to accept your Medigap application and you will get the best rates. If you miss your Open Enrollment Period, Medigap enrollment gets tricky. Medicare could hit you with a financial penalty. Also, your application could be denied based on certain health conditions, and if it is approved, your premiums could cost more.
What Is My Budget?
Like many Medicare beneficiaries, especially those on a fixed or limited income, your budget will likely play a significant part in which Medigap plan you choose. Your tolerance for risk and uncertainty will also play a role in your choice of Medigap plan. Some enrollees will opt for a lower monthly premium in exchange for higher out-of-pocket costs for medical expenses. Others would rather pay a higher premium in exchange for knowing that their out-of-pocket medical expenses will be capped. Keep in mind that no matter which Medicare Supplement plan you choose, you are still responsible for the following costs:
Monthly Part B premium ($144.60) Part B deductible of ($198)
Be sure that you not only consider what you will pay right now, but also what you will be responsible for paying in the future. Private insurance companies can always raise their rates. Medigap plans are priced in the following three ways:
Community-rated: Monthly premium prices do not depend on age or gender. Premiums can rise due to inflation and outside factors.Issue-age-rated: The rate you get when you first purchase the plan depends on your age, but monthly premiums will not increase along with your age. Premiums can rise due to inflation and other outside factors. Attained-age-related: The rate you get when you first purchase the plan depends on your age. Monthly premiums increase as you get older, and can also rise due to inflation and other factors.
What Kind of Coverage Do I Want?
Your health conditions are another determining factor to consider when choosing the Medicare supplement plan that is best for you. For example:
If you have a low budget and only want the bare minimum cost and coverage, you might want to choose Plan A. This plan pays only the 20% of Part B coinsurance that Medicare does not.If you have a chronic condition and anticipate numerous doctor visits, you may want to choose a plan with fuller coverage and low, or no, copays, such as Plan G.If you are in good health, expect to have relatively few doctor visits, and want to trade lower monthly premiums for higher out-of-pocket costs, Plan N could be a good choice.
Tip: If you travel and having coverage in foreign countries is important to you, you would most likely want to choose a Medigap plan that includes that specific benefit (Plans C, D, F, F+, G, M or N).
What Medigap Insurance Company Should I Choose?
Each private insurance company can choose which Medigap plans to offer, as long as they offer at least Plan A (the most basic plan). Depending on your location and choice of Medigap plan, you could have several insurance companies available to choose from. Tip: The website Medicare.gov lets you view the various insurance companies in your area that offer your desired Medigap plan. The site also gives you the contact information for each available insurer. Because Medigap plans are standardized in most states, some enrollees simply opt for the insurance company with the lowest monthly premiums. But that is not the only criteria you should consider when choosing an insurance company. Here are a few other things to ask yourself:
Do you already have other coverage (life, home, auto) with an insurance company that also offers Medigap plans? If so, you may get a discount for multiple policies.Does the company also offer Medicare Part D (prescription drug coverage), dental, vision or hearing coverage? If so, it could be more convenient to get all of your coverage from the same company.Does the company offer other discounts, such as a discount for setting up automatic payments, not smoking, or paying premiums annually?
What Are the Best Medigap Insurance Companies?
Before purchasing a Medigap policy from any insurer, you will want to be confident that the company is credible, stable, and will be around to pay out its policyholders’ claims. You can research this by checking the company’s insurance rating. Insurance companies are rated by independent agencies (Moody’s, Standard & Poor’s, and Fitch Group are considered to be the “big three”). That rating is an indication of the insurance company’s financial strength and resiliency. Each ratings agency uses a slightly different scale and rates companies based on their short and long-term debt. For example, Standard & Poor’s uses a scale that ranges from AAA (the highest rated) to D (the lowest rated), with many intermediate ratings in between. As ratings can change at any time, you want to check before purchasing a policy from a given insurer. Also, since ratings between agencies can vary, you may want to check with more than one agency.
Popular Medigap Insurance Companies
Dozens of private insurance companies offer Medigap plans, but enrollment is concentrated among a few different insurers. It is important to note that the Medigap plans available to you will depend on the specific insurance company and your individual state. Not all companies sell plans in each state, and not all companies sell all 11 Medigap plans. Some of the most popular insurance companies offering Medigap coverage, along with their ratings, include: Pricing for Medigap plans will vary by your location and insurer, so it’s important to compare prices between insurers before choosing the best Medicare Supplement plan for you. Choosing the right Medigap plan for your needs and budget can be a complicated and time-consuming process. And while there are many online resources that can ease the process of finding the best Medigap policy for you, you do not have to go it alone. Each Medicare plan and insurance product we feature has been independently selected and reviewed by the Medicare Expert USA team. If you make a purchase using the links included, Parade.com may be compensated. Next up, here’show to be a good caregiver and take good care of yourself, too.
