How to choose a Medigap coverage level

With 10 different options to consider, finding the ideal Medicare Supplement (Medigap) plan can be a daunting task. How do you weigh the choices? Find out how to choose a Medicare Supplement plan that’s right for you.

Medicare Supplement Insurance Basics

Before you start browsing plans, make sure you know the basics of Medigap. There are 10 different Medigap policies, and each one comes with standard benefits across the nation. The exceptions to this rule are Massachusetts, Minnesota, and Wisconsin, which standardize Medigap policies differently.

In order to buy a Medicare Supplement plan, you must also have Original Medicare. This includes Part A and Part B. You can have a Medicare Advantage plan when you apply for Medigap coverage, but you’ll need to leave the plan when your new Medigap policy begins.

You can buy a Medigap policy from any private insurance company that’s insured in your state. Not all insurance providers offer every Medicare Supplement plan, but every health care provider who accepts Medicare must also accept your Medigap policy.

How To Find the Least Expensive Medicare Supplement Insurance

While the 10 Medigap policies feature standard benefits in 47 states, the costs for these plans can vary substantially. That’s because each insurance company establishes its own premiums and pricing structure. Factors such as gender, tobacco usage, and marital status typically affect rates. As Medicare.gov explains, there are three types of Medicare Supplement Insurance pricing policies:

  • Community-Rated: All policyholders pay the same monthly premium, no matter their age. Over time, premiums may increase for all policyholders.
  • Issue-Age-Rated: Policyholders pay a monthly premium based on their age when the policy is issued. Premiums may increase due to inflation, but they won’t increase due to age.
  • Attained-Age-Rated: Policyholders pay a monthly premium based on their current age. Premiums increase as policyholders get older and can be very expensive for those of advanced age.

According to Medicare.gov, the least expensive time to buy a Medigap policy is as soon as you’re eligible. Your Medigap open enrollment period starts when you turn 65. During this six-month period, Medigap policies do not require health underwriting.

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How to Choose the Most Comprehensive Medigap Policy

If you’re considering a Medicare Supplemental Insurance plan because you want to fill in Medicare gaps, you may want a full-coverage policy. Medigap Plan F is the most comprehensive option available. It includes Medicare Part A coinsurance and long-term hospital costs, as well as Part B coinsurance or copayments. In addition, Plan F includes Part A hospice care copayments, skilled nursing facility care coinsurance, and Part A and Part B deductibles. If you’re planning a trip abroad, Plan F even includes an 80 percent foreign travel coverage up to $50,000 lifetime after a $250 deductible.

In contrast, Medigap Plan A provides the most minimal coverage. This plan includes just coinsurance costs for Part A and Part B and up to three pints of transfused blood, all of which Plan F includes. If you’re looking for comprehensive coverage, Plan A probably won’t fit the bill.

Other Medigap plans fall somewhere between these two. For instance, Medigap Plan G offers nearly everything Plan F covers, except for the Part B deductible. Plan D offers nearly everything that Plan G covers except the Part B excess charge.

High Deductible Medigap Option

If you want to make sure that all of your healthcare needs are covered, Medigap Plan F is a smart choice. It’s also the most common choice for Medicare Supplement Insurance policyholders. According to Bankrate, 66 percent of Medigap customers choose Plan F. This comprehensive plan can be initially costly for the average policyholder, however, since monthly premiums tend to be high.

To lower their costs, some policyholders opt for the high-deductible version of Plan F. The monthly premiums can be as little as under $50, as Bankrate explains, making this plan very affordable. Keep in mind that you’ll need to meet the annual deductible when you use the plan, which is over $2,000, before you can submit claims. This high-deductible plan may be a smart choice if you want full coverage yet you’re healthy, you don’t visit the doctor frequently, and you don’t anticipate significant health care costs.

Choosing a Medicare supplement plan isn’t easy, but it’s certainly within your grasp when you have the right information in hand. Want to receive helpful information about Medigap coverage? Sign up for our mailing list to get monthly Medicare updates.

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