What is the Best Way to Choose a Medicare Supplement Plan?

by David Bynon, last updated

Original Medicare provides health insurance coverage for your major healthcare services. Medicare Part A is your hospital insurance, and Part B is your medical insurance. But, there are huge gaps in the amount the Medicare program covers.

These coverage gaps, including deductibles, copayments, and coinsurance, are financial risks you can limit with Medicare Supplement Insurance (Medigap).

In this article, we’ll walk you through choosing a Medicare Supplement plan by assessing your situation. When you do, you can choose the best Medigap plan for your needs.

Key Takeaways

  • Original Medicare covers about 80% of all Medicare-approved costs.
  • The 20% that Medicare does not cover are out-of-pocket costs that must be paid by the Medicare beneficiary, or through additional coverage.
  • Original Medicare does not have an annual limit on out-of-pocket costs.
  • Benefits that work with Medicare coverage to help cover a beneficiary’s out-of-pocket expenses include federal and railroad retiree health benefits, TRICARE, VA health benefits, and Medicaid.
  • Medigap policies are available for beneficiaries who do not have other coverage benefits.
  • You can get any plan you want during your Medigap Open Enrollment Period, even if you have pre-existing conditions.

Assess Your Situation

As Americans, we all understand our healthcare system is the most expensive in the world. So, it goes without saying that not having additional coverage with our Medicare benefits could put us in a world of hurt, financially.

But, how much additional coverage is enough? And, what is the best Medigap plan?

Those are good questions, but the answer is different for everyone. There are so many different factors, including:

  • Where you live
  • Your age
  • Your health, including your use of outpatient, inpatient, and skilled nursing facility care
  • Your finances and financial goals
  • Your use of tobacco
  • How frequently you have doctor office visits
  • Your potential to have a foreign travel emergency

Let’s talk about some plans and the reasons you might choose one over another to supplement your basic benefits.

Hi there. MedicareWire offers a 100% FREE Medigap Rate Comparison Service. It will arm you with all of the information you need to make an informed decision.

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We are retired seniors, not insurance agents. Our goal is to help folks, just like you, by making sure you have access to rates from all carriers without a sales pitch. No Calls. No Email Spam. No Kidding!

When “Best Plan” = “Most Coverage”

For some people, the question of best means having the most coverage.

Medigap Plan F offers the most coverage possible.

It covers all of the out-of-pocket costs in Medicare Parts A and B.

Unfortunately, this plan is no longer available to new Medicare beneficiaries. Congress put the kibosh on coverage of the Medicare Part B deductible. As a result, Plan G is the next best policy available.

Fortunately, the overall cost of a Plan G policy + the annual Part B deductible makes Plan G a better deal anyway. The following Medicare Supplement Plans Comparison Chart offers you a visual way to compare what each lettered plan covers:

Medicare Supplement Plans Comparison Chart for 2024

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When “Best Plan” = “Good Coverage with Some Out-of-Pocket Costs”

As retirees, most of us find ourselves on a fixed budget. We may be healthy or have a minor health condition that’s easily managed through prescription drug coverage.

If this is your situation, a Plan F or G policy might be too costly or wasteful. In this case, a Medigap Plan N could be an excellent option to consider.

Here’s why.

In most areas, Plan N monthly premiums are 20-30% less than Plan G. Even more when compared to a Plan F. If you are healthy, the monthly premium difference really adds up.

The monthly Plan N premium is so much lower than Plans F and G because you take on some of the costs. For example, with a Plan N policy, you pay up to $20 when you see your doctor and up to $50 to use the emergency room.

But, because you’re healthy, your copayments vs. lower monthly premiums is a reasonable tradeoff.

Plus, don’t forget that your annual wellness exam is excluded. This doctor visit is covered 100% by Medicare.

If you have a chronic condition that you and your primary care physician are managing through medication, Plan N may or may not work. It all depends on how frequently you see your doctor and whether you pay Excess Charges.

Part B Excess Charges are additional fees (up to 15%) that doctors may charge if they do not accept Medicare’s standard rates. Medigap Plan N does not cover Excess Charges, whereas Plan G does.

If you are not in this situation with your doctor, that’s another plus in the Plan N column.

If a small copay and not having coverage for Excess Charges works for you, put Plan N on your shortlist, or ask us for a free rate comparison.

No Calls. No Email Spam. No Kidding!

Get a Free Medicare Supplement Rate Comparison

When “Best Plan” = “Lower Monthly Cost + Risk Protection”

One aspect of Medicare Supplement coverage that needs to be pointed out is how it compares to Medicare Advantage (Medicare Part C). With so many Medicare Advantage plans having a zero-dollar monthly premium, these private insurance plans are hard to ignore.

To understand how a Medicare Advantage (MA) plan might be a benefit, you need to look at total cost vs. risk. Lower premiums may not result in lower healthcare costs.

With a Medigap policy, you pay most costs in advance through monthly premiums. With a Medicare Advantage plan, you pay most costs when you use healthcare services through copays.

This fundamental difference lulls some people into a false sense of lower cost with an MA plan. Only two types of people lower costs with MA plans:

  1. Healthy people who rarely use Part A and Part B services, but take advantage of a plan’s extra benefits;
  2. And people who qualify for a dual-eligible Medicare Advantage Special Needs Plan (D-SNP).

However, there is one feature in Medicare Advantage plans that’s very beneficial. It’s the maximum out-of-pocket (MOOP) limit, and it applies to Medicare Part A and Part B copays and coinsurance.

With MA plans, you are protected by an annual MOOP, which is currently no more than per year (in-network).

That’s a scary number, but you need to consider that Original Medicare has no limit at all.

None. Nada. Zip!

So, that brings us to Medigap Plan K.

Like Plan N, with Plan K you share some of the costs (see the chart above). But, unlike Plan N, there’s an annual limit on your out-of-pocket costs with Plan K (currently ).

When you hit the MOOP with Plan K, all Medicare Part A and Part B coinsurance charges are paid for you at 100% for the remainder of the year.

To see your Plan K rates, be sure to click “Best Plans on a Budget” on our form.

It’s FREE!

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When “Best Plan” = “Rock Bottom + Risk Protection”

Years ago my father taught me a good way to save money on my auto insurance policy. He told me to take the highest deductible possible and be a good driver.

So far, this strategy has saved me thousands of dollars on my auto insurance. I rarely make a claim, so why pay higher premiums?

A growing number of people are starting to look at their healthcare needs the same way. If you rarely make a claim, do you really need one of the best Medicare Supplement insurance plans?

Maybe not.

Both Medigap Plan F and Plan G have a high deductible option. Once you pay the deductible amount towards your Part A and Part B covered services, the policy takes over and pays 100% of your health coverage.

Here’s what I’m doing, and it has worked out pretty well so far.

I opened a new savings account that I only use for healthcare-related costs. Each month I deposit the cost difference between a regular Plan G and a high deductible Plan G. For me, that’s about $100 per month.

After four years of doing this, my account was up to about $3,800. Then I dropped my Harley-Davidson on myself and needed stitches and X-rays for my ribs. The emergency room bill came to just over $4,100.

After paying the deductible, my USAA Medigap policy kicked in and paid the rest. My healthcare savings are down, but not depleted.

Will this strategy work for you? I suggest talking it over with your insurance agent.

If you want to see rates, use our free quote service and ask for “Lowest Cost Plans”.

Get High Deductible Medicare Supplement Rates

The Best Time To Enroll

It breaks my heart when someone tells me they can’t get a Medigap policy because they didn’t enroll on time.

How does that happen?

Unlike Medicare Advantage and Medicare Part D plans (prescription drug plan), Medigap does not have an open enrollment period at a set time each year. Your enrollment period is specific to you.

So, a lot of people miss out on their Medigap protections (guaranteed issue right) because they didn’t understand how critical it is to use their Medigap Open Enrollment Period.

Your personal Medigap Open Enrollment Period begins when you first enroll in Medicare Part B. It starts automatically and lasts for six months.

During this time you can buy any plan from any carrier you choose. So, if you want a Plan G policy from UnitedHealthcare, they can’t turn you down, even if you have pre-existing conditions.

There are two situations that can change things up a little. The first is if you have creditable coverage through an employer. If you’re still working when you turn age 65, be sure to call Medicare and discuss delaying Part B enrollment.

The other situation is if you decide to join a Medicare Advantage plan as soon as you get your Medicare benefits. If you do, you have a trial right, which allows you to switch back to Original Medicare with your Medigap protections.

Your trial right only lasts 12 months, and you can only use it once.

Call 1-855-728-0510 (TTY 711) for plan assistance.

If you qualify for Medicare and don't know where to start, MedicareEnrollment.com, an independent HealthCompare insurance broker, has licensed insurance agents who can help you with your Medicare enrollment options, Mon-Fri, 8am-9pm , SAT 8am-8pm EST.

Medicare Supplement Plan Rate Increases

When you have matched your needs with a plan you can start shopping. You’ll see the monthly premiums first, but don’t immediately latch on to a policy with the lowest rate.

There’s another factor to consider.

Ask your agent to show you the rate increase history on all of the policies presented. When you do, you’ll clearly see that companies don’t all raise their rates at the same time or at the same pace. This is important.

Here’s why.

Medicare Supplement insurance carriers use three common methods to determine rates and rate increases. They include:

  • Attained-age rated
  • Community-rated
  • Issue-age rated

Most experts agree that you should ask your agent to explain the pricing system of each policy they present. You have a right to know if your rates will increase as you age or with the community of policyholders

Also, don’t be shy about picking up the phone to get help.

By law, insurance agents and brokers can’t increase rates. You’ll pay the exact same premium going through an agent or broker as you will going direct.

However, if you go direct, you’ll only see rates from the insurance company you call.

If you don’t already have an agent, call 1-855-728-0510 (TTY 711) and speak with a licensed HealthCompare insurance agent. There’s no obligation, and they offer more plan options than any other national agency.

Find Plans in your area with your ZIP Code

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