With so many Medicare plan options available, and the various differences between them, choosing the right plan can feel overwhelming. In this article, we’ll help you choose the right Medicare Supplement plan by exploring the most popular and widely-used plans.
- Medicare Supplement Plans are offered by private insurance companies to help cover some of the costs not covered by Original Medicare.
- Medicare Supplement Plans are also known as Medigap Plans.
- There are 10 different types of Medicare Supplement Plans available in most states, labeled A through N.
- The most popular Medicare Supplement Plans are Plan F, Plan G, and Plan N.
- Plan F is the most comprehensive and expensive plan, covering all out-of-pocket costs for Medicare-covered services.
- Plan G is the second most popular plan, covering all out-of-pocket costs except for the Part B deductible.
- Plan N is the third most popular plan, covering all out-of-pocket costs except for the Part B deductible and copayments for some services.
- All Medicare Supplement Plans cover the Part A deductible, coinsurance, and copayments, as well as up to three pints of blood per year.
Medicare Supplement Insurance, commonly referred to as Medigap, is a supplemental health insurance policy that helps cover some of the costs not covered by Medicare Part A and Medicare Part B (Original Medicare). This type of coverage is offered by private health insurance companies but must follow federal and state regulations.
Supplemental Medicare insurance helps cover the out-of-pocket expenses not covered by Parts A and B, including deductibles, copayments, coinsurance, etc. Depending on the plan chosen, these supplemental plans can give people financial relief from the costs of Medicare-approved healthcare services.
Advantages of Medicare Supplement Plans
As mentioned above, Medicare Supplements cover some of the out-of-pocket costs in Original Medicare. The plan you choose will determine which costs are covered. The best way to understand is to have a look at a Medigap comparison chart:
The chart clearly shows you what each plan covers. There is no ambiguity. If Medicare Part A or Part B covers a service, a Medigap plan must also cover it, up to the limits of the policy.
This is the number one advantage of supplemental Medicare insurance. Coverage is cut and dry.
Other advantages include:
- No provider networks (most healthcare providers accept Medicare) unless you buy a Medicare SELECT policy.
- Preauthorization and referrals are not required.
- Coverage travels with you everywhere you go in the USA and its territories.
- The three most popular plans offer foreign travel emergency coverage.
- Coverage can’t be canceled (unless you stop paying).
- Coverage rarely changes and generally requires an act of Congress.
Disadvantages of Medicare Supplements
On a month-to-month basis alone, Medicare Supplement Insurance costs more than Medicare Advantage plans. But comparing these two types of coverage this way is short-sighted because it fails to consider the total cost of care.
If you really want to know if a Medicare Supplement plan is a disadvantage for you, you need to consider your current and future use of healthcare services. This is the only way to know if it will cost you more or less than a Medicare Advantage plan.
Other than the monthly premiums, it’s difficult to find a true disadvantage of Medicare Supplement plans.
The Most Popular Plans
Medicare Supplement plans help cover costs Medicare Part A and Part B don’t cover. Plans are sold by private health insurance companies, including AARP/UnitedHealthcare, Aetna Medicare, Humana, Mutual of Omaha, and many others.
There are 10 standard plan types (A through N). Each of the 10 standardized plans covers a different set of out-of-pocket cost benefits. The best way to understand what each plan covers is with the chart above.
The top-selling plans in 2023 are Plan F, Plan G, and Plan N. These are also the best Medigap plans in terms of overall coverage.
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Plan F is the most comprehensive and one of the most popular Medigap plans for 2023. It offers coverage for all of the “gaps” that are not covered in Original Medicare. What makes it the best Medicare plan is its comprehensive coverage.
Plan F covers coinsurance payments for doctor visits and hospital stays, as well as deductibles and copayments. It also covers skilled nursing facility care costs, Part B excess charges, foreign travel emergency care, and blood transfusions.
Due to its coverage, Plan F is the most expensive Medigap policy. Some experts consider it to be overly generous since it covers everything except your Medicare Part A and Part B premiums.
If you are a policyholder who rarely uses your Medicare benefits, then you may want to consider a less costly plan where you might still receive adequate coverage without high monthly premiums.
Overall Plan F is the most comprehensive Medigap policy available. However, depending on your individual needs and financial circumstances, it may not be cost-effective. In the next section, we will discuss another popular medicare supplement plan – Plan G – which provides more limited coverage than Plan F but at a much lower cost.
NOTE: Plan F is available in all but three states. Massachusetts, Minnesota, and Wisconsin do not follow standardized plans. Due to recent changes in Medicare laws, starting January 1, 2020, Plan F will no longer be available to new Medicare beneficiaries. This means that those individuals who were eligible prior to that date may be able to obtain a Plan F policy but those who were not will have to look for an alternative plan. Simply put, an insurance agency can’t sell you this plan if you are turning age 65 this year.
Plan G is the most popular Medicare Supplement plan among new Medicare beneficiaries. It offers high levels of coverage at a cost-effective price.
Those with Plan G are only responsible for the Part B deductible. All remaining costs related to the services outlined by Medicare Parts A and B, including items such as skilled nursing facility care, hospital stays, and medical care coinsurances, are covered by a Plan G policy.
One of the major benefits of this plan is that it covers Part B’s excess charges. Under Part B, a provider may bill up to 15% more than Medicare’s approved amount for a given service. These additional costs are fully covered by Plan G, which gives beneficiaries more options when choosing their healthcare providers.
It is important to take the time to compare Plan G with other plans and research which type of coverage best suits one’s needs and budget. Comparing and contrasting every plan can help you make an informed decision when selecting your optimal insurance plan.
Plan N is another popular Medicare Supplement plan which offers a similar level of coverage as Plan G but tends to have lower premiums. The next section will explore Plan N in detail, overviewing its benefits and limitations so that individuals can get a better idea of whether or not it is the right option for them.
Plan N is one of the most popular Medicare Supplement plans for 2023. This plan covers many comprehensive benefits and can help to offset the financial burden associated with healthcare costs.
Plan N pays 100 percent of Part A coinsurance and hospital costs, up to an additional 365 days after Medicare benefits have been used. It also covers most of the Part B co-insurance costs for routine visits to physicians and other healthcare providers, as well as the Part B deductible.
However, there are some drawbacks to Plan N that should be considered before enrolling. The plan does not cover any Part B excess charges – that is, any extra amount charged by your doctor or other healthcare providers over and above the amount accepted by Medicare.
Additionally, patients enrolled in Plan N must pay a $20 copayment when they visit their doctor. And, there is a $50 copay to use emergency services.
Debates on both sides of these considerations must weigh how much a patient may actually use their Plan N coverage, compared to the cost savings that can be achieved with this particular policy. Ultimately it will depend on how often a person goes to the doctor or require medical attention in order to determine if Plan N is the right choice for them.
Plan N offers a good range of coverage at an affordable price. But everyone’s healthcare needs are different. Carefully consider your use of health services before making a decision. The following section will explore another important aspect of Medicare Supplement policies: the benefits of enrolling in one.
How to Choose the Right Plan
When it comes to Medicare Supplement plans, the primary purpose is to fill in gaps found in Original Medicare coverage. As such, this critical benefit should be thoroughly considered when selecting a plan.
In our experience, the most common question people ask when choosing a plan is, “Which Medicare supplement is the best?”
That’s an excellent great question, but the answer for you may be different than it is for your spouse or friend. There are so many different factors, including:
- Where you live
- Your age
- Your health
- Your finances and financial goals
- Your use of tobacco
Let’s talk about the reasons you might choose one plan over another.
If “Best” = “Most Coverage”
For some people, getting the best plan means getting the maximum amount of coverage. In this case, Medigap Plan F offers the most coverage possible. Plan F covers all the cost gaps in Original Medicare.
Unfortunately, Plan F is no longer available to new seniors. As a result, Plan G is the next best (most coverage) plan available.
If “Best” = “Good Coverage with Some Out-of-Pocket Costs”
Most of us find ourselves on a fixed budget in retirement. And, many of us are healthy or have a chronic condition that’s easily managed through medications.
If this sounds like you, a Plan F or Plan G policy might be wasteful or too expensive. In this case, a Plan N policy is a good option to consider.
In most areas, Plan N costs 20-30% less than Plan G. So, if you are generally healthy, savings really adds up.
The reason Plan N costs less than Plan G is that you pay some of the regular costs. For instance, with Plan N, you pay up to $20 when you see your doctor and up to $50 to use the emergency room.
If you have a chronic condition that you and your primary care physician are managing through medication, without involving a specialist, Plan N could be a cost-saving option for you, as well. It all depends on how frequently you need to see your doctor and whether you pay excess charges to see your doctor(s).
If “Best” = “Lowest Monthly Cost + Risk Protection”
One aspect of Medigap coverage that must be explored is how it compares to Medicare Advantage. To understand the difference, you need to look at total cost versus risk.
With Medigap, you pay most costs in advance (premiums). With a Medicare Advantage plan, you pay most costs when you use healthcare services (copayments).
This fundamental difference fools many people into believing that Medicare Advantage plans cost less. The reality is that the only people who experience lower costs in a Medicare Advantage plan are healthy people who rarely use healthcare services.
So, that brings us to Medigap Plan K.
Like Plan N, with Plan K you share some of the costs (see the comparison chart). But, unlike Plan N, there’s an annual limit on your out-of-pocket costs with Plan K. When you hit the maximum out-of-pocket limit with Plan K, all Medicare Part A and B charges are paid for you at 100% for the remainder of the year.
Generally speaking, everyone enrolled in both Medicare Part A and Part B is eligible for Medicare Supplement insurance. However, there are a couple of caveats.
The first restriction has to do with Medicaid. If you are enrolled in Medicaid in your state, by law, an insurance agent is not allowed to sell you a Medigap policy. Nor do you need one, because Medicaid covers most of your out-of-pocket costs.
The second restriction has to do with disabled Medicare beneficiaries under the age of 65. Federal law does not require insurance companies to issue policies to people under the age of 65, however, some states do.
When and How to Enroll
As stated above, everyone enrolled in both Medicare Part A and Part B is eligible for Medicare Supplement insurance at age 65. However, there is only a six-month window of time when approval is guaranteed. This is your Medigap Open Enrollment Period.
During your Medigap Open Enrollment Period, which begins the first month you are enrolled in both Part A and Part B, you have a guaranteed issue right. This Medigap protection lets you buy any plan from any company you choose.
Once your Medigap Open Enrollment Period ends, Medigap insurance companies are not required to sell you a policy. And, they are allowed to ask you health questions. Based on your health history, your application may be denied, approved, or approved with a six-month waiting period.
To apply for a Medicare Supplement plan, you will need the help of an insurance agent. We recommend calling HealthCompare first. They are a nationwide agency with a broad range of insurance plans, including AARP Medicare, United Healthcare Medicare, Aetna insurance, Blue Cross Blue Shield, Cigna, Wellcare, and many others.
You can reach HealthCompare at 1-855-728-0510 (TTY 711).
When looking for a Medicare Supplement plan, consumers should consider their individual needs and budget. It is important to understand the different types of plans, what benefits are included for each coverage type, and any limitations or restrictions that may apply.
There is no single “right” answer when it comes to selecting a Medicare Supplement plan. Ultimately, you must weigh your healthcare needs and financial resources before deciding which plan best suits your needs. Additionally, it’s important to research carriers to ensure the company and plan chosen offers top quality at an affordable price.
Common Questions About Medigap Plans
Medicare Supplement Plan F and Plan G are nearly identical. Technically, Plan F is better because it offers first-dollar coverage. However, the one cost that Plan G does not cover, the Part B deductible, is often less than the annualized premium difference between the two plans. As a result, Plan G holders generally save a little money. Read Medicare Plan F vs Plan G: Which is Better in 2023? to learn more.
Most retirees have a fixed budget and can't afford to pay that much out of pocket. Without a Medicare supplement, you will not be protected from catastrophic medical costs. For more on this subject, see Are Medicare Supplements Worth It or A Waste of Money??
Medicare Supplement Plan F offers the most comprehensive coverage available. It provides beneficiaries with 100% coverage on all Medicare-covered expenses after Original Medicare pays its share. However, Plan F is no longer available to new Medicare beneficiaries. As a result, Plan G is the best plan available for anyone who qualified for Medicare on or after January 1, 2020. Also, in almost all cases, Plan G premiums, plus the annual Part B deductible, cost less than Plan F policies, making Plan G a better option. Read 9 Medicare Plan G Pros and Cons You Can’t Ignore to learn more.
In general, AARP / UnitedHealthcare (UHC) has the best rating of all Medicare Supplement insurance carriers. They have an A+ rating with A.M. Best, which rates the financial stability of insurance carriers, and a 3.9 out of 5 stars rating with NCQA, which measures member experiences across all Medigap carriers (they are #1). It's also important to note that AARP / UHC has the most stable rate increase history in the industry. Read Get the Rate Increase History for Medigap Plans Before Buying to learn more.