What is the Best Medicare Supplement?
Use this guide to research the best Medicare Supplemental Insurance for your personal situation. We are all different and have unique needs. What's best for your neighbor may not be what's best for you. We're here to help you find the right Medigap coverage. If you prefer, you can speak directly with a licensed advisor by calling 1-855-266-4865.
Most experts agree that a Medicare supplement plan, combined with a prescription drug plan, is the best coverage you can get. But, before you decide, we encourage you to take advantage of our FREE Medicare Supplement Comparison Service. We provide quotes, rate-increase histories, and financial ratings, so you can compare what really matters.
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Medicare Supplement Insurance Buyer's Guide
Nearly 11 million Medicare beneficiaries use Medicare Supplement insurance to cover the gaps in their traditional Medicare coverage. Also known as Medigap plans, supplemental Medicare policies help pay a portion of the shared costs baked into the original Medicare system. Available in all 50 states, supplements are the popular choice for people who don't want to hassle with copays or restrictions.
Many people getting their Medicare benefits for the first time are unprepared for the costs. In fact, it shocks many people to learn that they are responsible for about 20% of the costs, which, for some people, can add up to thousands of dollars per year. This is exactly why it's so important to consider additional coverage. This is where supplemental Medicare insurance comes in. A Medigap plan helps fill the costly gaps.
If you're about to qualify for your Medicare benefits, congratulations. Now is the time to give careful thought to the additional coverage you need now and as you get old. Here's why. During your initial enrollment period, you have a special guaranteed issue right to buy a Medigap policy. You only have this right for a short period of time. When your right expires, you will need to go through medical underwriting.
Medicare Parts vs. Plans
Before we go any further, let's clear up some often confusing terminology. We're talking about "Parts" vs. "Plans".
Medicare organizes its coverage and programs within four parts (A, B, C, and D). Part A and B are the original Medicare coverage for hospital and medical services. Parts C, also known as Medicare Advantage, and D are private health insurance options managed by Medicare.
That's a lot of moving parts, so here's an easy way to keep things straight. Only original Medicare has "parts". That's your Part A for hospital coverage and Part B for medical. Everything else has "plans", including Medigap plans, Medicare Advantage plans, and prescription drug plans.
Also, you'll hear some people call a "Medigap Plan" a "Medicare Plan". For example, some people will ask about a Medicare Plan F. The actual policy is a Medigap Plan F, but your agent or advisor will understand what you mean. The important thing to remember is that "parts" are what you get from the government and "plans" are what you buy for additional coverage.
What is Medicare Supplement Insurance?
Medicare supplements were approved by the federal government and all 50 states shortly after President Johnson signed H.R. 6675 into law in 1965. This is the Act that enabled the government to provide a hospital insurance program under the Social Security Act with a supplementary health benefits program. And, although Medicare has evolved in many ways since 1965, one fact remains the same. The program remains and 80/20 benefit, where the government covers about 80% of your major medical costs and you cover the other 20%.
From the beginning of the program, Medicare supplement insurance has been the means by which people protected themselves from Medicare's shared costs. With a Medigap plan, people didn't need to worry about the cost of seeing their doctor or the unexpected cost of being admitted to the hospital.
Over the years, as healthcare costs continue to rise, the benefits of gap coverage have increased. Here are the primary advantages of traditional Medicare combined with a supplement:
- Complete freedom to use the healthcare providers you choose.
- No primary care referrals required to see a specialist.
- Nationwide coverage and international coverage.
- Predictable costs on all Medicare-covered services.
- Guaranteed renewability. Your policy can't be canceled or changed due to a change in your health.
- Zero claims paperwork… ever! Medicare supplement insurance carriers receive a bill directly from Medicare. Medicare bills you for costs not covered by your policy.
There are a few things to take into consideration as you consider Medigap coverage:
- You must be enrolled in both Medicare Part A (hospital insurance) and Medicare Part B (medical insurance) to buy a Medicare supplement plan.
- Medigap plans only cover a single person, however, many companies offer a household discount when you and your spouse both have a policy.
- Medigap plans do not cover your prescriptions. You will need to enroll in a Medicare Part D plan for prescription coverage.
- You can buy or cancel your Medicare supplement anytime. After your initial enrollment period ends, there is no specific annual election period, as there is with Medicare Parts C and D.
As you can see, there are very few restrictions and a whole lot of benefits. Let's dig in a little deeper now and go over what plans cover and what they don't.
What Do Medicare Supplement Plans Cover?
The most important thing to understand about Medicare supplement insurance is that it is in lockstep with Medicare. In other words, if Medicare does not cover a specific healthcare service, Medigap can't cover it either.
Medigap plans, as the name implies, are designed to cover the gaps in Medicare coverage, including your deductibles, copays, and co-insurance. These are the shared costs baked into your major medical coverage.
Unlike Medicare Advantage plans, which impose their healthcare provider networks on you, with a Medigap policy you can use any provider in the country that accepts Medicare. This is a significant benefit, not to mention comforting, for anyone who travels outside of their local area.
It's important to reinforce that supplemental Medicare coverage does not cover services not included with original Medicare. This includes prescriptions, dental, vision, hearing, and gym memberships. These are services that Medicare Advantage plans may include.
Medigap Plans – Standardized Medicare Supplements
Now that you understand what's covered and what isn't, let's talk about levels of coverage. Just like you can choose levels of coverage with your car insurance, you can get levels of coverage with your Medicare supplement, too. However, unlike auto insurance, Medigap plans are standardized.
In all but three states, Medigap plans use a letter (A through N) to identify plan coverage. Over the years, some plans have been phased out and are only available to current policyholders. As of 1 January 2020, available plans include A, B, D, G, K, L, M and N. There's also a high deductible version of Plan G that's available.
How Do I Pick a Medicare Supplement Plan?
One of the most common questions we get here at MedicareWire is "What's the best Medicare Supplement plan?" Until January of 2020, the most popular plans were F, G and N. Plan F was phased out and can no longer be purchased, so we're left with Medicare Plan G and Plan N. However, we also feel that Plan K is a good option for people to consider when comparing coverage vs. Medicare Advantage.
The following Medicare Supplement Comparison Chart offers an easy way to compare what each lettered plan offers side-by-side:
As you can see from the chart above, Plan G covers everything except the annual Part B deductible. This is why Medicare Plan F was the #1 choice for many seniors. It covered everything. However, many people have discovered that Medigap Plan G is often a better value than Plan F because the lower annual premium more than makes up for the Part B deductible.
Medicare Supplement Plan Open Enrollment
Do you know when the annual Medicare Supplement Plan Open Enrollment period begins and ends? That's a trick question because there isn't an open enrollment season for Medicare supplements.
Medicare, and the insurance companies, have done such a good job at teaching us all that Medicare open enrollment (i.e., the Annual Election Period) starts 15 October and ends on 7 December that many assume it includes Medicare supplement. Open enrollment is only for prescription drug plans and Medicare Advantage.
However, you do have a one-time Medigap enrollment period that grants you guaranteed issue right. What that means is that insurance companies cannot ask you to answer questions about your health. None. Nada. Zip. That means any pre-existing conditions you might have fly under the radar. However, they can ask you about your use of tobacco products. Everything else is off-limits.
This is why it's so important to take advantage of this one and only open enrollment period. It begins on the first day of your birth month, or the month that you enroll in Medicare Part B, and lasts for six calendar months. If you don't use it you lose it and will need to go through medical underwriting to get a policy.
Unlike your initial Medicare enrollment period, which starts 3 months before the month of your 65th birthday and ends three months after the month of your 65th birthday, your Medicare Supplement open enrollment. In other words, you have a 7-month window with your 65th birthday in the middle.
Medicare Supplement Guaranteed Issue Rights
Guaranteed issue rights (aka, "Medigap protections") are protections granted to you by Medicare that require insurance companies to offer you certain Medigap policies without any restrictions. In these situations, a Medigap insurance company:
- Must sell you a Medigap policy
- Must cover your pre-existing conditions
- Cannot charge you more for a policy based on past or present health conditions
Your guaranteed issue right is only available for a limited period of time. However, in most cases, you have a guaranteed issue right when you have other health coverage that changes in some way. This includes losing other qualifying coverage. Plus, you may have a "trial right" to try a Medicare Advantage plan and still buy a Medigap plan if you change your mind within the trial right period.
You have a guaranteed issue right in these situations:
- Your Medigap policy terminates through no fault of your own (e.g., your Medigap insurance company goes out of business).
- You’re in a Medicare Advantage Plan but the plan decides to end service in your area.
- You have an employer group health or union coverage that pays after Medicare pays and that plan is ending.
- You have Original Medicare and a Medicare SELECT policy and move outside of the policy's service area.
- You joined a Medicare Advantage plan when you were first eligible for Medicare Part A and decide you want to switch back to Original Medicare.
- You canceled a Medigap policy to join a Medicare Advantage plan for the first time, you’ve been in the plan less than a year, and you want to switch back.
- You leave a Medicare Advantage plan or cancel a Medigap policy because the company didn't follow the rules, or it misled you.
As you can see, your guaranteed issue right affords you a big benefit, but those rights are time-sensitive. The guaranteed issue rights outlined above are from federal law. These rights include both Medigap and Medicare SELECT policies. Some states have laws giving additional Medigap rights. To learn more contact your State Health Insurance Assistance Program office.
Medicare Supplement Plans with Medical Underwriting
If you apply for Medigap coverage after your open enrollment period, there's no guarantee that a Medigap insurance company will sell you a policy. Medicare supplement insurance companies are allowed to use medical underwriting to decide whether to accept your application and how much to charge you for your policy.
Medical underwriting is simply a review of your medical history. In addition to using it to determine if they will cover you, and at what rate, some insurers use underwriting to determine whether they will impose a waiting period before coverage starts.
Medical underwriting can be stressful if you don’t know what to expect, so we've assembled some of the commonly asked questions about the process. Underwriting starts when you complete your application. Carriers are free to ask for any information they want, but generally, you can expect questions like:
- Do you have any health conditions on the following list (check all that apply)?
- Do you have surgery or other treatments scheduled?
- What medication do you currently take (or have taken in the past few years)?
Based on your answer to these questions, the insurance carrier may have follow-up questions. If you miss their call, be sure to get back to them promptly. Your application will not proceed until they’ve spoken with you and their questions are answered. As long as your application is complete, you should receive a notification of acceptance or denial within a week after your phone interview.
California, Oregon, Washington State, and Connecticut have exceptions to the medical underwriting rule, so be sure to ask your agent about your options if you live in one of these states.
What is the Best Medicare Supplemental Plan?
Medicare Plan F is currently the Medicare supplement that offers the most coverage. However, if you were not able to enroll in a Plan F policy before the end of 2019, the best coverage you can get is Medicare Plan G. With Plan G, your only out-of-pocket expense is your annual Medicare Part B deductible.
For some people, the best Medicare supplement plan can't be decided by coverage alone. There's also a cost consideration. So let's talk about cost (monthly premium) vs. reward (piece-of-mind). This is really what makes a plan the "best" option for you.
Medicare supplemental insurance, like all other types of insurance, is designed to mitigate your risk. You're trading a monthly premium for convenience and peace-of-mind. The alternative is to self-insure (very risky) or enroll in a Medicare Advantage plan.
Many people try to evaluate Medigap and Medicare Advantage plans based on the monthly premium. This is a mistake because with Medigap you pay most costs up-front, but with Medicare Advantage, you pay most of the costs when you receive services. The only way to truly compare these two types of plans is to look at total costs.
For most people getting their Medicare benefits for the first time, it's best to categorize yourself by choosing the situation that is most like your situation:
- I'm in excellent health (no chronic conditions) and have no family history of health issues.
- I have one or more chronic health conditions and/or my family history includes chronic health conditions.
People in the first situation can afford to take more risks with their insurance coverage. For these people, Medigap Plan N is an affordable alternative to Plan G. With Plan N you make a small copayment when you see your doctor or use emergency services. This plan also does not cover any excess charges from your doctor. This plan works for healthy people because what it doesn't cover (the small copay and excess charges) isn't a big risk if you rarely use medical services.
People in the second situation shouldn't take any more risk with their coverage than their financial situation can afford. Copays can add up very fast. This is particularly true if you are unhealthy and choose a Medicare Advantage plan.
With Medicare Advantage, you pay a copay to see your primary care doctor so you can get a referral to see a specialist. Then you pay a copay when you see the specialist. And if the specialist sends you out for tests or lab work… you guessed it… you pay another copay. Plus, with most plans, you pay a daily copay when you're admitted into the hospital or a skilled nursing facility.
With a Medicare Plan N policy, you can see a specialist without a referral and all lab tests and diagnostics are covered. You only pay a small copay to see the specialist. Even though all Medicare Advantage plans have an annual cap on out-of-pocket costs (up to $6,700), Plan N will still cost less overall.
Let's look at a common, chronic health situation, type 2 diabetes. Some of the possible complications from this disease include:
- Cardiovascular disease.
- Nerve damage (neuropathy).
- Kidney damage (nephropathy).
- Eye damage (retinopathy).
- Foot damage.
- Skin conditions.
- Hearing impairment.
A person with type 2 diabetes can expect one or more of these conditions as they age, requiring many doctor visits, lab tests, and periods of time in the hospital as an inpatient. In this situation, Medicare Plan G is the best option because it covers everything, except your annual Part B deductible. It takes all of your worries away.
If you can't quite afford Plan G, Medicare Plan N is a far better option than Medicare Advantage due to the financial risk. Even in high-cost areas like Southern California, Plan N policies start around $100 to $120 per month. With a $120 premium, your fixed costs are less than $1,500 per year. Factor in two doctor visits per month at $20 each (the copay), $500 for excess charges from specialists, two emergency room visits at $50 each (copay), a three day stay in the hospital, and your total out-of-pocket cost comes to about $2,500. That's a far cry from the $6,700 cap on most Medicare Advantage plans.
It all comes down to knowing you're covered and not having any surprise bills. With a Medigap Plan G or N, you'll pay between $1,200 to $2,400 per year at age 65 (depending on where you live, it could be more), but you'll know you're covered.
If you're super healthy, but can't quite afford $1,200 to $2,400 out of your annual budget, there's another plan to consider. It's Medigap Plan K.
Like Medicare Advantage, Medicare Plan K has an annual out-of-pocket cap. But here's the important part. The cap is less than Medicare Advantage and you get all of the benefits of Medicare supplemental insurance. Primarily freedom of choice and the ability to travel with coverage. Unlike Plan N, which has a $20 copay when you see your doctor, and a $50 copay when you use emergency services, with Plan K you pay 50% and the plan pays 50% across the board until you reach the annual cap.
Here at MedicareWire, we like Medigap Plans G, N and K. We believe these policies are the best Medicare Supplement plans if you want the best coverage, no surprises, no hassle with filing claims, and complete control over your healthcare provider choices.
What is the Average Cost of Supplemental Medicare Insurance?
The cost of Medicare supplement insurance varies significantly by state. Insurance companies create their rates based on the plan, zip code, gender, age, and tobacco usage. In high cost of living states, like California, Florida, and New York, rates on Plan G can easily be double those of lower cost of living states, like Texas and Arizona.
You can compare sample rates using our Medicare Supplement Plan Comparison Tool, or call our toll-free partner hotline at 1-855-266-4865 to speak with a licensed agent.
Find the Right Medicare Supplemental Insurance
At MedicareWire, we're committed to helping you find the best Medicare Supplement for your personal situation. That's why we've partnered with HealthPlanOne to bring you the most options available with a single call. HealthPlanOne is licensed to quote and sell policies from all major insurance companies nationwide. Call the toll-free number with confidence knowing you'll get the best rate on the right plan at no additional cost to you.
Call 1-855-266-4865 to speak with a licensed agent, or, to shop carriers and rates before you call use our Medigap plan comparison tool.
How We Analyzed the Best Medicare Supplement Insurance
Medicare supplement plans and rates are so similar that it can be difficult to choose a plan and an insurance company. We made it easy by creating a Medicare Supplement Comparison Chart and by evaluating insurance carriers at the state level. This is important because many carriers are local, and only a few are national.
FEES, DISCOUNTS AND PERKS
Many insurance companies offer their customers perks, such as a free Silver Sneakers membership and household discounts. So we researched each company to find their fees, discounts, pricing methods, and free perks. Our goal is to help you find the very best value for your money.
To better understand each carrier’s reputation, we looked at complaint data from the Better Business Bureau, the National Association of Insurance Commissioners (NAIC), as well as reviews across popular platforms, like Yelp!. We also decide to build our own review system into the MedicareWire platform in order to give you a voice.
An insurance company’s financial strength helps us predict an insurance company's ability to pay your healthcare your claims. We research every carrier's financial rating using the top financial credit rating agencies in America, A.M. Best and Standard & Poor’s.
This Medicare Supplement Reviews directory is maintained by David Bynon, and was last updated on .