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Is AARP the Best Medigap Insurance Company?
You're not alone asking this question. But, before you decide, it's important to look at the following factors:
- Do they have the plan you want?
- How often do they raise their rates?
- Are their current rates competitive?
- Do they have a good financial rating?
- What about discounts, fees, and perks?
When it comes to Medigap coverage, these are the most important issues, not necessarily the brand name. So, the first step is to find out if AARP offers plans in your state. We can do all of the analysis work for you. Check out our Free Personalized Medicare Supplement Comparison service.
Medicare Supplements Offered by AARP
Where AARP Offers Medicare Supplements
As the name implies, AARP Medicare Supplement plans supplement Original Medicare coverage by helping with copayments, coinsurance, and deductibles. These are your shared costs that you pay when you use various health services.
A good way to understand your costs is to use the 80/20 rule. Medicare pays an estimated 80% of your major medical costs and you the remaining 20%. A Medicare Supplement from AARP will help you with the copayments, coinsurance, and deductibles, making your costs more manageable.
AARP offers 8 different lettered plans, each with its own pros and cons. The following Medicare Supplement Comparison Chart shows plan benefits side-by-side:
8 Medigap Plans Offered by AARP
|Part A Deductible||No||Yes||Yes||Yes||Yes||50%||75%||Yes|
|Part A Co-insurance||Yes||Yes||Yes||Yes||Yes||Yes||Yes||Yes|
|Part B Deductible||No||No||Yes||Yes||No||No||No||No|
|Part B Co-insurance||Yes||Yes||Yes||Yes||Yes||50%||75%||Yes|
AARP Medigap Plan Coverage Explained
You may not be aware of all of the coverage you get with a Medicare Supplement plan. These are the important benefits:
- Part A Deductible: As of 2020, Medicare's hospital deductible is $1,408 for each benefit period. A new benefit period begins when you are admitted and ends on the 61st day. There is no limit on the number of benefit periods, however each time you are admitted you must pay the deductible before Medicare insurance kicks in.
- Part A Coinsurance: Your Original Medicare benefits cover 100% of all covered hospital expenses for the first 60 days per benefit period. But, on days 61 - 90, there is a $352/per day co-insurance that is covered by some Medicare supplement plans. When you've used 150 days, you'll dip into your 365 lifetime reserve days.
- Part B Deductible: Before your Medicare Part B coverage begins, the annual Part B deductible must be paid. The good news is that some supplements cover this cost for you.
- Part B Coinsurance: Medicare pays about 80% of your doctor costs. A Medigap plan adds to that coverage by paying an additional 20% co-insurance for healthcare services by Medicare-approved physicians and up to 50 percent for mental health services.
- Part B Excess Charges: Not all physicians approved by Medicare accept the approved dollar amounts for covered services. These physicians can charge up to 15% more than the standard amounts, however some Medigap plans cover these excess charges for you.
- Skilled Nursing Facility (SNF) Coinsurance: Medicare Part A covers the cost of a SNF after a qualifying stay in the hospital. For days 1 through 20 you pay nothing. But for days 21 through 100 there's a $175 coinsurance (2020 rate). Some Medigap plans cover some or all of the costs.
- Blood: There are many reasons why you might need blood, including injury, a bleeding disorder, diseases, and surgery. Some plans cover all costs for the first three pints of blood, while others only cover a portion.
- Foreign Travel Emergencies: Some Medigap plans cover emergency care even outside of the United States, so Plans D, F, G, and N are better choices for older adults who like to travel. After the initial $250 is met, Medigap will pay for 80% of emergency care costs, so long as they occur on the first 60 days of the trip. However, these payments are capped at $50,000 per older adult.
- Hospice: For the most part Medicare Part A pays 100% of hospice care costs. However, Medicare does make you pay a copayment of $5 for prescriptions prescribed pain relief, and 5% for respite care for caregivers. Some Medicare supplement plans cover these costs.
What a Medigap Plan Isn't
Still a little fuzzy on what a Medigap policy is and what it covers? Let's clear things up further by explaining what it's not:
- Medicare: Original Medicare coverage has two parts, Part A and Part B. Part A is your coverage for hospital stays and other inpatient services. Part B is covers your doctor and other healthcare provider costs. Under this coverage plan Medicare pays 80% and you pay 20%. Medigap plans work with Original Medicare to cover some or all of your 20% share. They don't replace Original Medicare.
- Medicare Advantage: Medicare Advantage plans replace your Original Medicare benefits with a HMO, PPO, or PFFS plan. Plus, many plans offer additional benefits that Original Medicare does not cover, such as prescription drug coverage, dental, vision, and hearing. But, you cannot have both a Medicare Advantage and a supplement at the same time. They are not compatible.
- Medicare Part D: Medicare Part D plans provide beneficiaries with prescription drug benefits. Regular prescriptions are not covered by Medicare Supplement plans. If you need prescription coverage, Medicare Part D is what you need.
Here is What's Not Covered by a Medicare Supplement from AARP
It is important to understand that a Medigap plan is limited to what Medicare itself covers. Here's a list of the most common services a Medicare supplement from AARP can't cover:
- Long-Term Care: Medicare does not cover long-term care costs, which helps with eating, dressing, toileting, and other daily functions.
- Vision and Dental Care: Medicare covers oral and eye surgery and other treatments associated with a medical condition, but it does not cover routing oral and vision care. For this, you can get a senior dental plan separately. Many dental plans include vision benefits.
- Eyeglasses & Contact Lenses: Eyeglasses and contacts are not covered by any AARP Medicare supplements.
- Hearing Aids: Hearing aids are not a Medicare-covered cost. However, some Medicare Advantage plans include hearing benefits.
- Private Nursing: Medicare covers skilled nursing for recovery purposes after inpatient care, but, private-duty nursing at home is not covered.
- Prescription Drugs: The medications you get as a hospital inpatient are paid through your Medicare Part B benefits, but you regular prescriptions are'nt. For your prescriptions you'll need to compare Medicare Part D plans to find the lowest cost coverage.
How To Choose the Best Medicare Supplement Plan?
It isn't easy to make general recommendations for health insurance because everyone is unique, as are their needs. That said, we can offer some recommendations that will help you categorize yourself:
Ideal Medigap Plan If You Are Healthy
Editor's Choice: Plan N. Medigap Plan N is a recent addition to the standardized plans and is rapidly turning into a crowd favorite. This is especially true with retiring baby boomers coming off of employer group health plans.
One of the reasons that Plan N is growing in popularity is because it goes straight to the core of the most costly gaps in original Medicare, but leaves the minor gaps for the beneficiary. This is why the premiums on this plan are typically much lower than Plan F and G, the two most popular policies.
What makes Plan N an excellent option for healthy seniors that what isn't covered, which includes the Part B Deductible and Excess Charges, typically cost less than what you can save. Said differently, if you do need medical attention two or three times in a year, your out-of-pocket costs will be less than the monthly premiums on a plan that covers these benefits.
Best Plan for Seniors Who Want The Most Coverage Possible
Editor's Choice: Plan G: The only "full coverage" plan is Medicare Plan F, but, Plans F and C are no longer available to beneficiaries turning age 65 after January 1, 2020. That makes Medicare Plan G the new top choice for best overall coverage. That said, I'd choose Plan G anyway. The reason has to do with what isn't covered and what you get because it's not covered.
Both Plan F and C cover the Medicare Part B Deductible, and Plan G does not. As a result, Plan G costs less. In fact, in most cases, it costs less than a Plan F minus the Part B Deductible. I know, it sounds crazy, but it's true. So, why not save a little money?
Best Plan for Seniors Who Can Afford to Take Some Risk
Editor's Choice: Plan K: The headline might seem a bit odd, because who wants to take a risk with their health insurance? But, that's exactly what millions of people do when they enroll in a Medicare Advantage plan. And that's why our top pick in this category is Medicare Plan K.
When you choose a Medicare Advantage plan you are choosing to pay co-pays and/or coinsurance when you use healthcare services. But, did you know that co-pay and coinsurance rates are not standardized? Unlike Original Medicare, however, Medicare Advantage plans have an annual maximum out-of-pocket (MOOP) limit. And, so does Plan K.
Most Medicare plans have a $6,700 MOOP. Plan K has a $5,880 (as of 2020) annual limit. Plus, with Plan K you don't give up your freedom to see the doctors you choose, making it a great alternative.
Best Plan for People with Chronic Health Conditions
Editor's Choice: Plan G: When you have one or more chronic health issues that require you to see your doctor or specialist regularly, your out-of-pocket costs can be considerable. In this situation, Plan G really pays off.
Often times the monthly premium on a Medicare Plan G policy scares people into a Medicare Advantage plan. Then they start getting the co-pay bills from their doctor, ambulance operator, or emergency room.
If you get into a good healthcare system, a Medicare Advantage plan may help coordinate better care, but doctor choice is completely out of your hands. That's a terrible trade-off if you're not getting the quality care you need.
The best way to see if a Plan G policy is your best option is to do the math. How frequently do you see your doctor or specialists? How often do you need to use the emergency room or require transportation by ambulance? How often are you an inpatient? The co-pays with these services add up super fast. It's not difficult to see how a $200, $250, or even a $300 premium on a Plan G policy can save you a lot of money.
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The information on this page is maintained by David Bynon, and was last updated on .