2020 Guide to Medicare Supplement Insurance
On this page, you can compare Medicare supplement plans in your area and learn what Medicare supplement insurance plans cover. Our goal is to help you determine if supplemental Medicare insurance is right for you, and find the right plan at the best cost if it is.
Let's start at the beginning.
What are Medicare Supplement Plans?
Medicare supplement insurance plans provide gap insurance (aka, "Medigap") sold by private insurance carriers, not the government. However, the plans are strictly regulated by state insurance regulators.
NOTE: We use the terms Medigap and Medicare supplement interchangeably. They are the two common names for supplemental Medicare insurance.
A Medicare supplement plan can help you pay some of the costs baked into traditional Medicare (Parts A and B), including your co-payments, coinsurance, and deductibles. In most states, there are 10 lettered plans (A-N). Each lettered plan provides a different level of coverage.
To fully understand supplemental Medicare insurance, and how it protects you from high medical bills, you first need to understand how it works with your Medicare benefits. We find that a simple chart works best to explain Medigap plan coverage.
Medicare Supplement Plans Comparison Chart
The following chart gives a quick look at the benefits provided by each lettered plan (A through N). This is the easiest way to understand what's covered and what isn't.
|Medicare Part A Coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used up||Yes||Yes||Yes||Yes||Yes||Yes||Yes||Yes||Yes||Yes|
|Medicare Part B Coinsurance or Copayment||Yes||Yes||Yes||Yes||Yes||Yes||50%||75%||Yes||Yes**|
|Blood (First 3 Pints)||Yes||Yes||Yes||Yes||Yes||Yes||50%||75%||Yes||Yes|
|Part A Hospice Care Coinsurance or Copayment||Yes||Yes||Yes||Yes||Yes||Yes||50%||75%||Yes||Yes|
|Skilled Nursing Facility Care Coinsurance||No||No||Yes||Yes||Yes||Yes||50%||75%||Yes||Yes|
|Medicare Part A Deductible||No||Yes||Yes||Yes||Yes||Yes||50%||75%||50%||Yes|
|Medicare Part B Deductible||No||No||Yes||No||Yes||No||No||No||No||No|
|Medicare Part B Excess Charges||No||No||No||No||Yes||Yes||No||No||No||No|
|Foreign Travel Emergency (Up to Plan Limits)||No||No||Yes||Yes||Yes||Yes||No||No||Yes||Yes|
|* Medicare Plan F also offers a high-deductible plan. If you choose this option, this means you must pay for Medicare-covered costs up to the deductible amount of $2,240 before your Medigap plan pays anything.|
|** Medicare Plan N pays 100% of the Part B coinsurance, except for a copayment of up to $20 for some office visits and up to $50 copayment for emergency room visits that don't result in an inpatient admission.|
|*** After you meet your out-of-pocket yearly limit and your yearly Part B deductible, the Medigap plan pays 100% of covered services for the rest of the calendar year.|
What Does Medicare Supplement Insurance Cover (the details)?
The chart above gives you a 50,000-foot view of what plans cover. In this section, we'll go into more detail.
There are 11 federally standardized plans available. Each plan is represented by a letter: A, B, C, D, F, G, K, L, M, and N. There's also a high-deductible version of Plan F.
FACT: As of 1 January 2020, Plans F, C, and High Deductible Plan F cannot be sold. These plans cover the Part B deductible, which is no longer an option.
Fast Facts About Medicare Supplement Policies
Each of the standardized plans provides the same basic benefits. In this way, a Plan A policy sold by Humana in San Diego, California will have the same benefits as a Plan A policy from AARP in Tampa, Florida. All Medicare Supplement plans offer the same basic set of coverages, which includes Medicare Parts A and B coinsurance or copayment amounts, blood, and additional hospital benefits not covered by Original Medicare.
In many states, you can purchase a supplement policy called Medicare SELECT. These policies follow the standards of regular Medigap plans. The difference is that the provider requires you to use their network providers, much like a traditional HMO or PPO. The benefit is a significant cost saving on the monthly premium.
Please note that Plans D and G purchased on or after June 1, 2010, have different benefits than the same plans purchased before June 1, 2010. Also, Plans E, H, I, and J were discontinued and can no longer be sold. If you have one of these plans you can keep it or purchase a new policy. The standardized plans do not apply in Massachusetts, Minnesota, and Wisconsin.
Part A Expenses Covered
- Coinsurance for hospital stays: All Medigap plans cover the coinsurance on hospital costs, up to an additional 365 days after your Original Medicare hospital benefits have run out.
- Copayment or coinsurance for hospice care: Medigap plans cover 50 to 100 percent of your copayments and coinsurance for Part A hospice care expenses, depending on the plan option you choose.
- Medicare Part A deductible: Although Plan A does not cover the deductible, the remaining plans cover 50 to 100 percent of this cost.
Part B Expenses Covered
- Copayment or coinsurance: Medicare supplements pay for 50 to 100 percent of your Part B copayment and coinsurance amounts (based on the plan).
- Medicare Part B deductible: Only plans C and F cover the deductible making them the two most popular plans.
- Part B excess charges: When a healthcare provider declines Medicare's "assignment" for a particular procedure or visit, Part B excess charges will be incurred. These excess charges are only covered by Medigap plans F and G.
Foreign Travel Coverage
Medicare provides coverage in the United States and its territories only. For this reason, some of the Medigap plans cover foreign travel emergencies (up to the plan limits). If you travel you may want to consider Plans C, D, F, G, M, and N.
Original Medicare only pays for blood after the third pint. Most hospitals receive blood from subsidized blood banks at no cost. However, in the event a hospital must purchase additional blood for you, then you will be charged. All Medicare supplement plans cover up to 100 percent of the cost for the first three pints of blood.
Skilled Nursing Coverage
Skilled nursing facilities are healthcare facilities providing short- and long-term care for people with critical medical conditions that can't be managed at home. While coinsurance for skilled nursing care is not covered by Plans A or B, all other plans cover 50 to 100 percent of these costs.
Health Services Not Covered By a Medicare Supplement Plan
You now know what a Medigap plan can cover, and it's equally important to learn what they don't cover. This way you won't be surprised. Here are the services people look for most and are often surprised that they are not covered by Original Medicare or Medigap coverage:
- Long-term care (care in a nursing home)
- Private-duty nursing
- Hearing aids
- Vision and corrective lenses
- Routine dental care (including dentures, implants, fillings, cleanings, etc.)
In fact, there are 9 services Medicare doesn’t cover that most seniors need. And, because these services are not covered by Medicare, a Medigap plan can't cover them either.
Are Medicare Supplement Plans Worth it?
Original Medicare offers basic health insurance coverage. For most people, it takes care of about 80 percent of all major medical bills. For the remaining 20 percent, you must pay out of your own pocket or purchase additional insurance. So, let's explore further if supplemental Medicare insurance is worth the cost.
Without a Medigap plan to supplement your basic Medicare coverage, a chronic illness, injury, even a short stay in the hospital, will run your medical bills into the thousands. A critical illness, like cancer or heart disease, could end up costing you your home, cash savings, or both.
Unless you are already poor, the Government will not give you additional assistance to help pay your medical bills, no matter how big they grow. This is why having additional insurance, to fill the gaps created by Medicare, is so important. That's what Medicare supplement insurance does for you. It pays some or all of the major medical bills that Medicare doesn't pay.
How Do Medigap and Medicare Work Together?
Medigap plans are designed to work in lock-step with your Original Medicare benefits. When you supplement your Part A and Part B coverage with a Medigap policy, Medicare pays its portion first and then your own Medigap plan kicks in to pay its share, up to the limits of the policy.
The important thing to understand about Medicare supplement insurance is that if Medicare doesn't cover a service, your Medigap plan can't cover it, either. The one exception to this rule is foreign travel healthcare coverage. Although Medicare does not cover you when you travel, it does allow Medigap plans to offer this coverage.
A Medicare Supplement Protects You From Medical Bills
The whole idea behind supplemental Medicare plans is to protect you from big medical bills due to illness or medical emergencies. For instance, let's say you fell and need to be transported to the emergency room by ambulance and you're admitted into the hospital for your injury. This simple event uses both your Medicare Part A (inpatient) and Medicare Part B (medical) coverage, and each has its own costs and deductibles.
In this instance, you immediately owe the Medicare Part B deductible ($185 in 2019) for the emergency transportation services. In this case, if the ambulance cost is $500, your deductible pays the first $185, Medicare pays 80 percent of the remainder ($252), and you pay the remainder ($63).
In most cases, if you visit the emergency room and are admitted, as the following example shows, your Medicare Part A will cover a portion of the costs. In 2019 you pay:
- $0 coinsurance for each benefit period for days 1-60 spent in the hospital
- $341 coinsurance for days 61-90 in each benefit period
- $682 coinsurance per each “lifetime reserve day” beyond day 90 in each benefit period
- All costs beyond lifetime reserve days
Remember, however, you must first pay your Part A deductible before Medicare pays its portion. In 2019 the Part A deductible is $1,364 per benefit period.
So, as you can see, this one simple incident would end up costing you a minimum of $1,612. If you divide this cost out over 12 months ($134 per month), you're well on your way to covering the cost of a Medigap plan.
Are Medicare Supplements and Supplemental Insurance the Same Thing?
When Medicare supplement policies were first introduced, in the 1990s, they were referred to as Supplemental Medicare Insurance. To help avoid confusion, Medicare adopted the term "Medigap". Therefore, Medigap and Medicare Supplement are interchangeable terms. However, Medigap is not the same as supplemental insurance.
While Medigap is a type of supplemental insurance, it's only available to Medicare beneficiaries. The most common form of supplemental health insurance is available to persons covered by a group health plan through their employer or union. You're probably familiar with the quacking duck TV commercials by AFLAC. That's supplemental disability insurance.
Generally speaking, supplemental health insurance is a policy designed to pay the bills that a health plan does not cover. Supplemental health insurance policies can also cover specific conditions or situations, including dental, vision and critical illness, such as cancer. Long-term care insurance, that pays for nursing home care or home health care is another popular option.
Who is Eligible for Medicare Supplement Insurance?
Supplemental Medicare insurance (aka, "Medigap") is health insurance sold by private insurance companies to cover the "gaps" in Original Medicare. All Medigap policies supplement traditional Medicare coverage, Parts A and B, so you must qualify for Medicare Part A and Medicare Part B in order to be eligible for supplemental coverage. Age is the primary qualifying factor, however, there are also compatibility issues with other types of Medicare insurance.
Medicare Supplement Plans for Disabled Under 65
If you qualify for Medicare benefits due to a disability or End-Stage Renal Disease (ESRD), you may be able to purchase Medicare supplement insurance. It all depends on where you live. Each state has its own board of insurance that regulates the sale of insurance products. Even though Federal law establishes nation-wide Medicare policy, it does not mandate that insurance companies must sell Medigap policies to people under 65. There are 29 states that require insurers to sell policies to people who are eligible for Medicare, regardless of their age:
* Only available to people with ESRD.
** Not available to people with ESRD.
Although the insurance board in your state may not require insurers to sell Medigap policies to people under 65, some insurance companies do. In most cases, due to less competition and higher risk, the cost will be higher and you can be denied coverage for preexisting conditions. Be sure to visit your state's board of insurance web page to review your rights.
Am I Eligible if I have Medicare Part D?
Medicare supplements and Medicare Prescription Drug Plans (Medicare Part D or PDP) are 100% compatible. In fact, the combination of your original Medicare benefits, a Part D plan, and a Medigap Plan G offers the most coverage you can get.
If you join a Medicare Part D plan, and you like the benefits it offers, there is no need to change when you purchase a Medicare supplement policy. There are some Medicare insurance agents that will try to convince you that there are benefits in buying Part D from your Medigap insurer, but this is not the case.
Medicare Supplement vs Advantage Plans
While shopping for a Medicare plan, most people want to know what is the difference between Medicare supplements and Medicare advantage plans. Medicare supplements and Medicare Advantage are very different products, but they both attempt to protect you from the high cost of a chronic illness or being hospitalized. Here are the major differences:
- A Medicare Advantage (MA) plan replaces your Original Medicare coverage with managed care (HMO, PPO, etc). MA plans can include services that traditional Medicare does not cover, such as prescriptions, dental, hearing, and vision.
- Medicare Supplement insurance fills the gaps in your Original Medicare coverage and works in lock-step with it. If you need coverage for prescriptions, dental, vision, or hearing, you must purchase these separately
There is another fundamental difference that you should consider. With a Medicare supplement, you pay most of your costs in advance, even if you don't use any health services. With Medicare Advantage, you pay most of your costs at the point of service. As a result of this fundamental difference, costs with a Medicare supplement are more predictable, and often cost less.
Medicare Advantage and Medicare supplements are not compatible. In rare circumstances, you might be eligible to enroll in a Medicare Advantage Plan and buy a Medigap if you are eligible for "trial rights."
Your trial rights (a 12 month period starting on your birth month) permit you to enroll in a Medicare Advantage Plan for a brief trial period when turn age 65. Should you decide that Medicare Advantage is not to your liking, you can switch back to Original Medicare. Before going back to Original Medicare, you are eligible to apply for a Medigap policy. Your agent will make sure that the effective date of the Medigap policy coincides with the end date of your Medicare Advantage Plan. That way you can avoid a break in your medical coverage.
In most cases, you also have the right to buy a supplemental policy if:
- You move out of your Medicare Advantage plan's service area;
- You leave a Medicare Advantage plan because the company has misled you or broken rules; or
- Your Medicare Advantage plan stops providing services in your area.
In all of these cases, you can purchase any Medigap Plan A, B, C, F, K, or L available by carriers in your state. Don't forget, however, that you are required to switch back to Original Medicare before you can purchase a Medigap policy.
Am I eligible for Medigap if I receive Medicaid?
Medicaid benefits are not the same as Medicare benefits, so having Medicaid does not disqualify you from purchasing a Medigap plan. However, if you qualify for both Medicare and Medicaid (aka, dual-eligible), in most cases there's no reason to have a Medigap plan. In most states, Medicaid covers the gaps in traditional Medicare beneficiaries for those who are dual-eligible.
Can I Change Medicare Supplement Plans Anytime?
Most beneficiaries can change or buy a Medicare supplement plan anytime, but there are consequences if you do not buy a plan when you're first eligible.
The best time to purchase a Medicare supplement is during your individual enrollment period (IEP). During this critical period, you cannot be denied supplemental health insurance for any reason.
Your IEP is a six-month window that begins the first day of the month in which you are 65 or older and enrolled in Medicare Part B. So if you turn 65 on January 3rd but do not enroll in Medicare Part B until February 25th, your IEP will begin on March 1st, which is the first day in which you are age 65 and enrolled in Part B.
CRITICAL: Once your IEP starts it cannot be changed. There are no exceptions.
Some states have an open enrollment period for eligible individuals under the age of 65, and a second enrollment period when they turn 65. Be sure to check with your state's Insurance Department for specifics.
Changing Medicare Supplement Plans
If you enrolled in a Medicare supplement plan when you were initially eligible for Medicare, but now want a different plan to get better coverage or a lower premium, follow these steps:
- Call the insurance company that's selling the plan you want and complete their application.
- If the new carrier accepts your application, call your current insurance company and ask how to end coverage on your current plan.
IMPORTANT: An insurance carrier doesn’t have to accept your application unless you have guaranteed-issue rights.
Why It's Critical To Get Enrolled During Your IEP?
Medicare supplement insurance companies use medical underwriting formulas to decide if they will accept your application and how much they need to charge to cover their risk. However, during your individual enrollment period, health insurance providers cannot turn you away or charge more than the Medicare-approved rate. During this brief period of time, you have guaranteed issue rights. Here are the insurance carrier restrictions during your IEP:
- They can't refuse to sell you any Medigap policy it offers
- They can't charge you a higher premium than they charge others who are 65 and older
- They can't Delay the start of your coverage
What's The Pre-Existing Condition Waiting Period?
An insurance company can't delay the start of your coverage during your IEP, however, in some cases it can make you wait for coverage related to a pre-existing condition. If the insurer has a pre-existing condition waiting period, it has the right to refuse to cover your out-of-pocket costs for any services related to this condition for up to six months. During this period your Original Medicare will provide coverage, but you are required to pay the coinsurance or copayment.
Be aware that the insurer can only delay your coverage if your medical condition was diagnosed and/or treated in the six-month period before your policy starts. Here are a few basic examples of what could be considered a pre-existing medical condition:
|Your health situation||Is this a pre-existing condition?|
|You have a long-term condition, such as diabetes, that you take medication for on a daily basis.||Yes|
|Five months ago, your doctor diagnosed you with hypertension.||Yes|
|Last year you were treated for back pain, but you have not been treated for this condition in the past 10 months.||No|
Can I Get Around The Waiting Period?
Certain pre-existing conditions may allow you to avoid or shorten the waiting periods if you meet these criteria:
- You buy a supplement policy during your IEP, and
- You are replacing creditable health coverage, and
- You've had at least 6 months of continuous prior coverage, and
- You did not have a break in coverage for more than 63 days
If you purchase a policy when you have a guaranteed issue right, the insurance company can't use a pre-existing condition waiting period.
What If I Delay Medicare Part B Enrollment?
For most people, it's best to enroll in Medicare Part B when first eligible. By doing so you will avoid paying a late enrollment penalty.
The exception is when you or your spouse are still working and have group health insurance benefits through your employer or union. When your coverage ends through your employer you can enroll in Part B without a penalty and your six-month individual enrollment period will begin.
In the event that you elect to enroll in Part B while you still have employer coverage, your individual enrollment period starts. Unless you buy a supplemental policy right away — even though you still have coverage through your employer— you will lose your IEP benefits. Every company and union have different rules, so contact your employer or union benefits administrator to get more information.
What If My Individual Enrollment Period Has Passed?
If you apply for a policy after your IEP you are no longer protected by Federal laws, except under certain limited situations. In other words, there's no guarantee your application will be accepted if you don't meet medical underwriting requirements.
How Much Do Medicare Supplement Plans Cost?
For most seniors comparing Medicare supplement plans, the cost is the primary consideration. Monthly premiums for supplemental insurance plans are not regulated, so what you pay is completely dependent on the plan you choose (e.g., Plan A, B, C, etc.) and the insurance company you contract with.
Medicare supplemental insurance companies are allowed to establish premiums. They do so based on actuarial formulas. As a result, plan costs vary. In other words, if you are shopping for a Plan F policy, the same plan from company A may cost less than it does from company B, even though both Plan F policies provide the exact same benefits.
Cheapest Medicare Supplement Plans
There are many factors used to determine the cost of a Medicare supplement. That said, generally speaking, the following plans have the lowest monthly premium while offering good coverage:
- Plan K: Pays a percentage of all Medicare-covered benefits. It's designed to offer a lower premium while providing good coverage on health care services. It has one of the highest out-of-pocket maximums of all supplements, however, it pays 100 percent of all Medicare costs once you hit the annual out-of-pocket limit.
- Plan L: This is a cost-sharing plan. Due to its higher degree of cost-sharing, premiums are usually significantly less than most other plans. This plan is an alternative to consider if you can handle the up-front deductibles.
- Plan N - This is one of the newest plans. It's popular with many seniors because it helps fill gaps in a slightly different way. With a Plan N policy, you may be required to make a copayment of up to $20 for certain office visits and up to $50 for emergency room care that doesn't require you to be admitted.
How Insurance Companies Set Medicare Supplement Prices
Supplement plan prices vary widely because each insurance company decides how it will set the premium amounts for its policies. Here's how insurers rate policies:
- Community-rated: This is also known as "no-age-rated," because regardless of your age the premium is the same. Community-rated premiums increase with inflation and demographic information, but they ignore age.
- Attained-age-rated: These policies are less costly at the beginning but increase automatically as you age. Premiums will also increase with inflation and other risk factors.
- Issue-age-rated: Also known as "entry-age-rated," because your premium rate is based on your age when you purchase the policy. Your premium will be the same as the other seniors your age in your geographic area. Premiums will increase with inflation and other factors, but not due to your age.
As you can now see, it's critical that you ask your Medicare Supplement agent how an insurance company prices its policies. This factor will affect how much you pay both now and in the long term.
As with most other products, health insurance plans are affected by inflation and rising health care costs. Unless you live in a state that regulates rates, like Florida, you should anticipate that your premium will increase each year. That's why it is critical to compare rates each year.
What you pay for a Medicare Supplement may also be determined by your gender, where you live, and these common rate-setting factors:
- Married people who buy two policies
- Those who pay their premiums using electronic funds transfer
- Those who pay their premiums yearly
- Medicare SELECT policies that require you to use specific network providers
- High-deductible option for Plan F
- Uses medical underwriting or bases the premium rate on your medical history if you don't have a guaranteed issue right or are not in your Medigap open enrollment period
Pros and Cons of Medicare Supplement Plans
Approximately 30% of people in traditional Medicare have Medicare supplement insurance. Many people look at the cost and wonder if a supplement is really worth it. The three primary reasons people buy it is:
- Freedom to choose healthcare providers;
- Better coverage on deductibles and coinsurance;
- Coverage while traveling (both in the U.S. and abroad); and
- Easy-to-understand coverage.
Those are the pros, but there are significant cons, too, including:
- A shrinking pool of doctors who accept patients that are not in a network plan;
- No extras; and
- Higher up-front costs.
Many insurance carriers offer Medicare Supplement plans. It's important to shop and compare. Just make sure you're not comparing apples to oranges. In other words, if you're looking for a Plan A, make sure you are getting rate quotes for a Plan A from each company you call. If you are using an independent Medicare agent, they will provide the comparison data you need.
Here's what you should ask about each policy you compare:
- How is the policy priced (community-rating, issue-age-rating, or attained-age-rating)?
- If the policy is attained-age-rated: How often will the premium increase due to my age?
- How much is the premium amount for someone my age (advertised rate may be for an individual who just turned 65)?
- How much has the premium increased over the past five years?
- Do you offer any discounts (non-smoker, married couples, etc.)?
As you would expect, the more coverage the policy offers the more you're going to pay. However, due to the fact insurance companies compete for your business, premiums vary significantly. It pays to shop and compare.
Can I Get My Prescriptions with a Medigap Plan?
You can get prescription drug coverage through Medicare in one of two ways. The most common way is to buy a Medicare Part D Plan (aka, "PDP"). The second way is to enroll in a Medicare Advantage Plan that includes Part D (aka, "MAPD"). All PDPs sold today are 100% compatible with all Medigap supplemental Medicare policies. This is not true in the case of Medicare Advantage plans. You cannot purchase Medicare supplement insurance if you are enrolled in Medicare Advantage.
What Are My Options If I Don't Have Prescription Drug Coverage?
If you have Medicare Part A and Part B and a Medigap plan you have two options:
- Keep your Medicare supplement insurance and purchase the Medicare Part D plan of your choice. Be certain that the PDP you want covers your prescribed medications at a favorable rate; or
- Cancel your Medigap plan and get your coverage through a Medicare Advantage plan that includes Part D (a MA-PD plan). When you enroll in a MA-PD plan you will be automatically disenrolled from Original Medicare (Part A and Part B).
Timing is critical. Unlike your Medigap policy, you can only enroll in Medicare Part D and Medicare Advantage during the Annual Enrollment Period (AEP), which begins 15 October and ends on 7 December (Obamacare does not change Medicare's AEP dates). Even though you join during the open enrollment period, your coverage does not begin until 1 January. The only exception to this rule is when you turn 65. On that year you have an Individual Enrollment Period starting the month before your birthday and ending the month after your birthday.
What If I Have A Medigap Plan With Prescription Drug Coverage?
Some Medicare supplements sold prior to 2006 (Plans H, I, J) have limited prescription drug coverage. These insurance policies are no longer available. If you have a Plan H, I or J with prescription drug coverage, there are two options available to you:
- You can change your Medigap policy to one of the 10 lettered plans currently available and purchase a PDP plan. Before doing so, first, compare the drug coverage your Medigap policy offers with the coverage provided by Medicare Part D plans sold in your state. Don't forget, the new healthcare law will eliminate the coverage gap in a few more years.
- Cancel your Medigap policy and enroll in a MA-PD. This will give you all of your Medicare coverage, Parts A, B, and D, through an HMO or PPO private healthcare plan. When you enroll in Medicare Advantage, you will be disenrolled from Original Medicare.
How Can I Save Money On a Medicare Supplement?
Medicare supplement insurance premiums continue to increase. The increases have a lot to do with changes brought about by the Affordable Care Act (aka, Obama) and how these changes affect reimbursements to health care providers. As a result, a lot of seniors are asking how they can save money on their Medicare supplement.
Medigap policies, as the name implies, cover the gaps in your Original Medicare health insurance. As a general rule, once you have paid your annual Part B deductible, Medicare covers about 80% of the rest of the "reasonable charges". However, that still means that you're on the hook for 20% of copayments and coinsurances. This is where most seniors can save some money. The first thing you'll want to do is to look at the Medicare Supplement Plans Comparison Chart so you can better understand what each plan covers.
Medicare Co-payments and Coinsurance Explained
Co-payments are a fixed fee that you pay for various medical services. For instance, when you see your primary care physician you may have to pay a $20 co-payment, and seeing a specialist may cost $25. These fixed-price fees are predetermined by Medicare based on the type of service.
Although it may sound like the same thing, a coinsurance is another out-of-pocket medical expense, but it is a percentage of the service cost instead of a fixed amount.
Copayments and coinsurances can really add up fast, especially if you see your doctor frequently or have a condition that requires hospitalization. If this sounds like you, then having a Medigap Plan F or a Medigap Plan G might be the best strategy. However, if you are very healthy and rarely see the doctor, you can save a lot of money by taking a little more risk. It all comes down to weighing your out-of-pocket expenses versus your supplemental insurance costs.
The following Medicare Supplement Plan Benefits Chart offers a quick look at the benefits provided by the ten standardized Medigap lettered plans (A through N).
Evaluating Cost Differences
Let's assume that the Medicare-approved amount for a doctor's office visit is $75. In this case, Medicare pays $60 and your portion of the bill, the coinsurance, is $15. In other words, there's a $15 gap that has to be paid.
Medicare supplement insurance, or Medigap if you prefer, lowers your health care costs by covering the copayment and coinsurance gaps in your Original Medicare (Part A Hospital Insurance and Part B Medical Insurance) coverage. Using our example, if you have a policy that covers all of your Part B coinsurance, you will save $15 each time you need to see the doctor.
As you can see, having a policy that offers you full Part B gap coverage won't save you money if you don't use outpatient services regularly. However, if you see your doctor and specialists often, those fees add up fast and your full-coverage Medigap policy is saving you money.
Do the math. If you're paying $200 per month ($2,400 a year) for your Medigap policy but you're only saving $500 a year on copayments, you might want to consider a plan with a little less Part B coverage and a lower monthly premium.
Choose Your Plan Carefully
Saving money on copayments and coinsurance is smart, but you don't want to be penny wise and pound foolish. It's important to fully understand the costs and benefits of your supplemental Medicare policy. The right plan for you depends on your medical needs, expenses, and budget. You don't want to buy more insurance than you can afford. At the same time, you don't want to put your savings or property at risk by not having enough coverage in the event you should become hospitalized or critically ill. That's why it's so important to do your homework and choose wisely.
The Best Medicare Supplement Plans
Choosing the best Medicare supplement has everything to do with understanding your own personal health and financial situation. In other words, how healthy are you and how much can you afford. Like all other forms of insurance, Medicare supplements are designed to mitigate risk.
That said, the following plans offer the best coverage:
- Medicare Plan F: This is the Cadillac of plans because it covers everything allowed, including all Medicare deductibles and copayments. However, this plan will not be available for new enrollment after 1 January 2020.
- Medicare Plan G: Plan G is almost the same as a Plan F. It offers seniors comprehensive coverage and will be the most robust plan available starting January 2020. Unlike Plan F, Plan G requires you to pay the Medicare Part B deductible out-of-pocket.
- Medicare Plan N: This plan has the same overall coverage as Plan G, but you make a $20 copayment when you see your doctor and pay $50 for emergency room care that doesn't require you to be admitted. If you're healthy, this plan offers great savings.
Many seniors getting their Medicare benefits for the first time want to know if Plan G is better than Plan F (or visa versa). It really comes down to overall cost vs. convenience and which is most important to you.
What are the "Medigap Standardized Benefits?"
All Medicare Supplement Insurance policies (aka, "Medigap Plans") are required by law to provide a basic set of coverage benefits. These basic benefits include most Medicare Part A and Medicare Part B coinsurance amounts, blood, and additional hospital benefits not covered by Original Medicare.
- Part A Hospital Coinsurance
- Days 61-90 of a hospital stay in each Medicare benefit period
- Days 91-150 of a hospital stay. Medicare will only pay for these 60 days once during your lifetime
- Additional Part A Hospital Benefits
- An extra 365 days of inpatient hospital care after you use your Original Medicare hospital benefits
- Part B Coinsurance
- Pays for the Part B coinsurance after you meet your annual deductible
- Part A and B Blood Coverage
- Pays for the first three pints of blood per year
- Part A Hospice Coinsurance
- Pays for outpatient prescriptions drug and inpatient respite care coinsurance
How Do I Get a Medigap Plan?
Medigap plans are supplemental insurance policies purchased through insurance carriers licensed in your state. The first step is to shop policies available in your state.
The good news is that Medicare Supplements are standardized using letters A through N. This means that a Medigap Plan A or Plan F sold by one insurance carrier is exactly the same as another. The only difference is the monthly premium.
Be a savvy senior and shop around and review your plan annually to make sure you're still paying a competitive rate.
Where Do I Buy a Medigap Plan?
You can purchase a Medicare supplement policy from a licensed agent or directly from the insurance carrier. An independent agent can help you compare policies from multiple carriers. You can locate agents in your state here.
Best Medicare Supplement Plans Reviews
There are dozens of companies that sell Medicare supplement insurance, so how do you know which company to choose? Rest assured MedicareWire has been reviewing plans and carriers since 2012. Here's a high-level review of our top picks.
AARP Medicare Supplement Plans Review
AARP itself is not an insurance company. However, they have been providing insurance solutions for seniors through their non-profit membership organization for more than 50 years.
AARP's Medicare supplements are underwritten by UnitedHealthcare (UHC), the largest health insurer in the USA. UHC's financial strength, combined with AARP's customer care, make AARP Medicare Supplement Plans the number one choice among seniors nationwide.
In MedicareWire's own analysis, AARP consistently ranks in our top 5 best Medicare Supplement plans in all states. They don't charge a fee to write a policy, their premiums are competitive, they offer a broad range of plans, and in many states, they offer cost-saving Medicare SELECT plans.
If you want full control over your healthcare providers, and you don't want to worry about the co-pays and coinsurance that's not covered by Medicare, an AARP Medicare Supplement Plan might be the right solution.
Call 1-855-266-4865 to speak with a licensed agent contracted with AARP.
United Healthcare Medicare Supplement Plans Review
UnitedHealthcare Medicare Supplements are part of the UnitedHealth Group, a top 10 ranked Fortune 500 company. With annual revenue in excess of $200 billion, UnitedHealthcare is the largest healthcare company in the world and highly trusted as well. Fortune magazine labeled UnitedHealth Group as the “World’s Most Admired Company” in Insurance and Managed Care. With more than 100 million Americans enrolled in a health plan through UnitedHealthcare, they are the undisputed leader.
UnitedHealthcare directly offers Medicare Supplements in most states with seven different plan options to choose from. In most areas their rates are competitive, and it's hard to beat their financial strength. UnitedHealthcare has a AA- financial rating with S&P and an A rating with A.M. Best.
Call 1-855-266-4865 to speak with a licensed agent contracted with UnitedHealthcare.
Humana Medicare Supplement Plans Review
Headquartered in Louisville, Kentucky, Humana was founded in 1961. Today it's one of the largest publicly traded health benefits companies in the United States. The company serves over 14 million medical members and another 7 million specialty members. Over the years the company has received numerous awards for its innovative products and quality service.
Known more for their Medicare Advantage HMO and PPO plans, Humana is one of the largest Medicare Supplement insurers. Although they do not score at the top level in our reviews, because they do not offer as wide a range of plans as other carriers, they do have competitive rates. That's why they made our top 5 best Medicare Supplement plans list.
Call 1-855-266-4865 to speak with a licensed agent contracted with Humana.
Aetna Medicare Supplement Plans Review
Aetna is an American managed health care company. They offer traditional and consumer-directed health insurance and related services, such as medical, pharmaceutical, dental, behavioral health, long-term care, and disability plans. Since November 28, 2018, the company has been a subsidiary of CVS Health.
Aetna Medicare Supplement plans are underwritten through one of their subsidiary companies. Depending on which state you are in you will see either Continental Life of Brentwood Tennessee, American Continental or Aetna Health and Life. All of these companies are owned by Aetna and featured in our plan directory.
Aetna maintains an A rating with A.M. Best. In most states, the company offers plans F, G, and N. Their rates are very competitive on Plans G and N. With all of Aetna’s Medicare supplement plans you get:
- 30 day free look period
- 12-month rate guarantee
- Guaranteed renewable for life
- Freedom to choose doctors
- Portable coverage
- Household discount (where available)
Aetna has made our top 5 best Medicare Supplement plans list every year since 2013.
Call 1-855-266-4865 to speak with a licensed agent contracted with Aetna.
Blue Cross Blue Shield Medicare Supplement Plans (BCBS) Review
It's easy to mistake Blue Cross Blue Shield (BCBS) as one company, but it's not. There are 36 independent and locally operated Blue Cross Blue Shield companies. Combined they deliver health insurance coverage to one in three Americans. Recognized BlueCross and BlueShield brands include Anthem, Regence, Premera, Highmark, CareFirst, Wellmark, Horizon, Excellus, Empire, and Florida Blue. Regardless of their name, all BCBS companies share a single attribute: quality patient care.
Since 1929, when a simple grassroots movement turned into the nation's first health insurance, Blue Cross Blue Shield companies have been at the forefront of healthcare in America. The association is well-known for its healthcare quality, access, and affordability.
Although Medicare Supplement plans are not the core business of the Blues, Medicare beneficiaries are, and the Blues consistently have one of the top ten best rates on all of the plans they offer. Many of the Blues offer Medicare SELECT plans, saving beneficiaries a significant amount on their monthly premiums. These are just a few of the reasons Blue Cross Blue Shield made our top 5 best Medicare Supplement plans list.
Call 1-855-266-4865 to speak with a licensed agent contracted with the Blue Cross Blue Shield company in your area.
Cigna Medicare Supplement Plans Review
Cigna is a Fortune 500 insurance conglomerate with a family of businesses serving over 95 million people. Cigna Medicare supplement insurance is underwritten by several companies, including Cigna Health and Life Insurance Company, American Retirement Life Insurance Company, and Loyal American Life Insurance Company. We feature plans from all three companies in your directory.
Cigna's supplemental Medicare insurance is available in 38 states, however, not all plans are available everywhere due to state regulations. As with all Medicare supplement insurance, coverage varies from plan to plan and location.
Cigna and its other associated brands are rarely price leaders. They have not made our top 5 best Medicare Supplement plans list since 2014.
Call 1-855-266-4865 to speak with a licensed agent contracted with the Cigna.
Mutual of Omaha Medicare Supplement Plans Review
Mutual of Omaha was founded in Nebraska in 1909 under the name Mutual Benefit Health & Accident Association. The company has been in the Medicare business since the beginning days of the federal health program, making Mutual of Omaha the oldest Medicare supplement carrier in existence. Unlike some plans, Mutual of Omaha's Medicare Supplement plans are available to beneficiaries age 65 and older and to those under age 65 with qualifying disabilities. As with all Medicare supplement plans, coverage is regulated by the Federal government and state insurance board.
Rated A+ (Superior) by A.M. Best, Mutual of Omaha is a conglomerate of several companies, with a combined annual revenue in excess of 9 billion dollars, including:
- United of Omaha Life Insurance Company
- United World Life Insurance Company
- Mutual of Omaha Investor Services
Mutual of Omaha Medicare supplement plans are underwritten by Mutual of Omaha Life Insurance Company, United World Life Insurance Company, United of Omaha Life Insurance Company, and Omaha Insurance Company. All of these plans are featured in our directory.
Mutual of Omaha offers the following features:
- No application fee
- Up to 12% household discounts (varies by state)
- Rapid policy issue
- Electronic delivery of temporary ID card when needed
- Nationwide coverage – you can see any provider in the U.S. that accepts Medicare
- Guaranteed Renewable – you cannot be canceled for health conditions or medical usage
- Free-look period of 30 days
All of these features, plus their world-renowned customer service have kept Mutual of Omaha on our top 5 best Medicare Supplement plans list since 2012.
Call 1-855-266-4865 to speak with a licensed agent contracted with Mutual of Omaha.