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Medigap Plans: How to Choose the Right One

Feb 18, 2020 3 min read Ben Gran

Signing up for Medicare is often a moment of relief and a reward for a career of hard work, but Medicare doesn't cover 100% of your health care costs. Most people with Medicare will still need to pay some out-of-pocket costs like deductibles, copays or for certain services that aren't covered by their standard Medicare insurance. That's why people often choose to buy Medigap plans, also known as Medicare Supplement Insurance, to help cover these costs.

Some plans will have higher deductibles, lower premiums or certain services that aren't covered. Think carefully about which benefits of the plan are most important to you so you can make the best choice to fit your needs. Here are a few key points to remember when considering Medigap coverage.



Understand the different Medigap plans and benefits

There are 10 different Medigap plans, labeled with different letters: Medigap A, B, C, D, F, G, K, L, M and N. (As of Jan. 1, 2020, Medigap C and F are no longer available for those newly eligible for Medicare, but anyone already enrolled in those policies can keep using them.) Don't confuse Medigap A, B, C and D with Medicare Part A, Part B, Part C and Part D: same letters, different plans.

All Medigap policies cover the same basic benefits (such as coinsurance for Medicare Part A and Part B), but some plans provide different levels of coverage and offer additional benefits.

Most will cover your Part A deductible and your coinsurance for hospice care under Medicare Part A. Some will cover coinsurance for skilled nursing facility care and emergency medical care during foreign travel (up to a certain limit). Some plans have higher or lower out-of-pocket limits on your total annual spending. And some cover 100% of a certain benefit, while others only cover a partial amount of that benefit.

To see a full list of Medigap policies and details of the benefits they cover, visit Medicare.gov.


Plans vary by state

Medigap coverage is standardized by federal and state law, but the exact plans you can get, and the exact prices you'll pay, depend on the state where you live. Massachusetts, Minnesota and Wisconsin also have their own unique Medigap offerings that are slightly different from other states’.

To find plans and price ranges in your area, visit Medicare.gov and enter your ZIP code. This will take you to a list of plans with state-specific premium price ranges and details on benefits offered by insurance companies in your state. You can sort the list by monthly premiums (low to high) or by total yearly estimated costs, and the website gives you a quick explanation of plan benefits so you can see which costs are covered.

Once you find the plan you want, you'll need to contact the insurance company directly to enroll in Medigap coverage. Your exact monthly premium will depend on a few factors.


Medigap vs. Medicare Advantage

Sometimes people wonder if Medigap is the same as Medicare Advantage (also known as Medicare Part C). But these are two different types of coverage.

Medicare Advantage (Part C) is a form of private health insurance that contracts with Medicare. Part C plans are supposed to provide all of your Part A and Part B benefits, and some also offer prescription drug coverage.

So if you have a Medicare Advantage plan, you should not buy a Medigap policy. In fact, it's illegal for anyone to sell you a Medigap policy if you already have Medicare Advantage.

That said, depending on where you live and what your overall preferences and goals are for your coverage, Medicare Advantage might not be the best choice for you. Look at the plan details and read the fine print. You might be better off with Original Medicare and Medigap.


When to buy Medigap coverage

The best time to purchase Medigap coverage is when you first become eligible for Medicare, during your six-month Medigap open enrollment period. If you wait beyond this enrollment window, you might not be able to get Medigap coverage, or you might have to pay a higher premium or have coverage excluded for certain preexisting conditions.




Ben Gran is a freelance writer based in Des Moines, Iowa. He writes about personal finance, public policy, financial services, technology, and business.


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