What Is a Medicare Supplement Plan?

Medicare was passed in 1965 and covers the medical costs of millions of Americans. However, these healthcare plans only cover a portion of medical expenses. Shortly after Medicare was passed, private insurers began selling plans to cover the gaps left by Medicare. As such, supplement plans are often called “Medigap Plans.”

An easy analogy is to think of Medicare like a bridge that’s just a bit too short. Sure, you can try to jump from the end of the bridge to land on the other side, but you may not jump far enough, and therefore fall into the water below (having to pay deductibles, copays, etc.). Medigap completes the bridge so you can easily get to the other side.

To continue the analogy, you have to choose the right materials to finish the bridge. There are 10 different medicare supplement plans, each one covering different expenses. If you choose a plan that won’t cover the typical costs you may incur due to your conditions and life situation, you may end up having to make the jump from the bridge more often than you would like. 

For instance, if you travel abroad a lot, you will want to make sure you have a plan that covers foreign travel emergencies. Or if you have a condition that requires blood transfusions, you will want a Medigap plan that covers these expenses.

What Is a Good Medicare Supplement Plan?

Of the 10 Medicare supplement plans, the best one is Plan F. It covers 100% of the expenses you may incur that are at least partially covered by Medicare already. This does NOT include long-term care, dental care, vision care (including glasses/contacts), hearing aids, retail prescription drugs, or private nursing. However, Plan F will be the most expensive you can buy. If you have a lot of doctor’s visits and treatments, Plan F can be well worth the cost.

Plan G is also a very popular Medigap plan. It covers most costs, except for the Medicare Part B deductible. This deductible is $185 a year, as of 2019. Depending on the cost of your Plan G coverage versus Plan F, paying this yearly deductible may actually save you money. 

In more recent years, Plan N has gained a lot of popularity. It was first introduced in 2010 and has lower premiums than Plans F or G. However, you will have copays. Doctor visits require a copay up to $20, and emergency room visits have a copay up to $50. In addition, you will be responsible for any excess charges — that is, costs above Medicare’s rate. If you don’t go to the doctor very often beyond routine check-ups, Plan N can be a great option. 

It’s important to note that Medigap plans are different than Medicare Advantage Plans. Medicare Advantage Plans take the place of Original Medicare. While Original Medicare is administered by the federal government, Medicare Advantage is administered by private insurance companies. It is illegal to sell a Medigap plan to anyone who has a Medicare Advantage Plan unless they are switching back to Original Medicare.

You should also note that Medigap coverages are standardized. So when you’re shopping around for a plan from different insurance companies, you don’t need to worry that they will offer different coverages. As such, if you’re looking for a Medigap plan, consider the following criteria:

  1. Their rates: This will likely be the most important factor you consider. After all, if Plan G coverage costs $150 a month from one company, but only costs $85 from another, you would likely buy from the second company. Be sure to shop around to find the best rates.
  2. Their rate trends: Insurance policies tend to increase every year to keep up with inflation. But some companies will increase their rates by a higher percentage each year than others. Be sure to look at how much prices increase every year for the carriers you’re considering so you know what to expect in the future.
  3. Their financial ratings: This criterion isn’t as important, but you do want to make sure your insurance company is financially stable. If they aren’t, you could suddenly find yourself uninsured if the company goes under. 

It may be difficult to find a lot of this information on your own. In fact, you may struggle with choosing a plan and finding the best rates. We’re here to help. Give us a call at (678) 807-8414 or contact us online to speak with one of our Medigap experts and let us help you Protect What’s Ahead!

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