Types of Medigap Plans And Finding The One That’s Right For You

Most people approaching retirement age are unfamiliar with the world of Medicare and Medicare supplement plans – also called “Medigap” plans. It can be hard to figure out how Medicare works, why Medigap plans are so important, and which type of supplemental coverage is best for you. But it doesn’t have to be complicated. You can start your Medicare journey by looking at the kinds of Medigap plans that are available and seeing how each type fits with your budget, goals, and health care needs.

What Are Medigap Plans?

Medicare supplement plans, issued by private insurance companies rather than the federal government, take care of the “gaps” in Original Medicare, paying for care that could otherwise cost you tens or hundreds of thousands of dollars over time. Medicare supplement plans are not stand-alone plans. You can only purchase one alongside Original Medicare Part A and Part B. There are many Medigap plans available, all varying in cost, level of coverage, and area of availability.

Types Of Medicare Supplement Plans

Ten standardized types of Medigap plans are available in most states, each identified by a letter, A through N.

As of January 1, 2020, two types of Medicare supplement plans – C and F— are unavailable for people who first became eligible for Medicare on January 1, 2020 or later. These plans cover the Medicare Part B deductible.

Different Coverages and Different Premiums

Each lettered Medigap plan must provide the same basic set of benefits and coverages no matter which private insurance company offers it. The only difference between lettered plans provided by different insurance companies is price.

Unsurprisingly, you will pay higher premiums for plans that offer more coverage. Some Medigap plans are high deductible, require higher cost-sharing, and cover more medical expenses. Medicare.gov has a handy chart that compares the benefits offered by each type of plan.

The chart displays ten common health care costs and how each Medigap policy covers them. Some of the more significant health care expenses that Medicare supplement plans cover include:

• Twenty percent share of the cost of physician visits
• Twenty percent share of the cost of laboratory tests and other outpatient services
• The deductible for each hospital admission
• Coinsurance costs of hospital stays or stays in skilled nursing facilities

The private insurance companies who offer Medigap plans set their premiums using one of three pricing, or “rating,” systems:

• Community rated: Also called “no-age-rated,” these plans have the same monthly premium regardless of the insured’s age.
• Issue-age rated: These plans, also called “entry-age-rated,” have premiums based on your age when you first purchase your coverage. The younger you are when you sign up, the lower your initial premium will be.
• Attained-age rated: This rating system initially bases your premium on your current age but can rise as you grow older.

How To Pick The Medigap Plan That’s Best For You

As noted earlier, the fundamental factors you should consider when deciding which Medigap plan is right for you are your budget and your current and anticipated care needs. When comparing plans, ask yourself these questions:

• Do I want a plan with basic coverage or more extensive coverage?
• Is there a specific type of out-of-pocket cost I need help with, such as copayments, coinsurance, or deductibles?
• Do I want help with Part B excess charges when I visit doctors who don’t accept Medicare payment terms (assignment)?
• Am I planning on traveling abroad regularly such that I would want coverage when I’m out of the country?
• Do I want a high-deductible Medicare supplement plan?

Contact Every Way Health With Your Medicare Questions

If you have questions about Medicare or need assistance in choosing the Medicare supplemental insurance plan that’s best for you, please get in touch with Every Way Health at 877-460-3943.

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