What are Medicare Supplement (Medigap) Plans?

One of the most important things to know about Medicare Supplement (Medigap) policies is that there are 10 different standardized plans with varying coverage and price options. It is important to know the difference between the different letter coverages and a Medicare Advocate is a great resource to assist on your Medicare journey.

What is the Starting Cost of Medigap Plans?

Medigap can be a confusing topic to understand- it’s certainly not one of the most common things that people think about when they are getting ready for retirement. Which is bizarre considering the mountain of mail and advertisements one may receive when approaching the age of 65. But you may want to make sure Medigap is on your radar, because this insurance plan could offer some much needed protection as well as major savings in healthcare costs! A popular misconception with these plans is thinking you have “everything covered” but there are still limitations and exclusions within each policy outline (i.e., waiting periods, table rates etc.). You should also know that your coverage will last as long as the premiums are paid, and there are certain scenarios which may affect your eligibility to enroll if you forgo your initial enrollment window. 

The most popular Medicare Supplement plan of all time is Medigap Plan F. You must have turned 65 before 2020 to purchase this plan because it’s only for people who reached age 65 by that date, and will be effective until the end of December 31st 2038-that said, those willing to pay a hefty price can enjoy better coverage than any other plan out there! The cost starts at $150 but can and will vary between insurance carriers for the same coverage. These plans go up as high as $300 based on your age when you bought the policy.

Medigap Plan G has quickly become the most popular plan in America, replacing Plan F. One of the main reasons for this is that as a national average, it covers everything Part F does but also except for the deductible on Medicare Part B (which for 2021 is $203). Since Medicare and Medigap plans do not include drug coverage, you will need to research the 27+ different drug plans to find the right match for the meds you take.

Medigap Plan N, you get the same coverage from Plan G for a lower cost, however, you will be responsible to pay our-patient copays of $20 for doctor visits and $50 for emergency room costs. There is also a potential cost for what are referred to as “part B excess charges”.  Part B Excess charges occur when a doctor overcharges Medicare more than the Medicare-approved amount. … Doctors who do not accept “assignment” may overcharge the Medicare rate for a particular service by a maximum of 15%. 

Medigap High Deductible F and G are the cheapest plans on the market. They offer a $2,370 deductible with premiums starting at just $40 per month depending on your state of residence. 

All the other Medigap plans like D, L and K are rarely competitively priced so you should mainly focus on the popular plans outlined above.

Please Note: Innovative Plan G and Innovative Plan F (both with same benefits as their counterpart but with additional hearing, vision and sometimes acupuncture and chiropractic coverage) are available in CA and a few other states. Their prices are usually comparable to standard F and G.

What can affect the cost of a Medicare Supplement plan?

In addition to your standardized plan, you may have some other factors that can reduce or augment the cost of insurance. Let’s take a look at them below:

There are many variables which could affect how much money is spent on an individual healthcare policy. Here we will go through each variable in detail and what it means for premiums.

Company

Even if you enroll with one of the best Medigap companies, that doesn’t guarantee you will receive the best Medicare Supplement price. Medigap prices even at top insurance providers vary greatly from state to state. Aetna may have the lowest priced plan G in one state but Cigna may have it in another. This is largely due to their actuarial tables and market share.

The more members an insurance provider has in one area, the less risk they carry. When a company has more members, especially if they are younger and healthier, premiums can be significantly lower because they carry less risk that a few clients’ medical claims will outpace the money coming in in the form of monthly premiums. 

Location

Your state can have a major impact on your overall cost. This is mainly due to local regulations that each area has. For example, Connecticut and New York are higher than Texas because CT and NY both contain protections for members who choose or need to switch plans without health reviews – which drives up the costs of these states’ providers as they’re forced to take on more less-healthy people than those located in TX (and most other areas). 

Tobacco use

Tobacco users may need to shell out extra money for their Medigap plans. Tobacco use can lead to less than favorable health conditions. 

Extras and Discounts

Different Medigap companies offer different discounts such as household, new to Medicare and autopay discounts. These can really impact what you end up paying so contact us today for the best one for you!

When is the best time to enroll in Medigap so that I pay less?

Usually the best time is from age 65 to 65 and ½ to enroll in a Medigap plan. More specifically the date you activate part B and 6 months after that is the best time for a no questions asked Medigap application. You cannot be turned down regardless of health. 

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