You’ve just reached Medicare eligibility age and you’re about to jump in head first and try to learn about Medigap insurance. Perhaps you’re working with an agent, or maybe you’re attempting to go it alone. Either way know that it’s okay to be slightly (or greatly!) confused with it all.
“Go with Medicare Plan F, it’s the best!” an agent might tell you. Well that might be true in some people’s situations, as well as the agent’s commission, but is it really the best for you or your spouse? And how do you know, ask another agent? It’s no wonder so many people are confused. While there’s no doubt you should compare Medicare Supplement plans and quotes from several carriers before signing on the dotted line, there is a wise method to the madness that can help you greatly in your search.
Available Medigap Plans
You’ve likely read that there are currently 10 different Medigap plans available to purchase, and they are offered by private insurance companies and regulated by Medicare. In other words, while you might be purchasing a Medicare Supplement Plan G policy, you won’t be buying it direct from Medicare. Companies such as AARP (United Health Care), Aflac, and Aetna as well as many more will be the ones issuing your coverage. Not every company will offer every plan letter, and it will vary by state and other factors as to which plan you can get.
- Are you just turning 65 and taking Part B Medicare?
- Did you just retire and are over 65, yet had Part B Medicare for over 6 months?
- Are you moving out of a coverage area and you’re guaranteed issue?
- Would you like to change supplement plans for a lower premium?
These are just a few of the situations that can change what type of plan you are eligible for. As well this might vary by company. Going it alone through this process might not seem like such a great idea anymore. Working with an experienced, independent agent is absolutely the best way to go when it comes time to compare Medicare Supplement plans.
An independent agent means that they have access to several companies in your area (like a broker) and doesn’t sell just one company. There are never any fees to pay the agent, and a good advisor should be able to analyze your situation and match you up with a Medigap plan that not only fits your needs perfectly, but also has one of the lowest monthly premiums. Lowest is not always best with supplement insurance however.
Great, so Which Plan Should I go With?
In general, out of the ten available Medigap plans there are 3-4 plans that are the most popular. These plans are:
- Medicare Plan F
- Medigap Plan G
- Medigap Plan N
You might be asking “What about Plans A,B,D,C,E….etc?” While these plans do exist, not every company offers them other than Plan A, which they all must carry. And due to the unpopularity of these other letters, even if a company does in fact offer the plan it could be very likely that the premium is higher than Plan F, G, or N and offers less coverage. This is because there are not that many people in the group of the plan, and it’s likely resulting in many health claims which pushes premiums up. The more popular plans obviously have more people enrolling, resulting in hopefully a healthier group.
Medicare Supplement Plan F
This plan is in fact the most comprehensive Medigap plan offered, covering 100 percent of the gaps in Medicare both Part A and Part B. Simply pay your monthly premium and visit and doctor in the country that accepts Part B and all Medicare approved expenses will be paid by Medicare and the Plan F. There’s also a foreign travel benefit if you travel outside the United States that pays 80 percent of emergency services after a $250 deductible. Not bad!
As you might have guess, Medicare Plan F does come with the highest price tag although relatively speaking for the amount and type of coverage you’re getting compared to perhaps group insurance that you had with your employer, current premiums today are priced very well depending on which company you choose. Again, this makes using a website such as this incredibly important as you can check rates on Plan F or any plan easily and compare several companies.
Medicare Supplement Plan G
This plan, also very popular, is exactly like Plan F except for one thing.
- You must pay the annual Part B deductible yourself, rather than the plan paying it for you
See before Part B Medicare will pay anything, someone has to pay the Part B annual deductible which hovers around $150 per year. Once this $150 is paid, Medicare will pay 80 percent of all approved medical bills. Medigap Plan F pays this deductible for you, but in reality you’re simply paying it from the result of higher monthly premiums.
With Medigap Plan G, the deductible is paid by you out-of-pocket and then Plan G will pay 100 percent of the bills after Medicare pays. By paying this yourself however, you are rewarded with lower premiums than Plan F each month.
Is Plan G Better Then?
Depending on age, gender, tobacco use, and zip code Plan G just might be a far better choice than Plan F. Enrolling in Medigap Plan G will always be more cost effective than Plan F but some people just like to get no bills. In this case Plan F would be the way to go. But in the example below, you will see why Plan G should always seriously be considered:
John is 75 years old and has a Plan F, and he just got another rate increase and will be paying $185 per month. He then visits MedigapPlansGuide.com and gets quotes on Plan G from the top carriers in his area, only to find out that Plan G premiums are only $132 per month.
$185 – $132 is $53 less per month, or $636 less per year in premiums. Wow, what a savings! Don’t forget though, now that John is on Plan G the only difference is he must pay his own Part B deductible.
$636 minus the $147 Part B deductible is still a whopping $489 per year back in John’s pocket. All the same doctors take his coverage, Plan G pays 100 percent after he meets that deductible, and the only other thing that will change is the logo on his insurance card.
Situations like this happen every day, sometimes with the savings being over $1000 per year especially with couples. Aren’t you capable of writing the check for the Part B deductible yourself? If John stayed with Plan F it would be like him paying his insurance company a $489 service fee for them to pay his $147 deductible for him, with his money that he paid in monthly premiums!
So now you see that it’s absolutely necessary to compare Medicare Supplement plans and rates from several carriers and make sure you don’t overpay for your coverage. So whether it’s a Medicare Plan F or a Plan G that you’re interested in, please use our FREE quoting tool to get rates from the top companies in your area, and make sure you save money with your Medigap insurance!