4 Tips for Choosing Medigap Plans

Making the most out of your Medigap plan requires knowing which option works for you. Here are tips for choosing Medigap plans for beginners.

Medigap, also known as Medicare Supplement Insurance, is health insurance coverage that’s provided by private companies. It’s meant to pay for costs that Original Medicare doesn’t cover. Around one-third of Medicare beneficiaries are covered under Medigap.

Depending on which of the Medigap plans you get, these covered costs might include deductibles, coinsurance, and copayments. They can sometimes even cover services that aren’t covered under Original Medicare (Part A and Part B), such as travel outside of the United States. 

Many seniors underestimate how much they’ll be spending on health care in retirement. So it makes sense why retirees with fixed income look to Medigap in order to help them manage their out-of-pocket health care expenses. 

Because there are several different options out there when it comes to Medigap plans, it’s important that you pick the one that’s best for you. Continue reading and we’ll walk you through the top tips that you need to know about when deciding on a Medigap plan.

1. Know What Medigap Plans Cover

All Medigap plans offer a package of basic benefits. These include:

  • Part A hospital coinsurance
  • Part A hospice coinsurance
  • Part B coinsurance and/or copayments
  • First three pints of blood

In addition to these basic benefits, Medigap plans add in some combination of coverage for Part A and Part B deductibles. They also cover Part A skilled nursing facility coinsurance, Part B excess charges, and foreign travel emergencies.

The most basic and inexpensive Medigap plan is Plan A. The most comprehensive ones are Plans C, F, and G.

If an insurance company in your state wants to sell Medigap plans, they have to offer Plan A and either Plan F or Plan C, at least. Insurance companies who sell Medigap plans don’t have to offer all ten plans. 

2. Consider Your Health Care Needs

One useful way to evaluate your Medicare Supplement Insurance options is to go over your current and anticipated health care needs. While it’s impossible to predict the future, your family history can provide you with clues about your health as you phase into retirement.

Also, personal habits, such as tobacco and alcohol use, exercise patterns, and diet can also contribute to your future health care needs. If you believe that you’ll need a lot of medical care as you get older, then a comprehensive Medigap plan – such as Plan G or Plan F – might be a good choice. 

3. Consider Your Finances 

Your financial situation is going to play a big part in which Medigap policy is best for you. Many people who are over the age of 65 receive fixed incomes and need predictable medical costs every month in order to keep their budgets balanced. While the plans that are more comprehensive tend to have higher monthly premiums, they’re also going to provide beneficiaries with lower levels of out-of-pocket health care costs.

If you’re a fairly healthy person, on the other hand, and you only want protection against catastrophic health scenarios, then you may want to go with a lower-premium basic plan. These plans cover unexpected emergency care and can provide you with the right balance of benefits and premiums. A plan that’s less comprehensive might also be more sensible if you have more disposable income in retirement and you can afford to pay most out-of-pocket health care costs with Medicare.

Your lifestyle choices are also going to play a big part in choosing the appropriate Medigap policy. If you intend to do a lot of international traveling during your retirement, then you should know that Original Medicare usually doesn’t cover any medical costs that take place out of the country.

There are six Medigap plans that cover eighty percent of your emergency medical costs when you travel to a foreign country, up to the plan’s limits. 

Lastly, you should buy coverage that you intend to benefit from many years down the road. There aren’t any guaranteed issue rights for Medigap policies outside your Open Enrollment Period. So if you purchase a low-cost Plan A today, then you might not be able to upgrade your coverage in later years.

You need to think about how your health might change and if you’d be better off going with a more comprehensive plan. 

4. Know the Costs

The benefits for all Medigap plans are standardized by the federal government. That means that plans of the same letter are going to offer the same basic benefits, no matter what. After you’ve figured out which plan is best for you, you can then shop around in order to find the insurer who’s going to offer you the best price. 

It’s important to note that Congress passed a law recently that states that plans that cover your Part B deductible will no longer be available in 2020. Plan C and Plan F will also discontinue this benefit. 

This makes Plan G, which doesn’t cover the Part B deductible, the most comprehensive Medigap plan available. 

The Importance of Knowing How to Choose Medigap Plans 

As we get older, it only becomes more important that we focus on our health as well as our health care. By following the tips above for choosing Medigap plans, you’ll be able to find the plan that best fits your lifestyle and financial situation. 

Are you curious about specific Medigap plans? Not sure which one is right for you? Contact us today and let us help you figure out the best plan for your situation! 

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