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The Ultimate Guide for Choosing the Right Medicare Supplement Plan

The Ultimate Guide for Choosing the Right Medicare Supplement Plan

For the majority of our clients, a Medicare Supplement is the perfect way to protect them from the coverage gaps of Medicare. It’s predictable, it’s standardized by the government, and it’s excellent coverage.

But here’s the thing – there are multiple Medicare Supplement plans to choose from, and if you’re a researcher, you might want to know all the nitty-gritty details.

If you’re not interested in all the fine print, just contact us at any time, and we’ll provide you with our best recommendation. No research required.

→ Get a Medicare Supplement Quote

However, if you’re strapped in for the long haul, this is your ultimate guide to everything Medicare Supplement.

Originally published April 3, 2019. Updated October 12, 2020 with additional information and updated Medicare numbers.

What Is a Medicare Supplement?

For starters, a Medicare Supplement is a health insurance plan you can purchase to cover the costs left behind from Medicare. Medicare Supplements are also called Medigap plans – these terms can be used interchangeably.

Medicare covers about 80% of your Medicare-approved medical expenses. A Medicare Supplement can pay for some or all of the remaining 20%.

Here are a few more details about Medicare Supplements:

  • They have no networks – you can see any doctor that accepts Medicare.
  • They are standardized by the government, meaning the coverage is the same year after year.
  • They are guaranteed renewable, meaning you can’t be dropped from the plan as long as you pay your premiums on time.
  • There are a lot of plan options out there, but we have narrowed it down to the three most popular plans – Plan F, Plan G, and Plan N.

When Do I Need a Medicare Supplement?

You can only buy a Medicare Supplement if you’re on Medicare, so let’s start there.

You can first sign up for Medicare during a seven-month window that includes the three months before you turn 65, the month in which you turn 65, and three months after the month you turn 65.

Medicare's enrollment window

As with most things, it’s ideal to sign up for Medicare as soon as you can or within the three months before you turn 65. Once you do that, you’ll be given an “Effective Date” for Medicare Part A and Part B.

Once you have those dates, you can contact us to apply for a Medicare Supplement! Additionally, we can help you sign up for Medicare, so come to us as soon as you wish, and we’ll be prepared to help.

Read more: When do I need to sign up for Medicare and a Medicare Supplement?

The other common scenario is if you’re working past 65 and don’t really need Medicare coverage until you’re off your employer group plan.

In that scenario, you can sign up for Medicare up to three months before your group coverage ends. From there, you have six months after you’ve signed up for Medicare Part B to get a supplement.

If this is confusing, please contact us and we’ll make sure you don’t miss any of the important dates.

Read more: Working Past 65

What Are the Different Medicare Supplement Plans?

There are many different kinds of Medicare Supplements – 11 to be exact. Plans are organized by letters A-N.

Medicare Supplement Benefits Chart

1 Plans F and G also have a high deductible option which require first paying a plan deductible of $(2300) before the plan begins to pay. Once the plan deductible is met, the plan pays 100% of covered services for the rest of the calendar year. High deductible plan G does not cover the Medicare Part B deductible. However, high deductible plans F and G count your payment of the Medicare Part B deductible toward meet ing the plan deductible.
2 Plans K and L pay 100% of covered services for the rest of the calendar year once you meet the out-of-pocket yearly limit.
3 Plan N pays 100% of the Part B coinsurance, except for a copayment of up to $20 for some office visits and up to a $5O copayment for emergency room visits that do not result in an inpatient admission.

Plans F, G, and N

The most popular Medicare Supplements are Plans F, G, and N.

Plan F covers everything Medicare leaves behind (as long as the expense is a Medicare-approved charge). With a Plan F, you don’t have to worry about any bills other than your monthly premium. Because of that total coverage, Plan F is also the most expensive plan.

Plan G covers everything Medicare leaves behind except for the Part B deductible. That deductible is $198 in 2020 and tends to change a little bit each year. Plan G is an economical choice when it comes to cost.

Plan N covers everything Medicare leaves behind except for:

  • Part B deductible
  • Part B excess charges (this only occurs if you see a doctor who does not accept Medicare)
  • Part B copayments (up to $20 for office visits and up to $50 for ER)

If you don’t mind copayments here and there, Plan N can save you some money in premium. It’s the least expensive out of these three options.

How Much Do Medicare Supplements Cost?

Plan F has the highest premium, a Plan G is the most economical choice, and a Plan N is the least expensive. But… how much would the monthly premium actually be?

The short answer is it’s different for everyone. Medigap rates are based on a few things:

  • Zip code
  • Age
  • Gender
  • Tobacco Usage

You could also get a discount called a “household discount” up to 14% if you live with another person. That discount varies by Medicare Supplement carrier, and we take it into account when we run your quote.

Read more: Learn the Lingo: What Is the Medigap Household Discount, and How Do I Get It?

In our experience, a typical monthly premium is around $125, so you can use that as a general guide of what a Medigap plan costs. We know – it's far cheaper than the health insurance you’re used to, we’re sure!

For a 65-year-old, a Plan N is going to be on the lower side, perhaps even below $90 per month, while a Plan F is going to be on the higher side, often around $130. A Plan G is going to fit somewhere in the middle.

Again, your age is a major factor here, so please use these figures as a general estimate and contact us for an exact quote!

→ Get a Medicare Supplement Quote

Related: How Much Does Medigap Plan F Really Cost?: Medigap Plan F Rates Included

Another factor that has to do with the cost of your Medicare Supplement is rate increases. They’re unavoidable, so expect them. However, what’s the meaning behind them, and is there anything you can do about them?

What Are Medicare Supplement Rate Increases?

Rate increases are just a part of what it means to have a Medicare Supplement.

Rate increases happen for a few reasons:

  1. Claims experience, which just means the insurance carrier has had to pay out more than they’re getting, so they raise everyone’s rate
  2. Attained age pricing structure, which means the price of the plan is based on your current age, so it will go up each year on your birthday (Happy Birthday! Sick joke, we know.)

Here’s a quick example of a typical Medicare Supplement age increase scenario:

  • At age 65, you pay $92.63.
  • At age 66, you pay $92.63.
  • At age 67, you pay $92.63.
  • At age 68, you pay $96.74.
  • At age 69, you pay $100.94.

Those are the two biggies – claims and your age. There are a few other factors that can play into it, like inflation, new technology, and admin costs, but that’s the gist.

Related: A peek behind the curtain of Medicare Supplement insurance rates

Can I Do Anything About Rate Increases?

When rate increases happen, you do have a choice – you can shop around for a better premium from a different company. However, you have to be able to pass medical underwriting in order to switch plans.

If you’re not healthy enough to do that, it can be worthwhile to look at an alternative option that doesn’t require you to pass health questions, such as a Medicare Medical Savings Account (MSA).

Here are some more articles on specific health conditions and how they affect your Medigap eligibility:

Why Medicare Supplement Instead of Medicare Advantage?

Medicare Advantage is gaining popularity fast. By the year 2030, experts project that around 50% of the entire marketplace will be Medicare Advantage.

Why then, do the majority of our clients here at Sams/Hockaday have a Medicare Supplement?

It comes down to plan choice and network restrictions.

Medicare Advantage Plan Choice In Decatur vs Chicago

Macon County only has 14 HMO or PPO Medicare Advantage plans for 2021. While that may seem like a lot – and there are more options than ever before – it's nothing like the options you'll find in metropolitan areas.

For example, Chicago has 49 HMO and PPO options for 2021.

When you have more plan choices, you're much more likely to find a plan that offers:

  • A low premium
  • A reasonable deductible
  • A compatible drug list

Medicare Advantage Provider Networks

The second concern for many of our clients is provider networks. Medicare Advantage plans have networks, so you must see doctors and physicians that are in-network, or you'll be subject to out-of-network costs. Some plans won't offer coverage at all if you see an out-of-network physician, unless it's an emergency.

That can be issue right here in Decatur, because your favorite doctor might not accept your plan. However, it's an ever bigger issue for clients who like to travel often, or those who are snowbirds and go to Florida for the wintertime. Medicare Advantage networks are regional, so you can't travel far without being subject to financial risks if you have a medical need.

Long story short: Medicare Supplements are almost always a more competitive, flexible option for clients in central Illinois.

There are always exceptions, so make sure you talk to your agent about your needs, budget, and lifestyle. He or she will help you find the best plan for you, whether it's Medicare Advantage or a Medicare Supplement.

Why Should I Buy a Medicare Supplement From an Insurance Agent?

You’re undoubtedly going to get a truckload of mail, phone calls, emails… everyone under the sun is trying to sell you something! So… what’s the benefit of buying a Medicare Supplement from an agent versus just responding to one of the mailers you get?

To keep this brief, our agents here at Sams/Hockaday represent dozens of carriers, which means we can shop the market for you to find you the best price.

The mailers you get are coming from one carrier, and they usually have big marketing budgets, which means their premiums are on the higher side.

Read more: Will I save money buying Medicare Supplement insurance through the mail?

Long story short, you’re going to overpay if you don’t shop around.

An agent can also do a ton of other great things for you at zero cost:

  • Create a personalized Medicare planner
  • Save you time by educating you and answering your questions
  • Save you money by shopping the market for you
  • Help you switch plans if you need to
  • Assist you with claims if or when the time comes
  • Be your lifelong friend!

Our agents truly love what they do, and a huge part of that is the relationships they make with clients like yourself. (While saving you time and money in the process.)

Read more: 6 Reasons You Should Work With a Medicare Supplement Insurance Agent

Conclusion

To get started, Schedule an Appointment with the agent of your choice right from our website or click on the link in the Medicare Planner image below to request an in-home or in-office Medicare planning session.

Want to learn even more about Medicare Supplements? Here are some related articles:

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