What is the Best Medicare Supplement Insurance?
We get asked that question every single day, multiple times a day, from people either looking for Medicare supplement insurance for the first time or from people who already have a plan but are experiencing rate increases
It all depends on your unique situation, your tolerance for out-of-pocket costs and several other factors which we will highlight in this article. Although there are popular plans, the best Medicare supplement insurance plan for you may not be the best nor the most popular plan for others.
How to Determine the Best Medicare Supplement Plan for You
First, let’s cover a few very important background points about Medicare and why Medicare supplement insurance plans were created. Knowing this background information will make it easier for you to understand which plan may be the best Medicare supplement insurance plan for you and why.
5 Important Medicare Background Points
- Medicare part A is already paid for if you’ve worked 40 quarters in your lifetime and have contributed to Medicare. Medicare Part A covers your hospitalization, or what you might call in-patient coverage. If you stay the night in a hospital, your Medicare part A is covering those bills. You have a deductible for Medicare Part A ($1,364 in 2019 for each benefit period), and then you are responsible for 20% of your hospitalization medical bills. So, although this is good coverage, just one hospital stay can get pretty expensive in terms of your out-of-pocket costs.
- Medicare part B is an optional benefit, but most people who have Medicare Part A also take Part B. Medicare Part B covers your outpatient medical bills such as your doctor visits, lab work, x-rays, outpatient surgery, some preventive care and more. It pays for the medical services that you receive when you don’t have to be confined overnight in a medical facility. Part B also has an annual deductible ($185 in 2019), and you’re responsible for 20% of most of your medical expenses.
- Regular Medicare Parts A and B (also known as Original Medicare) provide fairly acceptable coverage on their own. However, that 20% that you are responsible for can quickly add up, and that’s why Medicare supplement insurance was created. Medicare supplement insurance covers that 20% you are responsible for, and a few other Medicare-eligible expenses not covered under Parts A and B.
- Medicare supplement insurance is NOT Medicare Advantage. A very common question and point of confusion we hear every day is… Is Medicare supplement insurance the same as Medicare Advantage? The answer is no. They are completely different. Medicare Advantage (also known as Medicare Part C) is essentially outsourced, or privatized Medicare. This means, if you elect to go with one of these plans, you are no longer getting your benefits directly from Medicare. Instead, your plan is administered by the private insurance company you sign up with. If you have a Medicare Advantage plan, then you will not need nor be able to sign up for a Medicare supplement plan. We won’t go into the details of whether you should consider going with Original Medicare or Medicare Advantage plans, but you can watch this video on Medicare Advantage versus Medicare supplement insurance for more information on the pros and cons of choosing one or another.
- Prescription Drug coverage is required if you enroll in Medicare Parts A and B. This drug coverage is known as Medicare Part D. Medicare Part D prescription drug coverage can be purchased from insurance companies. Here is a guide on how to sign up for Medicare Part D drug coverage: How to Get Drug Coverage
Medicare Supplement Plans A-N
Standardized Medicare Supplement Plans Help You Easily Compare Plans: Back in 1990, the Federal Government wanted to make it easier for Medicare shoppers to be able to find and obtain Medicare supplement plans, so they standardized the plans. Here’s what that means: Whether you buy a supplement plan from one insurance company or the same plan from a different insurance company, it doesn’t matter! All of those plan benefits must be exactly alike no matter which company offers it.
Medicare Supplement Comparison Chart
Medicare supplement plans are offered with plan letter designations from Plan A through Plan N. Each of these plans are made up of different, specific benefits.
There really isn’t a need to understand all of the plans in great detail because some of these plans, like Plan A, are for very specific and niche needs. The majority of people typically go with one of three popular Medicare supplement insurance plans that represent the bulk of plans purchased – Plan F, Plan G, and Plan N.
Exact Same Medicare Supplement Plan – Different Pricing
The ONLY thing that varies from insurance company to insurance company in offering identical plans is the pricing! The main reason for this is because each company has different financial needs, and thus prices their plans differently compared to what other companies charge for the exact same plan.
Standardized plans, not pricing: Remember, the plans are standardized, so a Plan F from one company is identical to the same Plan F from another company. The only difference is the price!
What Are the 3 Most Popular Medicare Supplement Insurance Plans?
- Medicare Supplement Plan F: The most popular plan, by far, is Plan F. Just over half of the people that own a Medicare supplement have Plan F. This plan is popular because it is the most comprehensive and covers all of the gaps in Medicare. If you go in for covered medical treatment and have this plan, you should not have to pay anything out of your own pocket for Medicare-eligible expenses. As long as you see a doctor who takes Medicare and the treatment is a Medicare-approved expense, you should be able to walk in, show your cards, receive treatment and go home. You won’t have to pay a co-pay and you should never get a bill. There is a cost for this relatively rich benefit plan, of course, and our agents can shop this plan to find the best quotes for you based on your health situation, location, age and more.
- Medicare Supplement Plan G: Plan G is almost identical to Plan F, with the exception that you will be required to cover the cost of your Medicare Part B deductible ($185 in 2019). In certain circumstances related to finances, this plan may be the best supplement plan for you if you want minimal out-of-pocket expenses, but at a reduced insurance premium cost compared to the Plan F. That’s because the cost for this plan is less than that for Plan F, but with the trade-off of having more out-of-pocket costs for you. For certain financial and healthcare situations, this plan could be the best Medicare supplement insurance plan for you.
- Medicare Supplement Plan N: Plan N is somewhat similar to the other two plans, with the exceptions of not covering your Medicare Part B deductible, Medicare Part B excess charges and requiring some co-payments for office visits and some emergency room visits. This plan may be the best plan for you if there are certain financial situations that favor your ability to cover those additional charges, should they occur. Plan N costs less than the other two plans, but with the trade-off of higher out-of-pocket costs for you in the event that you need Medicare-covered services. In some cases, however, this could work to your advantage and actually be the best plan for you.
Factors to Consider for Finding the Best Medicare Supplement Insurance
- Health: Finding the best Medicare supplement insurance plan for you is very dependent on your health. Depending on your health and recent health history, certain companies and plans may or may not be available for you. Some plans may be better options for you than others based on how much and how often you use health care services. And in certain situations, if you are relatively healthy, your health history may actually benefit you by opening up multiple choices for plans and prices that may not be available for other people who have a different health history.
- Timing: Timing also impacts your Medicare supplement insurance plan choices. At certain times of the year, such as open enrollment or your initial enrollment eligibility period, your health history won’t impact your ability to choose between companies and plans. With Medigap plans, you can choose or change plans at other times of the year, but your health history may play a role in which plans are available and the best options for you.
- Guarantee Issue: In some states, your health history may not impact your ability to choose a plan at all. Some states have Guarantee Issue policies in place. Guarantee Issue means the state requires that insurance companies allow you to obtain a Medicare supplement insurance plan at certain times regardless of your health history. In this situation, the best Medicare supplement insurance plan for you may change whether you are in a state that has Guarantee Issue or not.
- Age: Your age, of course, will impact your health and health coverage. As you age and your health coverage needs change, your Medicare supplement plan type may need to change as well to adjust to your coverage needs. The plan that was best for you at 65 years old may not be the best plan for you at 68 or 70 years old. The “best Medicare supplement insurance plan” for you will change as you age and your health care needs change. The good news is the ability to change plans is possible.
- Location: Your location will also impact which plan is the best Medicare supplement insurance plan for you. Not all insurance companies have plans in all states. Because the availability and pricing vary by insurance company, your ability to have the best plan at the best price is somewhat dependent on the state in which you reside and the companies that participate in Medicare supplement coverage in that state. For example, what you pay for a Plan F with an insurance company in your state may be different than what your sibling pays for the exact same Plan F with the exact same insurance company in a different state.
There are other factors as well – such as whether you use tobacco products, whether you are able to take advantage of certain house-hold discounts and more. However, the above factors will weigh in heavily in terms of which plans may be best for you and your needs.
Best Medicare Supplement Insurance for You? It Depends
So, what’s the best Medicare supplement insurance for you? Now that you have more information about Medicare, Medicare supplement insurance plans and how it all works, you’ll see how difficult a question that is to answer.
The fact is that there are multiple factors that impact which plan or plans may be best for you. It really depends on a variety of factors, including which plan best fits your financial situation, whether you choose to take Original Medicare or not, your health history, your timing for obtaining coverage, whether Guarantee Issue is available to you, your current age, your location and more. So, now that you have more information…
Confused? Worried that this is harder than it looks? Need help?
We truly believe that our educated and friendly agents, who do nothing but evaluate and help our clients find the best Medicare supplement insurance plans 8 hours a day, 5 days a week, 52 weeks a year, are a great source for helping you identify which plans may be best for you. We can take your information, factor in all the above variables plus more, and help identify the top 2 or 3 choices that may be the best Medicare supplement insurance plans for you.
And the best news is our agents do NOT push you toward a plan. Instead, they offer you choices and education so that YOU pick the plan based on a much more complete understanding of how all the above factors influence you.
Give us a call if you have any questions or need more information about your options for finding the best Medicare supplement insurance plan for you. Our number is (800) 310-2550, and we are available from 9am to 5pm CT, Monday through Friday.