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How to Choose a Medigap Policy


When the time comes for you to choose a Medigap policy, it’s wise not to take the decision lightly. An uninformed choice could lead to future financial woes and roadblocks from obtaining a better plan for your health needs. In the world of Medicare, it’s easy to get lost in health insurance jargon, plan pricing, and available coverages. We’re here with the information you need to know to make an educated decision when choosing a Medigap policy in 2021.

Things to Consider When Choosing a Medigap Policy in 2021

Before you choose a Medigap policy, you must first enroll in Original Medicare, consisting of Part A (inpatient/hospital coverage) and Part B (outpatient/medical coverage). It’s wise also to have Part D prescription drug coverage, as it isn’t included in Original Medicare or Medigap policies.

If you’re presently enrolled in a Medicare Advantage plan, you’ll need to drop it before choosing your Medigap plan. Medicare Advantage and Medigap (also known as Medicare Supplement) plans are options for additional coverage through private insurance companies.

If you and your spouse both plan to enroll in a Medigap plan, each of you must obtain a separate policy. When you have a Medigap policy, you must pay monthly premiums for both Part B and your Medigap. All plans are subject to renewal.

If you’re eligible for Medicare after 2020, you won’t be eligible to enroll in first-dollar coverage.

Your Health Needs

When choosing a Medigap plan, consider your future health as well as your current health. Your family health history can provide some insight into the future of your health. If there is a history of cancer in your family, it’s especially crucial to enroll in a Medigap plan as soon as you’re eligible.

Without a Medigap plan, you’re responsible for paying the 20% share of outpatient hospital costs left uncovered by Part A. You’ll also need to pick up the 20% share of doctor visit costs left uncovered by Part B.

These leftover costs are the tip of the iceberg of health care benefits provided by Medigap plans. Most Medigap plans cover the majority of the total cost of your first three pints of blood, Part A hospice care coinsurance or copay, and skilled nursing facility care coinsurance.

If you travel internationally, you’ll want a policy that covers foreign emergency travel. Medicare alone doesn’t include this. However, almost all of the Medigap plan options do. The only exceptions are Plan A and Plan B, which offer the most basic benefits.

You might think that basic health coverage is sufficient because you’re not currently struggling with any health issues. Remember that it’s better to prepare for health struggles than to leave them uncovered if they appear later in life.

Without proper coverage, health care costs can set you back financially. Your golden years are a time for making memories with your family. You worked hard and saved up so you can all enjoy life together. A Medigap plan can help you do this, unburdened by seemingly endless medical bills.

Your Budget Needs

One of your top concerns when shopping around for a Medigap policy is likely to be the price. Multiple factors impact your Medigap premium rate. One of these factors is the letter plan you select. The premiums for plans with more coverage are higher than those with less.

If you’re on a fixed income, you might qualify for a Medicare Savings Program. These programs help pay for your Original Medicare and can pair with a Medigap plan for more complete coverage.

While Plan F and Plan G offer the most coverage, they also require higher monthly premiums on average than the other plans. Given this information, consider your budget needs and health needs to help find the right balance in the form of a Medigap plan.

Whether your state allows Part B excess charges will be a consideration to make when choosing a plan. They’re only covered by Plan F, Plan G, and their High Deductible versions. It’s also important to note that just because your state allows excess charges doesn’t mean your doctor will charge them.

Plan K, Plan L, and Plan M involve cost-sharing for certain benefits. Therefore, the monthly premiums for these plans are lower. However, you’ll have more out-of-pocket costs later, mainly in the form of copays and deductibles.

Lastly, keep in mind that your premiums will gradually increase every year. The increases are determined by the pricing method used by the carrier.

Key Takeaways

Considering your current and future health and budget needs when choosing a Medigap plan is a balancing act. More coverage tends to mean higher premiums. Less coverage could potentially leave you paying even higher costs out-of-pocket. Becoming informed about Medigap policies and considering your personal needs is the key to finding the best plan for you.

How to Choose a Medigap Policy in 2021

When you decide you're ready for Medigap coverage, we'll be here to help select the right plan for you. To speak with an agent licensed in your state, call the phone number above. Another way to receive a free, no-obligation Medigap premium rate comparison is to fill out our online rate form. An agent licensed in your state will reach out to you for the information we need to find a Medigap plan to fit your needs.

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Lindsay Engle

Lindsay Engle is the Medicare expert for MedicareFAQ. She has been working in the Medicare industry since 2017. She is featured in many publications as well as writes regularly for other expert columns regarding Medicare. You can also find her over on our Medicare Channel on YouTube as well as contributing to our Medicare Community on Facebook.

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