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What to Consider When Choosing a Medigap Policy in 2022


Private insurance companies sell Medicare Supplement (Medigap) plans, which help cover the costs Original Medicare leaves behind. These plans reduce out-of-pocket expenses for beneficiaries and provide several benefits to policyholders.

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When choosing a Medigap policy, it is essential to be informed about your options. An uninformed choice could lead to future financial woes and roadblocks between you and the best coverage for your needs.

In the world of Medicare, it is easy to get lost in jargon, plan pricing, and available benefits. Below, we review what you need to know to make an educated decision when choosing a Medigap policy in 2022.

How Do I Choose a Medigap Policy?

When choosing a Medigap policy, it is crucial to consider your health needs and budget. Once you determine which benefits are most important to you and set your healthcare budget, you can begin the process of choosing a Medigap policy.

Before choosing a Medigap policy, you must first enroll in Original Medicare. Original Medicare consists of Medicare Part A (inpatient/hospital coverage) and Medicare Part B (outpatient/medical coverage). It is also wise to enroll in a Medicare Part D plan, as Original Medicare and Medigap do not include prescription drug coverage.

You will need to disenroll from your Medicare Advantage plan before choosing a Medigap policy. It is not possible to have Medicare Advantage and Medicare Supplement coverage simultaneously. Your opportunities to drop your Medicare Advantage plan include the Medicare Advantage Open Enrollment Period, the Annual Enrollment Period, or a Special Enrollment Period if you are eligible.

Additionally, if you and your spouse both want to enroll in a Medicare Supplement plan, you must sign up separately for your own policies. It is not uncommon for spouses to choose different Medigap plans. The best coverage for your health needs may not be a fit for your spouse.

The good news about Medicare Supplement plans is that they are standardized. Therefore, each plan of the same letter will provide the same benefits, regardless of carrier. Three states offer plans with different naming conventions, but the policies also offer standardized benefits.

Additionally, you can use your Medigap plan anywhere that accepts Original Medicare. You cannot be denied because of your Medicare Supplement plan carrier.The most popular Medicare Supplement plans are Medicare Supplement Plan F, Plan G, and Plan N. These top plans offer the most comprehensive benefits across the U.S.

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Consider Your Health Needs When Choosing a Medigap Policy

Before choosing a Medigap policy, consider your current and future healthcare needs. Since we can’t look into the future and know exactly when an illness may strike, it is essential to review family health history to understand what your health may look like as a senior.

If there is a history of significant health issues like cancer, heart attack, or stroke in your family, it is especially crucial to enroll in a Medigap plan as soon as you are eligible. This way, you are fully insured in an unexpected health event.

You may think basic health coverage is sufficient because you are not currently struggling with any health issues. However, it is better to prepare for health issues rather than leaving them uncovered if they appear later in life.

Without proper coverage, healthcare costs can become financially devastating. Your golden years are a time for relaxing and making memories with your family. A Medigap plan can help you do this by easing the burden of medical bills.

Consider Your Budget Needs When Choosing a Medigap Policy

When choosing a Medigap policy, your top concern is likely the monthly premium price. Multiple factors impact your Medigap premium rate. One of these factors is the letter plan you select. Plans that offer more benefits often have higher premiums than those with fewer benefits.

While Medicare Supplement Plan F and Medicare Supplement Plan G offer the most comprehensive coverage, they also require a higher average Medicare Supplement cost compared to the other plan options. Given this information, consider your budget and health needs to find the right balance.

You will also want to consider whether your state allows Medicare Part B excess charges when choosing a Medigap policy. An excess charge is an additional 15% on top of the Medicare-approved amount for services from medical professionals who do not accept Medicare assignment.

Some plans cover excess charges while others do not. So, if your state allows them, you will want to enroll in a policy that covers these costs.

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Without a Medigap plan, you are responsible for paying the Medicare Part B deductible, 20% of the cost for outpatient services, plus the Part A deductible and coinsurance.

These costs may seem small, but they pile up after just a few visits to the doctor or hospital. Thus, choosing a Medigap policy is crucial for your healthcare coverage.

Medigap plans keep your out-of-pocket costs as low as possible. Once Original Medicare pays its portion, your Medicare Supplement plan will cover its part. Depending on the Medigap plan you enroll in, you could be left paying $0 out-of-pocket for your care.

Lastly, keep in mind that your premiums will gradually increase every year. The pricing method your carrier uses determines premium increases.

How to Enroll After Choosing a Medigap Policy in 2022

When you decide you are ready to choose a Medigap plan, we are here to help select the right coverage 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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Sources:

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  1. Choosing a Medigap Policy, Medicare. Accessed May, 2022.
    https://www.medicare.gov/sites/default/files/2022-03/02110-medigap-guide-health-insurance.pdf

Jagger Esch

Jagger Esch is the Medicare expert for MedicareFAQ and the founder, president, and CEO of Elite Insurance Partners and MedicareFAQ.com. Since the inception of his first company in 2012, he has been dedicated to helping those eligible for Medicare by providing them with resources to educate themselves on all their Medicare options. He is featured in many publications as well as writes regularly for other expert columns regarding Medicare.

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