COMPARE MEDIGAP PLANS
Medigap health plans are basically bookkeeping operations. Unlike Medicare Advantage plans, Medigap plans don’t make any decisions about what to cover. They don’t have networks of health experts or hospitals. All they do is pick up a specified share of your hospital bills that Medicare doesn’t pay, such as Part A or Part B deductibles or co-pays. If Medicare paid for it and you still owe a part of the bill, Medigap will pay it, no questions asked.
Medigap plans come in standardized varieties
In all but three states (Massachusetts, Minnesota, and Wisconsin), Medigap plans are available in 10 standardized benefits packages, which vary according to how much of your expenses they will pick up. The more expenses the plan will pick up, the higher its premium will be.
The most popular plan is F, which pays for pretty much everything Medicare doesn’t, including the 15 percent excess charge that you can be billed by health experts who don’t accept Medicare as payment in full. Here’s a chart of the various kinds of Medigap plans.
You can find a complete list of Medigap carriers in your area on Medicare.gov.
When you put your ZIP code into the search box, you will see a list of which plans are available in your area and which companies sell them. You will see a range of prices for each type of plan, and the names, websites, and other contact information for companies that sell them. But it’s up to you to contact the carriers directly to get their specific pricing information.
There are no ratings for Medigap plans
Consumers are often surprised to find this out because there is plenty of rating information available for Medicare Advantage plans. Basically, there is very little to base Medigap plan ratings on. The benefits of Plan F are the same no matter which company you buy it from.
In almost every case, the companies get information on your Medicare bills straight from Medicare and pay their share automatically. They don’t have networks of health specialists or hospitals.
And the rules for Medigap are not the same everywhere, the way they are for Medicare Advantage. The federal government sets some minimum rules to protect consumers but many states have decided to add additional consumer protections on top of those.
The type of premium pricing method you choose will affect your future costs.
A policy that looks inexpensive when you first buy it at age 65 could end up being the most expensive when you hit 80.
Insurance companies use three different ways of setting premium prices. In some states you may have a choice of only one or two.
Community-rated (also called no-age rated). The same premium is charged to everyone, regardless of age. Medigap experts say these plans are the least expensive over time, though not necessarily when you first purchase them.
Issue-age-rated. The premium is based on your age when you buy the policy. It won’t go up as you age, but will increase due to cost inflation.
Attained-age rated. The premium starts low but goes up as you get older. Over time, this type of policy is the most expensive.
What Is the Best Medigap Plan?
Medigap plans and rates vary considerably by state, even by zip code. So, when you are looking for the best Medigap plan for 2018.
Compare Medigap Plans: Coverage
When you are looking at the prices, note that there are actually 10 different standardized Medigap plans. However, the three most common are Plan F (most comprehensive), Plan G (usually the best “deal”) and Plan N (lower premium, lower coverage). Those are the three Medigap plans that most companies choose to offer. It is crucial to understand these and compare Medigap plans on an “apples to apples” basis.
The first step is deciding where you want to fit in that spectrum of coverage choices. Comparing Plan F and Plan G is very easy to do because there is only one coverage difference – coverage of the Medicare Part B deductible, currently $183/year (for 2018). Plan F pays all the Medicare deductibles and co-pays, whereas Plan G does not cover this Part B deductible but does cover everything else not covered by Medicare. So, if the premium savings on ‘G’, as compared to ‘F’ premiums, are greater than $14/month, you would come out better on ‘G’ than ‘F’.
You may think Plan N is the best Medigap plan for you, and it very well may be if you are in good health with limited specialist visits annually. Plan N is always a lower-premium option, but it does have some cost-sharing (i.e. co-pays).
Aside from the three common plans – Plans F, G and N – there are also other Medigap plans. While these are not commonly offered in most states, it is a good idea to take a look to see if one of those options would also be a good “deal” for you.
When choosing a Medigap plan, always keep in mind that your initial selection is not permanent. You can change plans at any time for any reason, and there is not an annual enrollment period for this type of coverage (only for Medicare Part D). However, it is crucial to understand that you do have to qualify to change plans or companies at a later time.
So, we’ve now established that you need to compare rates on to find the best Medigap plan for your specific situation.
