Medicare Supplement (Medigap) Plans
What is a Medicare Supplement Insurance (Medigap) Policy?
A Medicare Supplement plan (also known as a Medigap plan) is a policy offered by private insurance companies that will pay for some or most of the out-of-pocket costs left by Medicare after they've paid their part. Medicare Supplements have been standardized throughout most of the country with only Massachusetts, Minnesota, and Wisconsin offering Medicare Supplement plans that differ from the standardized plans.
Illinois offers the standardized plans which have names like Plan F, Plan G, or Plan N. While many different companies offer these plans, the benefits are the same regardless of which company you purchase them from.
Medicare Supplement plans offer great protection against unexpected medical costs, but they do not cover prescription drugs. That is handled by Medicare Part D, which most people take in addition to their Medicare Supplement plan.
Like Original Medicare, there are no hospital or provider networks that are required to be used with a standard Medicare Supplement policy. You're allowed to see any provider or go to any hospital that accepts Medicare as payment. Some companies offer Medicare Select plans that feature a lower premium if you agree to choose a network hospital for inpatient hospital stays. With Select plans, you would be responsible for the Part A Deductible if you were admitted as an inpatient to an out-of-network hospital. Most of the plans available are standard plans that offer the advantage of choice and no network limitations.
Which Medicare Supplement Plan is the best?
There is no one-size-fits-all answer to that question, but until recently, Plan F was the most popular because it offered the greatest number of benefits.
Plan F featured little to no out-of-pocket expenses for Medicare recipients as it paid for all deductibles and co-payments left by Medicare. It is uncommon for people with a Plan F to ever receive a bill for a hospital stay or a visit to a healthcare provider.
Congress passed a law a few years ago that eliminated Plan F for anyone enrolling in Medicare after January 1, 2020. If you joined Medicare prior to this date, then you will still be able to purchase a Plan F and if you have a Plan F, it’s not going anywhere. There may be a good reason to consider a switch though.
Medicare recipients that joined after January 1, 2020 may no longer purchase a plan that covers the Part B deductible ($240 in 2024). Plan G offers the exact same benefits as Plan F with the exception of leaving the Part B deductible to the Medicare recipient.
To put it more simply, Medicare recipients with a Plan F would likely see no medical bills for covered expenses where those with a Plan G could expect to pay no more than $240 for covered expenses this calendar year. The Part B deductible resets on January 1st of each year and may change annually when Medicare announces their new numbers.
When should you enroll?
Your Medigap Open Enrollment Period is the 6-month window that starts the month you turn 65. During this time you can purchase any Medicare Supplement (Medigap) plan available in your state without answering questions about your health. After this period ends, if you wish to purchase a Medicare Supplement plan, you will have to go through Medical underwriting which may limit your options and cause you to pay more for your coverage.
I always advise my clients that choose to take a Medicare Supplement plan to do so during their Medigap Open Enrollment period as they will save money by not having limits placed on their choices due to their health history. Many of the carriers I work with will actually accept your application 6 months BEFORE you turn 65, which would allow you to lock in your rate should there be a rate increase after you sign up and before the policy goes into effect.
Many people find it valuable to contact me early when planning for their Medicare Insurance Plan needs in order to better understand their options. I'm happy to sit down with you and review your situation to help you determine when to enroll and what plan will best suit your needs.
A More Personalized Approach
Medicare Supplement plans can feel a bit like Sesame Street trying to teach kids the letters of the alphabet. I want to make sure that you understand everything to help you find the plan that would best meet your needs. I'll be happy to answer any questions you have and review the various policy types offered by all of the companies I work with.
I can meet in-person, via the phone, or even via video-conference with my laptop and your internet-connected computer, smartphone or tablet. Simply fill out the form below and I'll be in touch shortly to schedule a time to review your needs, answer your questions, and hopefully make this all seem easier to understand. Or if you prefer, you can call me directly at 309-696-7933.
Next Up: Part D Prescription Drug Plans
In this next section we'll exam how Part D Prescription Drug plans work to provide you medications a lower cost.