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Choosing a Medigap Plan


When starting Medicare, one of the first things you’ll learn is that Medicare doesn’t cover everything and that you’re going to want a supplemental plan.

The second thing you’ll learn is that you have a choice between Medicare Supplement Insurance and Medicare Advantage. This is where most people get stuck. What’s the difference? [Lots.] Can I have both of them? [No].

But let’s assume you make it past that part and decide on Medicare Supplement (synonymous with Medigap, so I’ll call it “Medigap” from here.) Now there are other choices to make. Which Medigap plan do you take? What company do you buy it from? What are the considerations? Should you get an agent?

Well, let’s talk about it.

Medigap Plan Options

There are generally 8-10 Medigap policies available from most insurance companies in most states. They are denoted by letter, (Plan A, Plan B, Plan C, Plan D, etc).

*Important* Don’t confuse this with Medicare PART A and B. You must have Medicare Parts A and B to get any Medigap plan. This is because Medigap plans fill the gap between what Medicare pays and what you pay. Anyway, I digress…

Each Medigap plan offers a different level of coverage, however, these days, Plans G and N are the most popular.

Medigap Companies

As mentioned earlier, Medigap policies are not government-issued like Medicare Parts A and B - they are sold by private insurance companies. Let’s assume we want Plan G. Since Plan G covers the same procedures and visits no matter what company you buy it from, many people just assume that the best thing to do is to buy the cheapest Plan G on the market. This is a short-sighted move. While price is a consideration when choosing company, you also want to consider the company you’re working with.

- How long have they been around?

- How financially stable are they? Can they pay your claims over the next 20-40 years?

- You may get a cheap rate now, but are they going to raise it by 20% next year? What is their rate increase history like?

- Do they offer fringe benefits like vision discounts and gym memberships?

- What is their reputation with doctors in my area?

All of these questions matter.

To Use An Agent, or Not

While you don’t need an agent to buy a Medigap plan, a local agent can help you for no cost and can save you lots of time in getting these questions answered. So, if you’re a do-it-yourself researcher, you can bury your head in Google for a few days and get all these questions worked out. If you prefer help, it makes perfect sense to hire a trustworthy, knowledgable agent.

Also important to note, as long as you’re relatively healthy, you’re not locked into your Medigap plan/company forever. You can apply with other companies down the road. In some states, like California, you can even switch Medigap plans/companies with no health questions asked around your birthday.

While I’m noting important things, you should also remember that Medigap plans do not come with drug coverage, so you’ll need to purchase a Part D plan separately.

Choosing a Medigap plan isn’t rocket science, but it’s not a walk in the park either. Make sure to get help if you need it. Hopefully you’ll end up enrolling into a quality plan that will serve your needs for years to come.

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