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Updated onApr. 25, 2022

What Is The Best Medicare Supplement Insurance Plan?

Key Takeaways:
  • Medicare Supplement plans, also known as Medigap, allow you to receive private health insurance benefits outside of Medicare and Medicaid plans.
  • There are 10 supplemental insurance plans to choose from. Supplement plans work alongside Original Medicare, not in place of it.
  • Medicare Supplement plans are designed to reduce your out-of-pocket expenses and keep your health care coverage affordable.
  • Medicare Supplement insurance costs vary and depend on factors like location, plan rating, and the insurance company the plan is offered through.

Original Medicare coverage comes with gaps, which mean that there are expenses that are not covered. Although many people already know that they need to do something about these gaps, knowing which plan they should choose can be overwhelming and confusing.

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This guide will walk you through some of the out-of-pocket costs associated with Original Medicare and will also review the basics of Medicare Supplement insurance (also called Medigap). Then, we will review some of the top insurance companies that provide Medicare Supplement plans.

By the end of this guide, you will be able to confidently determine which Medigap plan is best for you.

What are the Basic Benefits of Medicare Supplemental Insurance Plans?

Having supplemental insurance offers a safety net to help keep these expenses from becoming lifelong, major debt.

Standardized, basic benefits that must be covered to an extent include:

  • Medicare Part A hospice care copayments or coinsurance
  • They allow you to see any doctor or specialist who accepts Medicare without a referral
  • Medicare Part B copayments or coinsurance
  • Cost of the initial 3 pints of blood utilized for a medical procedure

Why Should You Consider Medicare Supplement Plans?

Supplemental insurance plans allow you to receive private health insurance benefits outside of the federally regulated Medicare plans.

Supplemental insurance plans also open up the opportunity for sicker patients to have a larger amount of their medical expenses covered. Unexpected and regular out-of-pocket expenses can add up quickly. Having supplemental insurance offers a safety net to help keep these expenses from becoming lifelong, major debt.

Supplemental insurance plans allow you to receive private health insurance benefits outside of the federally regulated Medicare plans.

All of these out-of-pocket costs are considered to be gaps in Original Medicare. There are two more significant gaps to note:

Original Medicare does not cover prescription drugs
Original Medicare does not provide international coverage except in very limited situations
The last thing to remember about the gaps in Original Medicare is that there is no cap on your spending. This is something that surprises many people. Unlike most insurance that you may have had in the past, there is no out-of-pocket maximum (OOPM) for Original Medicare. This means that you have unlimited exposure to out-of-pocket costs.

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Medicare Supplement Insurance Closes the Gaps

Medicare Supplement insurance closes or reduces these gaps. That is why it is often called Medigap insurance. Medigap policies come with different levels of coverage. Understanding the details of the Medigap plans can help you know how to choose the best Medigap plan for your specific needs.

Now that we know why you should consider Medigap, we will review the various details of eligibility and coverage for these plans.

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Medigap Plan A

Plan A covers:

  • 365 extra hospital days beyond Original Medicare Part A
  • 100% coverage of Part A hospital copayments
  • 100% coverage of Part B coinsurance
  • First 3 pints of blood
  • 100% coverage of Part A hospice care copayments

All other gaps in Original Medicare are left open.

Medigap Plan B

Plan B covers everything that Plan A covers, but also covers 100% of the Part A deductible. All other gaps remain open.

Medigap Plan C

Standardized Plan C covers the following gaps:

  • 365 extra hospital days beyond what Original Medicare covers
  • 100% of Part A hospital copayments
  • 100% of Part B coinsurance
  • First 3 pints of blood
  • 100% of Part A hospice copayments
  • 100% of skilled nursing care copayments
  • 100% of the Part A deductible
  • 100% of the Part B deductible
  • Emergency coverage outside the United States

The only gap left open with Plan C is Part B excess charges. Note that Plan C is no longer available to people who become eligible for Medicare on or after January 1, 2020. If you were eligible before this date, you can still choose Plan C.

Medigap Plan D

Plan D is very similar to Plan C. It closes all coverage gaps except:

  • Part B deductible
  • Part B excess charges

Plan D also covers you when you are outside the United States.

Medigap Plan F

Plan F is the most comprehensive plan available. It covers 100% of all the coverage gaps. It is important to note that Plan F is not available to those who become eligible for Medicare after January 1, 2020. The plan most similar to Plan F is Plan G, which you can enroll in after January 1, 2020.

Medigap Plan G

Plan G is just like Plan F, except that  it does not cover the Part B deductible. With Plan G, you will pay the first $198 (for 2020) in Part B expenses out of pocket. Aside from that, all gaps are 100% covered.

Medigap Plan K

Plan K covers many gaps, but not all are 100% covered. Specifically, Plan K covers:

  • 365 extra hospital days beyond Original Medicare
  • 100% of Part A hospital copayments
  • 50% of Part B coinsurance
  • 50% of the first 3 pints of blood
  • 50% of Part A hospice care copayments
  • 50% of Part A skilled nursing care copayments
  • 50% of Part A deductible
  • $5,880 out-of-pocket maximum for 2020

Plan K does not cover:

  • Part B deductible
  • Part B excess charges
  • Emergency coverage outside the U.S.
Medigap Plan L

Medigap Plan L is just like Plan K, except that it covers 75% of costs instead of 50%:

  • 365 extra hospital days beyond Original Medicare
  • 100% of Part A hospital copays
  • 75% of Part B coinsurance
  • 75% of first 3 pints of blood
  • 75% of Part A hospice copayments
  • 75% of skilled nursing care copayments
  • 75% of Part A deductible
  • $2,940 out-of-pocket maximum

Plan L leaves the same gaps open as Plan K, which include:

  • Part B deductible
  • Part B excess charges
  • Emergency coverage outside the U.S.
Medigap Plan M

Medigap Plan M covers:

  • 365 additional hospital days
  • 100% of Part A hospital copayments
  • 100% of Part B coinsurance
  • First 3 pints of blood
  • 100% of Part A hospice coinsurance
  • 100% of skilled nursing facility care coinsurance
  • 50% of Part A deductible
  • Emergency coverage outside the United States

Plan M does not cover:

  • Part B deductible
  • Part B excess charges
Medigap Plan N

Plan N is unique in that it allows for small copayments, like private health insurance. Specifically, Plan N covers:

  • 365 extra hospital days
  • 100% of Part A hospital copayments
  • Part B coinsurance – you may pay a $20 copay for doctor visits and $50 copay for emergency room visits (this is waived if you are admitted to the hospital)
  • First 3 pints of blood
  • 100% of Part A hospice copayments
  • 100% of skilled nursing care copayments
  • 100% of Part A deductible
  • Emergency coverage outside the U.S.

Plan N does not cover:

  • Part B deductible
  • Part B excess charges

As mentioned earlier, the premiums for Medigap policies are based on the level of coverage for your Plan. Plan F is the most expensive, and Plan A is the least expensive.

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What is the Best Medicare Supplement Plan?

To enroll in Medigap, you must be eligible for, and enrolled in, Original Medicare.

The answer to the question “What is the best Medigap Plan?” can be broken down into two parts:

  • Which Standardized Plan (A through N) best fits your needs and budget?
  • Which private insurance company is a good fit for you?

In other words, you want to pick the benefits that best fit your needs first. From there, you  should look for a company that offers the plans you desire in your specific state, and that also has a high financial strength rating and an attractive price.  When it comes time to deciding which insurance company you should choose, ask yourself:

  • Do they offer the Medigap Plan you want in your state?
  • Are they financially sound?
  • Are their premiums affordable?
  • Have they received good reviews?

To give you an idea of how this works in real life, we will review three of the more popular Medicare Supplement insurance companies: Humana, United Healthcare, and Mutual of Omaha. Each of these three insurance companies is trusted by millions of Americans for Medigap coverage.

Humana Medicare Supplement Insurance

Humana offers a host of extra benefits beyond the standardized benefits. Ranging from vision, hearing, and dental to fitness and nursing line options, Humana’s Medigap plans give you the most options to add a comprehensive wellness package. Humana is financially sound and also ranks in the top 10 list on caring.com.

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United Healthcare Medicare Supplement Insurance

United Healthcare Medigap policies are co-branded with AARP. These are the only Medicare Supplement policies that AARP endorses. United Healthcare AARP Medigap plans are among the most popular.

The reason for this popularity is because they offer a few extras, like fitness memberships and vision discounts. They are also known to have stable premiums. So, your premium won’t rise as fast as it might with some other companies. Also noteworthy is the fact that United Healthcare is strong financially and scores high in the caring.com survey.

Mutual of Omaha

Mutual of Omaha may be the highest reviewed Medigap insurance company. They rank very high on the caring.com survey. Although they do not offer as many extra benefits as Humana and United Healthcare, they are known for their great customer service, helpful use of technology, and affordable premiums. As such, Mutual of Omaha plans can be considered a good value, provided with solid service.

Medicare Supplement Eligibility

To enroll in Medigap, you must be eligible for, and enrolled in, Original MedicareYou cannot have Medigap without also being enrolled in Medicare Part A and B. For Medicare Supplement insurance, this means that you must be:

  • A U.S. citizen, or permanent legal resident, and
  • Age 65 or older

It is important to note that some states will allow you to enroll in Medigap earlier than age 65, but most do not.

When you first become eligible for Medicare, you will enter what is known as your Medigap Open Enrollment Period. This period lasts six months, and it begins when both of these are true:

  • You are age 65 or older, and
  • You are currently enrolled in Medicare Part B

What this means is that your Open Enrollment Period will not begin until you have stopped working if you work beyond age 65. During this Open Enrollment Period, your application cannot be denied, and you cannot pay a higher premium based on pre-existing conditions. This is the best time to enroll in Medigap.

Which Medicare Supplement Plan is Best for You?

Now that you know all about Medigap coverage, you can make smart decisions about your coverage.

If you would still like additional help sorting through all the standardized plans, or want help picking a specific insurance company, it would be wise to connect with a professional. This way, you can work together to find coverage that works for you, and you can even compare quotes on Medicare Supplement plans.