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How to choose the best Medigap plan for you

Summary: Different Medigap plans cover different Medicare Part A and Part B out-of-pocket costs. The more comprehensive plans may have higher premiums.

Most seniors underestimate their health care spending in retirement. According to the Retiree Health Care Cost Estimate by Fidelity, a couple retiring in 2019 will spend $285,000 on medical expenses. Over 80% of those costs are due to Medicare premiums, deductibles, and cost-sharing amounts. It’s no wonder that retirees on fixed incomes look to Medigap to help manage their out-of-pocket health care costs.

There are currently ten Medicare Supplement Insurance Plans on the market, each offering a different level of protection against unpredictable health care spending. Choosing a Medigap policy that works for your budget is a matter of balancing premium costs, coverage, and your health care needs.

What do Medigap plans cover?

All Medicare Supplement Insurance plans offer a package of basic benefits, including:

  • Part A hospital coinsurance (100%) plus an extra 365 days of benefits when Part A is exhausted
  • Part A hospice coinsurance (100% except for plans K and L which pay 50% and 75% respectively)
  • Part B coinsurance and/or copayments (100% except for plans K and L which pay 50% and 75% respectively)
  • First three pints of blood (100% except for plans K and L which pay 50% and 75% respectively)

In addition to the basic benefits, plans add in some combination of coverage for Part A and Part B deductibles, Part B excess charges, Part A skilled nursing facility coinsurance, and coverage for foreign travel emergencies.

Plan A is the most basic and inexpensive Medigap plan, while Plans C, F, and G are the most comprehensive. If an insurance company wants to sell Medigap plans in your state, it must offer Plan A and either Plan C or Plan F at a minimum. Insurers who sell Medicare Supplement Insurance Plans do not have to offer all 10 plans.

What are the steps for choosing a Medicare supplement insurance policy?

A good way to evaluate your Medigap options start with your current and anticipated health care needs. Of course, it’s impossible to predict the future, but your family history may offer clues about your health status in retirement. Personal habits such as alcohol and tobacco use, diet, and exercise patterns may also contribute to your future health care needs. If you think you will need a significant amount of medical care in your senior years, a comprehensive Medigap plan—such as plan F or Plan G—may be a good choice

How do my finances play a roll in deciding my Medicare Supplement insurance policy?

Your financial situation also plays a major role in choosing a Medigap policy. Many people over 65 are on fixed incomes and need predictable medical expenses each month to keep their budgets in balance. While the more comprehensive plans generally have higher monthly premiums, they do guarantee a low level of out-of-pocket health care costs.

On the other hand, if you are generally healthy and only want protection against catastrophic health events, a lower-premium basic plan that covers unexpected emergency care may offer the right balance of premiums and benefits. A less comprehensive plan may also make sense if you have more disposable income in retirement and can afford most routine out-of-pocket health care expenses with Medicare.

Lifestyle choices may also play a role in choosing a Medigap policy. If you plan to travel outside the U.S. in retirement, Original Medicare (Part A and Part B) generally doesn’t cover any medical expenses you incur on foreign travel. There are six Medicare Supplement Insurance Plans that cover 80% of your emergency medical expenses when you travel outside the country, up to plan limits.

Finally, it’s a good idea to buy the coverage today you’ll want ten or twenty years from now. There are generally no guaranteed issue rights for Medigap policies outside your Open Enrollment Period. If you buy a low-cost Plan A today, you may not be able to upgrade your coverage ten years from now when your health status has changed and you want a more comprehensive plan.

What costs should I consider in choosing a Medicare Supplement insurance policy?

The federal government standardizes benefits for all Medicare Supplement Insurance Plans, meaning that plans of the same letter offer the same basic benefits. Once you’ve determined which of the ten Medigap plans is right for you, you can rate shop different insurers to find the best price.

One thing to keep in mind: Congress recently passed a law affecting Medigap coverage. Beginning January 1, 2020, plans covering your Part B deductible will no longer be available. Currently, Plan C and Plan F offer this benefit, and will be discontinued in 2020. However, if you buy one of these plans before then, you’ll be able to keep it after the new law goes into effect. If you want this benefit and you are eligible to buy a Medigap plan, you should buy it now. After that date, Plan G, which does not cover the Part B deductible, will be the most comprehensive plan available.


The purpose of this communication is the solicitation of insurance. Contact will be made by an insurance agent/producer or insurance company. Medicare Supplement insurance plans are not connected with or endorsed by the U.S. government or the federal Medicare program. The product and service descriptions, if any, provided on these web pages are not intended to constitute offers to sell or solicitations in connection with any product.

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