How to Choose a Medigap Plan Based on Your Future Needs

Guest Post by Lindsay Malzone

Choosing a Medigap plan, also known as Medicare Supplement, can be confusing. From letter plans A–N, it can all go over your head. To help you through this process, we've broken down three steps to selecting the right plan for you. 

Medigap is not one-size-fits-all. Each plan has its own set of standardized benefits. Before purchasing a policy, it’s crucial to do your research. Evaluating your overall financial and healthcare needs can not only help save you money in the long run but get you the right coverage so you’re not scrambling when you need it most.

Step 1: Set a monthly budget

When setting a budget for what you’re comfortable spending per month on your healthcare premiums, it’s important to take into consideration both your current and future finances.

If you choose coverage that meets your budget now, but might not in the future, you may not be able to switch plans due to pre-existing conditions. Remember, monthly premiums vary based on several factors, including your age, location, gender, and tobacco use. 

Spending more money now in monthly premiums could keep more money in your rainy-day fund. 

Step 2: Consider your current and future health

If you are relatively healthy now, you may consider basic health coverage. This is where it gets tricky. You only get a once in a lifetime Medigap Open Enrollment Period. (Unless you’re under 65, then you get two.)

Three months before you turn 65, your Initial Enrollment Period begins. This is when you can enroll in Part A, Part B, as well as Part D (prescription drug coverage). This is a seven-month window that ends three months after your birthday.

Your Part B effective date is what initiates your once in a lifetime six-month Medigap Open Enrollment Period. This is when you can enroll in any Medigap plan without going through medical underwriting.

Outside of this time frame you can still enroll in a Medigap plan at any time of the year, you’ll just have to answer health questions. Some pre-existing conditions can get your coverage denied. It's better to prepare for the worst now since pre-existing conditions can prevent you from getting the coverage you need in the future.

Learn more about what each Medicare part covers, enrollment, and cost.

Step 3: Compare Medigap letter plans A–N

Once you’ve figured out your monthly budget and how extensive you want your coverage to be, you can begin comparing different letter plans. Medigap plans are lettered A–N.

The core policy benefits found in Plan A are included in all letter plans. There are first-dollar coverage plans, high-deductible plans, and cost-sharing plans that come with copays. The higher the monthly premium, the less you pay out of pocket when you use the benefits. Below, we’ll discuss the most popular plans. 

Only those who were eligible for Medicare prior to 2020 are eligible to enroll in the only first-dollar coverage plan, Plan F. This is also the plan that will cost you the most in monthly premiums. If you’re looking for lower premiums without losing benefits, than the high-deductible version is a great alternative. Both options have been discontinued and are not available to new beneficiaries. 

The next best option, and plan that’s available to all beneficiaries, is Plan G. Outside of the monthly premium, you’re only responsible for paying the Part B deductible, which is $203 in 2021. The Part B deductible amount for 2022 will be announced by November. Plan G also comes with a high-deductible version. 

The last Medigap plan we’re going to mention is Plan N. This plan is considered a cost-sharing plan. In exchange for a lower monthly premium, you pay small copays when you visit your doctor or go to the hospital.

You picked a Medigap plan, now what?

This is where having a licensed Medicare agent on speed dial can be helpful. Beneficiaries don’t have access to tools that can compare Medigap plans in their state with all the carriers’ side by side. There are quoting tools out there that give you generic quotes, but not quotes tailored to you.  

Find an agent that doesn’t work for one carrier. You want an agent that works with multiple carriers and can give you non-biased expert advice.

Medigap plans do not cover prescription medications that you pick up at your local pharmacy. That’s where Part D comes into play. Once you select a Medigap plan, your agent can also compare Part D plans in your area.

Make sure to let your agent know what medications you’re taking. They will ensure they’re covered in your plans drug formulary.

Lindsay Malzone is the Medicare expert for MedicareFAQ. She has been working in Medicare since 2017. She is featured in many publications and has become the expert in the Medicare industry. Her passion is providing Medicare beneficiaries with the resources they need to make an educated decision on their healthcare needs and provide them the opportunity to learn about Medicare in a non-sales environment. You can also find her over on YouTube where she publishes Medicare-related video content regularly.