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How To Choose The Best Medigap Plan

How To Choose The Best Medigap Plan
Finding the best Medigap plan can be a challenge if you don’t understand how it works. Knowing basic facts about how Medicare supplement plans work and their different options can you save you hours of research, as well as money.

Medigap Basics

Medigap plans basically begin where original Medicare (Parts A & B) end by picking up some or all of out-of-pocket expenses, such as the $1,216 deductible for hospital services under Part A or the 20% coinsurance for outpatient and physician care under Part B. In all but three states, (MA, MN, WI) Medigap plans are sold in 10 standardized variations designated with letters A to N. Each plan differs in what it will cover. For example, Plan F, which is the most popular, picks up most of the out-of-pocket expenses for Parts A and B, and includes coverage for foreign travel emergencies.

Consider the following regarding Medigap plans:

  • Medigap plans are regulated by the state. So the benefits for each plan will not differ from carrier to carrier. For instance, Plan A sold by United Healthcare, will have the same benefits as Plan A sold by Aetna. The only difference will be the premium.
  • You do not need a referral to see a specialist. If the provider accepts Medicare payment, then the Medigap plan will pay benefits for Medicare approved services.
  • Unlike Medicare Advantage plans, Medigap plans have no network restrictions. Your coverage goes with you across the United States.
  • Medigap plans do not offer coverage for prescription drugs. You will have to enroll in Medicare Part D to get drug coverage.

So Which Is The Best Plan For You?

Depends. Take your budget into consideration. How much premium can you afford after paying the Part B premium? If you are on the healthier side, going with Plan F may not be the most cost efficient strategy. Plan N offers the same benefits as Plan F, with the exception of paying the Medicare Part B deductible, currently $147, and any excess charges. However, Plan N’s premium can be roughly 25-30% less than Plan F.

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