Medicare Supplement (Medigap)

How Medicare Supplement Plans Work

Medicare Supplement (Medigap) policies are sold by private insurance companies. After Original Medicare pays its share of a covered service, Medigap picks up some or all of what’s left, including deductibles, coinsurance, and copays, depending on the plan you choose. You continue to pay your Part B premium along with your Medigap premium.

You can see any doctor, specialist, or hospital in the country that accepts Original Medicare, and you never need a referral. If you travel, split your time between states, or simply want broad access to care, a Medigap policy may be the better option.

How Medicare Supplement Plans Are Standardized

Medicare Supplement policies are standardized by the federal government and identified by letters, such as Plan G and Plan N. That means a Plan G from one insurance company provides the same standard benefits as a Plan G from another company. The coverage stays the same from carrier to carrier.

How to Compare Medicare Supplement Plans

Download the Medigap chart to see how the plans available in PA and NJ compare. Because benefits are standardized by plan letter, the coverage is the same regardless of the company that offers the policy, so the real differences between carriers come down to three things: price, financial strength, and customer service

Plan G and Plan N are the most popular choices. A high-deductible Plan G is worth a look if you want a lower monthly premium and are comfortable paying a deductible when you need care.

The Best Time to Enroll in Medigap

Your one chance to buy any plan with no health questions is your Medigap Open Enrollment Period. It begins the first month you are both 65 or older and enrolled in Part B, and it lasts six months. During this window, you cannot be turned down or charged more for a pre-existing condition. Apply after it closes and you may have to go through medical underwriting, which means a carrier can decline you.

Most people want their Medigap coverage to start the same day their Part B takes effect, so plan to apply one to three months ahead of your Medicare Part B effective date.

How Medicare Supplement Plans Are Priced

Even when two companies offer the same standardized plan, their monthly premiums can be quite different. One reason is the pricing method each company uses. There are three methods:

Attained-age: Your premium is based on your current age and rises as you get older. It usually starts as the lowest of the three, which makes it appealing at 65, but it rises over time.

Issue-age: Your premium is based on your age when you first buy the plan and does not increase due to age. Premiums often start out higher than an attained-age plan, however, they may stay more stable over the years.

Community-rated: Everyone with the same plan in your area pays the same premium, regardless of age. However, premium discounts may be available based on age.

With each method, premiums still increase over time because of inflation and rising healthcare costs. The main difference is with attained-age your age is also a factor in those increases.

Issue-age pricing is rare. Just one carrier in Pennsylvania prices Plan G by issue-age, and none do in New Jersey.

Why Work with an Independent Advisor

At ClearGuide, we do the comparison work for you. We review plans from multiple companies, explain the tradeoffs in plain language, and help you choose one that fits your health needs and your budget. From there, we handle your enrollment, review your coverage every year, and are here for benefits and claims questions through the year.

Not sure which plan fits your situation? That is exactly what we are here for. Schedule a consultation and we will walk through your options together.