How to Compare Medigap Policies

If you're disabled or over 65 and have Medicare coverage, it doesn't cover all of your medical expenses. You can supplement your Original Medicare with a Medicare supplement plan, also known as a Medigap policy. There are 10 standardized plans, identified by a capital letter (A through N). Since these plans are offered by private insurance companies, the only difference between them is the amount of the premium you'll have to pay.^{[1]XResearch source}

Part 1

Part 1 of 3:

Evaluating Your Own Needs

1
Research before you enroll in Medicare Part B. When you turn 65, you are eligible for Medicare Part B. You have six months from the month you turn 65 to get guaranteed enrollment in a Medigap policy. After that, companies may have the right to turn you down or charge you more if you have a pre-existing condition.^{[2]XTrustworthy SourceConsumer ReportsNonprofit organization dedicated to consumer advocacy and product testingGo to source}
- You can start looking at Medigap policies before you turn 65. Get a good idea of which lettered plan you want, and you'll have plenty of time to shop around for the best rate.
2
Learn what benefits aren't covered by Medicare. Original Medicare is not designed to cover all of your medical expenses. While it covers most of your inpatient costs, it only covers about 80 percent of your outpatient costs, and does not cover most prescription drugs.
- You can visit the Medicare website at https://www.medicare.gov to learn what benefits are not covered, or only partially covered, by Medicare.
- You can also understand more about what Medicare covers by talking to a local insurance agent or talking to someone at your state insurance department or with your State Health Insurance Assistance program.^{[3]XTrustworthy SourceConsumer ReportsNonprofit organization dedicated to consumer advocacy and product testingGo to source}
3
List the benefits that are most important to you. Once you understand what Medicare doesn't cover, make a list of the benefits that you would want a Medigap policy to cover. This list will help you look at the lettered plans and decide which one would work best for you.^{[4]XResearch source}
- Some benefits are more universally covered than others. For example, if you plan to travel overseas frequently, you may need medical treatment abroad, which Medicare does not cover. Nearly half of the lettered Medigap plans don't cover treatment abroad, and those that do only cover about 80 percent.
- It can also help to prioritize your list. Put things that you absolutely must have coverage for at the top, and then list things that it would be nice to have coverage for. For example, if you are in good health and don't anticipate you'll need hospice care, you might not need to consider whether it's covered by your Medigap policy.
4
Look over your budget. Since Medigap plans are standardized, the only difference between them is the premium you'll pay. The amount of that premium will differ generally depending on where you live and the insurance company offering the plan.^{[5]XResearch source}
- Have a good idea of how much you can afford before you start looking at plans, so you can quickly eliminate letter plans that won't fit into your budget.
- You also want to consider what you'll be able to afford to pay. Most letter plans cover Part A copays and coinsurance, but only a few cover your copays and coinsurance for Part B.
- You don't want to look at just your current budget. You also want to project it out over a few years, especially if you anticipate your income will decrease.
- If there are expenses uncovered by Medicare that aren't a priority for you, it's worth looking at how those expenses would impact your budget if that type of treatment became necessary. For example, you may not anticipate that you would need skilled nursing facility care, but it might be better to get a supplement plan that would cover it just in case.
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Part 2

Part 2 of 3:

Reading the Plan Chart

1
Print a copy of the plan chart. There are charts available from Medicare.gov, as well as from your state's insurance department or State Health Insurance Assistance program. These charts provide a visible reference of the benefits covered by each of the standard 10 Medigap plans.^{[6]XResearch source}
- While you can easily look at the chart on your computer screen, it can help to have a printed copy so you can make notes or highlight particular benefits of interest. This will help you compare the plans more easily.
- The charts are typically organized with the letters of the plans across the top and the benefits uncovered by Medicare along the side. In each box, you will see a "Yes" if that benefit is covered under the plan, and a "No" if it is not.
- If the plan only covers a portion of the uncovered expenses for that particular benefit, the chart will give you the percentage that the plan covers.
2
Find the benefits that are most important to you. Read down the side of the chart to find the benefits you listed when you were evaluating what expenses weren't covered by Medicare. It might help to mark or highlight those rows so that you can separate them from the others more easily.^{[7]XResearch source}
- If you have trouble focusing on the rows, you can also block the rest of the chart with another piece of paper so that only one row is visible at a time.
- For example, if you only want plans that will cover your Part A deductible in full, go to the row labeled "Part A deductible." The blocks following that label provide the coverage for each letter plan.
3
Highlight the plans that cover those benefits. Go across the rows of benefits that are important to you and mark or highlight the plans that have a "Yes" in that box. Those are the plans that offer that particular benefit or cover that expense.^{[8]XResearch source}
- If there is any benefit that you absolutely must have, you can mark off the entire column corresponding to plans that don't offer that benefit. As you go down your list, you'll have progressively fewer plans to compare.
- For example, if you're looking at the "Part A deductible" line, you'll see that 6 letter plans cover the Part A deductible completely. The A plan doesn't cover it at all, so you can mark that plan off your list for consideration.The K, L, and M plans only cover a portion of the Part A deductible. If you want a plan that covers it all, you can mark them off as well.
4
Compare average premiums for different plans. Once you've chosen a few lettered plans that may work for you, find out how much those plans typically cost so you can potentially narrow your focus further.^{[9]XResearch source}
- You can find information about average premiums from Medicare.gov or your State Health Insurance Assistance program. Senior associations such as AARP also may have information on premiums you can expect to pay for each lettered plan.
- C and F cover key benefits that most people want, but typically don't cost as much as other plans. For that reason, they tend to be the more popular Medigap plans.
- Plan A offers the fewest benefits, but typically has the lowest monthly premium. Plans K and L also usually have lower premiums, but they don't cover all of your copays or coinsurance payments, until you reach an annual out-of-pocket maximum.
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Part 3

Part 3 of 3:

Choosing Your Plan

1
Search for Medigap carriers in your area. Medigap plans are offered by private insurance companies. To get a Medigap policy, you have to work with the insurance company directly, or hire a private insurance agent to help you.^{[10]XTrustworthy SourceConsumer ReportsNonprofit organization dedicated to consumer advocacy and product testingGo to source}
- You can find carriers online by visiting https://www.medicare.gov/find-a-plan/questions/medigap-home.aspx. Enter your ZIP code and click the button to continue. Choose the letter plan you want from the list to see carriers who offer that coverage.
2
Compare prices among same-letter plans. Medigap plans are all standardized, which means every plan with the same letter offers exactly the same coverage, regardless of which insurance company offers it.^{[11]XResearch source}
- Generally, you'll be best served by going with the plan with the lowest premium. Your premium will depend on your age, gender, and location. Premiums for the same letter plans may differ by as much as $50 to $75 a month, depending on the company offering the plan.
- For whatever reason, though, you may prefer one company over others. For example, you may prefer Humana because you had insurance with them through your employer before you retired, so you feel that you're familiar with the company.
3
Evaluate the plan's premium-pricing method. Don't just look at how much your premium will be this year. A plan that seems like it's the cheapest when you first purchase it may later end up being the most expensive, depending on how the insurance company adjusts the rate over time.There are three basic pricing methods for Medigap plans.^{[12]XTrustworthy SourceConsumer ReportsNonprofit organization dedicated to consumer advocacy and product testingGo to source}
- Community-rated plans are considered to be the least expensive overall, even though they may not have the lowest initial premiums. Premiums do not increase based on age.
- Issue-age-rated plans base your initial premium on how old you are when you start the policy. Your premium may still go up because of cost inflation, but other than that it won't increase.
- Attained-age rated plans go up as you get older. They may have the cheapest initial premiums, especially if you're relatively young when you start your Medigap coverage. However, as you get older your rate will go up and may go from one of the lowest to one of the highest.
4
Find out your state's laws on guaranteed issue. During the 6 months after you turn 65 and enroll in Medicare Part B, you have a guaranteed right to buy a Medigap policy. Federal law prohibits insurance companies from turning you down or charging you more because of any pre-existing conditions. However, outside of that grace period the insurance company does have the right to refuse to insure you. Some states have expanded on federal protections.^{[13]XTrustworthy SourceConsumer ReportsNonprofit organization dedicated to consumer advocacy and product testingGo to source}
- Federal law sets the minimum rules that insurance companies offering Medigap policies must meet. States can go further, and some do. For example, some states provide guaranteed issue for everyone at any time.
- To find out your state's law on guaranteed issue, talk to a local insurance agent. You can also call your state insurance department or your State Health Insurance Assistance program.
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Warnings

Medigap policies are standardized differently in Massachusetts, Minnesota, and Wisconsin. If you live in one of those states, the content of the charts will be different. You'll still analyze the information much the same way.^{[14]XResearch source}
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