Medigap, otherwise known as Medicare Supplement Health Insurance, is designed to pay for health care costs that aren't covered under Original Medicare (Medicare Part A and Medicare Part B). Hence, subscribers pay a monthly premium for full or partial coverage of their out-of-pocket costs, including deductibles, coinsurance, and copayments. Note that Medigap plans do not cover long-term care, private-duty nursing, vision care (including glasses and contact lenses), hearing aids, dental care, and in most cases, prescription drugs.
Medigap plans do not stand alone. A client must be enrolled in both Original Medicare Parts A and B to purchase any of these plans. So, any client who buys a Medigap plan pays a monthly premium for their Medicare Part B (Unless they qualify for the Medicare Savings Program) and the Medigap plan they are subscribed to.
A Medigap policy or plan covers only one person. If you and your partner or family want Medigap insurance coverage, each one of you will have to buy one separately. That being said, some Medigap Companies offer Household discounts if a spouse will also have a Supplement plan through that same company.
Standardized Medigap Plans
There are multiple types of Medigap plans that can fill the gaps in your Medicare coverage. Only private companies sell Medicare supplement plans, and each of these plans must follow federal and state laws designed to protect buyers.
Medicare Supplement plans are standardized by law in all but three U.S. states. These states are Massachusetts, Minnesota, and Wisconsin. Standardization means that the benefits each standard Medigap plan letter offers are the same, regardless of the insurance company or carrier. Premiums, however, may vary from one company to the other.
There are ten standardized Medicare Supplement plans and two high-deductible options for Plan F and Plan G approved by the federal government. These standard Medigap plans are identified by a letter from A through N. They are plans A, B, C, D, F, G, K, L, M, and N. Each plan offers different health coverage benefits and has different costs.
What Are the Best Medigap Plans in 2022?
Out of the 10 Medicare Supplement plans, there are three best plans most people consider in 2022. They are plans F, G, and N and are considered the best based on the following criteria:
Coverage
Monthly premium
Accessibility
Client satisfaction
However, you will have to consider what each has to offer, their costs, your needs, and your location to know which one best covers your needs. Let's take a closer look at each individual plan and explore the key differences.
Medigap Plan F (Full Coverage)
Medigap Plan F is also known as the “Full Coverage” plan because the beneficiary only pays the monthly premium and every other cost outside that is covered by the plan (that is, Plan F). Plan F is considered the most comprehensive Medicare Supplement plan on the market. It provides full coverage after Medicare pays its portion.
Medicare Supplement Plan F covers the following:
Medicare Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used up
Medicare Part A hospice care coinsurance or copayment
Medicare Part A deductible
Medicare Part B coinsurance or copayment
Medicare Part B deductible
The first three pints of blood
Foreign travel exchange (up to plan limits)
Skilled nursing facility care coinsurance
Medicare preventive care Part B coinsurance
Hence, the following group of persons often consider buying a Medigap Plan F:
Those who go for doctor and hospital visits frequently
Those who live in a state that allows excess charges
Those who travel out of the U.S. often
Note that Plan F is no longer available to newly eligible clients for Medicare on or after January 1, 2020. However, those eligible for Medicare before January 1, 2020, can still enroll in or change to a Plan F if they so desire. Also, beneficiaries who already had Plan C or F before January 1, 2020, can continue with Plan F.
Medigap Plan F High Deductible
You might have heard of Medicare Supplement Plan F-High Deductible or High Deductible Plan F. This is because Plan F can be sold with a high deductible option. This option is best if you wish to enjoy Plan F benefits but at a significantly lower monthly premium. In 2022, you must meet a $2,490 deductible before your Plan F coverage kicks in.
Plan F-High Deductible is only available to those eligible for standard Medicare Supplement Plan F. So. You are only eligible if you were qualified for Medicare before January 1, 2020.
Plan F-High Deductible Medigap plan is often considered by people who:
Want a lower premium
Want to enjoy 100% coverage after the higher deductible is met
Typically have fewer medical expenses throughout the year
How Much Does Medigap Plan F Cost?
The cost of Medigap Plan F depends on several factors, including your plan provider, location, age, gender, and current health status. However, the average cost of Medicare Supplement Plan F’s monthly premium can range drastically.
Often monthly premiums can range between $150 to $570 a month. Plan F is appealing to many people because other than the monthly premium beneficiaries do not have any out of pocket costs for covered Medicare services. The problem is often that it is substantially more expensive than Plan G for almost identical coverage.
Medigap Plan G (Greatest Value)
Medigap Plan G is fast becoming the most popular plan and the most comprehensive plan for new enrollees because of Medigap Plan F’s enrollment regulations and expensive premiums. It is also considered the “greatest value” by many beneficiaries. This is because Plan G covers everything that Plan F covers except for the Medicare Part B annual deductible.
In other words, Medicare Supplement Plan G makes beneficiaries responsible for their yearly Part B deductible (out-of-pocket medical cost), which in 2022 is only $233. This allows beneficiaries to budget for their medical spending. However, like Medicare Supplement Plan F, Medicare Supplement Plan G covers:
Medicare Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used up
Medicare Part A hospice copayments and coinsurances
Medicare Part A deductible
Medicare Part B copayments and coinsurances
Medicare Part B excess charges
The first three pints of blood
Foreign travel exchange (up to plan limits)
Skilled nursing facility care coinsurance
Medicare preventive care Part B coinsurance
Medigap Plan G is the ideal plan choice for beneficiaries who:
Do not want unexpected out-of-pocket medical costs
Want usually lower, more stable, annual rate increases
Live in a state that permits excess charges
Often travel outside the U.S.
Medigap Plan G-High Deductible
Medicare Supplement Insurance Plan G also has a high deductible option. The High Deductible Plan G provides the same benefits as the standard Medicare Supplement Plan G but with a lower monthly premium. Like the Medicare Supplement Plan F-High Deductible, the Plan G-High Deductible comes with a high deductible, which is also $2,490 in 2022. So with this option you get lower monthly premiums but higher out of pocket costs.
The Medigap Plan G-High Deductible is a better option for clients who:
Cannot afford the Medicare Supplement Plan G’s monthly premium or are looking for a low-cost alternative
Want to enjoy 100% coverage after the higher deductible is met
Typically have fewer medical expenses throughout the year
How Much Does Medigap Plan G Cost?
The cost of Medigap Plan G depends on several factors, including your location, age, gender, and health status. However, the average cost of Medicare Supplement Plan G’s monthly premium can be anywhere between $100 to $300. If this is expensive, some people will consider a Medicare Supplement Plan N or a Medicare Advantage Plan.
Medigap Plan N
Medigap Plan N is usually the most budget-friendly of the three best Medicare Supplement plans when it comes to monthly premiums. It is similar to Plan G but can be considered as a step-down in coverage. This is because it offers the same benefits as Plan G but has more potential out-of-pocket costs.
With Medigap Plan N, you are responsible for paying the Part B deductible (Just like with Plan G), and part of the copayments for doctor and emergency room (ER) visits that do not result in an inpatient stay in the hospital.
Medicare Plan N does not cover Part B excess charges which is not a big deal in the states where providers cannot bill excess charges (Connecticut, Massachusetts, Minnesota, New York, Ohio, Pennsylvania, Rhode Island, and Vermont). However, if someone were to travel out of one of those states to get treatment, they could incur up to 15% in excess charges. Also, not all healthcare providers bill excess charges, so to avoid excess charges, speak with your doctor.
Medicare Supplement Plan N is usually 20-30 dollars per month less expensive than Medicare Supplement Plan G. For people that seldom go to the doctor, it may be something to consider, but for only a few dollars more per month, they can have excess charges covered.
Plan N may be an option to consider for those who:
Want a lower monthly premium
Do not frequently visit the doctor or the hospital
Are not bothered by possible excess charges
Do not mind small copayments
Medigap Plan N covers the following:
Medicare Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used up
Medicare Part A hospice care coinsurance or copayment
Medicare Part A deductible
Medicare Part B coinsurance, except for a copayment of $20 for office visits and a $50 copayment for emergency room (ER) visits that do not result in hospitalization.
The first three pints of blood used in a procedure
Foreign travel exchange (up to plan limits)
Skilled nursing facility care coinsurance
Medicare preventive care Part coinsurance
Medicare Supplement Plan N may not be as comprehensive as other letter plans, but it is one of our client's most popular Medigap plans behind Plan G. This is due to its lower premiums and accessibility for relatively healthy clients.
How Much Does Medigap Plan N Cost?
The average cost of Medigap Plan N can range from $90 and $180, although it can be as high as $200 in some states and as low as $80 in other states. Rates are determined by age, gender, location, pricing method, and sometimes, present medical history.
With Medigap Plan N, you pay copays for some medical services: $20 for each doctor visit and $50 for each emergency room (ER) visit that doesn’t result in inpatient admission.
Should I Be Concerned About Rate Increases?
Yes. All Medigap premiums will eventually go up but some much more than others. So, it is important to not only look at the current monthly premium but what has that company's rate increase history been. This can save you a substantial amount of money long term.
As an unbiased, independent broker, we have the quoting software that can compare all available companies and those companies' rate increase history. Some companies start with a low rate but have double-digit rate increases in just a couple of years. We are experienced and equipped to provide professional advice on what plans to go for and what companies you should buy from.
Can I Change My Medigap Plan to Another?
Yes, you can switch medigap plans. You can enroll in a medigap plan regardless of your current or past health during your one time Medigap Open Enrollment Period. During this period, insurance companies or carriers cannot deny you coverage. Also, you won't have to pay higher monthly premiums due to pre-existing health conditions.
Outside of this one time open enrollment period you can only change your Medigap plan if you are able to pass a specific Medigap company’s underwriting requirements. This means an insurance company can charge you higher premiums or deny you coverage all together. Therefore, the best time to shop your current Medicare Supplement plan is now because one medication or diagnosis may leave you stuck on a plan with rapidly increasing monthly premiums.
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