Many seniors wonder if they should get a Medicare Supplement or just stick with original Medicare. Medicare only covers 80% of your medical care, leaving you to pay the other 20% yourself – and don’t forget there’s no maximum out-of-pocket protection. If you come down with a serious illness, you could be looking at tens if not hundreds of thousands of dollars in out-of-pocket expenses. Remember, medical bills are the number one cause of bankruptcy in America, and it’s not because the person didn’t have any insurance – but because they had the wrong coverage.
Can I afford the monthly payment for a Medicare Supplement plan?
This should be the first question that seniors ask themselves when considering a Medicare Supplement. Often, you can expect to pay $100 – $200 or more per month, depending on which Medigap Plan you choose. Generally, the higher the monthly premium, the lower the out-of-pocket costs. If you go with a Plan F, you pay a higher monthly premium but then you don’t have to worry about any other medical bills under Part B, nor do you have to worry about your Part A deductible or coinsurance.
Seniors on Plan G will pay slightly less in monthly premium, and likely save even more than the amount of the Part B deductible they are responsible for paying (which is $185 in 2019). After that deductible is paid, then Plan G offers the same coverage as Plan F for the rest of the year. Seniors can find even lower monthly premium payments with Plan N or High-Deductible Plan F, but in exchange, they’ll pick up more out-of-pocket costs (like doctor and ER copays on a Plan N, and a $2,300 annual deductible with a High-Deductible Plan F).
What other factors should I consider?
When comparing Medicare Supplement plans, the fact that they are all standardized by federal law makes it easy to compare plan benefits across companies – you only have to look at price and rate history because all other factors are exactly the same. Besides looking at the price in terms of the monthly premium, you should also consider the out-of-pocket costs you are required to pay, such as the Part B deductible, Part B Excess Charges, and ER and doctor copays.
The deciding factor is basically what you would rather pay yourself or have the insurance company pay for you. Usually, the cost of paying it yourself is cheaper than having your plan automatically pay it for you. So, if you value the benefit of not having to worry about out-of-pocket costs, then you’ll pay more for that benefit.
Would a Medicare Advantage plan be better than a Medicare Supplement plan?
If you find the monthly premiums too high for a Medicare Supplement, then you might want to look a Medicare Advantage Plan instead. The “low-to-no” monthly premium plans are common around major metropolitan areas and less common in rural areas, where seniors may be better suited for a Medicare Supplement plan instead.
The biggest caution we give seniors considering a Medicare Advantage plan is to look at the maximum out-of-pocket cost and ask yourself, if something happened to you, would it break the bank to come up with that kind of money? Another thing to watch for is that Medicare Advantage Plans are constantly changing, so every year, seniors need to double-check to make sure all their doctors still accept their plan, and their plan still accepts all their medications (or hasn’t changed the pricing on them).
Which Medicare Supplement plan is best?
Seniors who would rather wrestle with the rates than keep track of which doctors take their plan and which prescriptions are covered by their plan – might be better off with a Medicare Supplement and separate Part D Plan. The next question is: Which Medigap Plan should you get? Plan F, the “Cadillac” of Medigap Plans, provides ease and convenience by eliminating out-of-pocket costs and allowing seniors to just focus on their monthly premium.
Seniors coming on to Medicare after 2020, wanting to pocket some extra premium savings and enjoy lower rate increases should consider a Plan G instead of a Plan F. If you want even more savings and you’re somewhat healthy, you might want to consider a Plan N.p
