Are you turning 65 and wondering how to choose a Medigap plan? Choosing a Medigap plan is one of the most important decisions you’ll make as you approach your 65th birthday. There’s certainly a lot of information out there about how to choose a Medigap plan. Your mailbox will be overloaded, your phone will ring off the hook, and your friends will offer their (sometimes unsolicited!) advice. It can seem a little overwhelming. However, the process of choosing the right plan is not as difficult as it may initially seem.
First and foremost, it is important to understand the standardization of plans. Since 1992, the Federal government has set forth the standardized Medigap plans chart that all companies offering plans must follow. This means that a Plan F from one company will provide the exact same benefits, work the same way, can be used the same places and is completely identical to a Plan F from a different company. Understanding this is foundational to choosing a Medigap plan and puts you ahead of many people that have had Medicare for years and are paying “extra” (with no extra benefits) for their plan.
Although the plans are standardized, prices are not. That is the next thing to understand when comparing and choosing a Medigap policy. In fact, prices can vary by as much as 30-50% for the exact same coverage. Remember, there’s no other differences. Certain plans aren’t more difficult to use than others – any Medigap plan is accepted anywhere that takes Medicare nationwide. All companies pay claims through the Medicare “crossover” system, so there’s no variation there either.
Once you have the basic understanding of the two above facts – plans are standardized, prices are not – that’s the first step in knowing how to choose a Medigap plan. From there, you can easily compare plans in an informed way to make a prudent choice of the best Medigap plan for your situation.
The first step is picking a plan coverage level that you are comfortable with. Although your current health and medical needs should play into that choice, you should also make this choice with a long-range view in mind as well. In most states (exceptions: OR, WA, CA, NY), you have to “qualify medically” to make a change in the future after this initial 6-month open enrollment window for picking a plan. This just means that if you choose the lowest level of coverage initially, and then develop a pre-existing condition, you may not be able to move to a higher level of coverage later. Medigap plans were not a part of the Affordable Care Act, which eliminated consideration of “pre-existing conditions” on under-65 health plans.
Once you have selected a coverage level that you are comfortable with, you should compare Medigap rates for that plan. Or, you may wish to compare rates on several of the plans (i.e. Plan F and Plan G) to see what the differences are in premium and how they relate to the coverage differences.
Getting quotes for Medigap plans can send you into an endless loop of talking to companies and agents. And, the rates are not as readily available as they should be. Medicare.gov has some limited plan and company information, but the rate information has not been maintained well and is, frankly, not accurate.
It is always best to get the information about Medigap rates from an independent broker. A broker does not work for a specific insurance company – on the contrary, they can provide a listing of plans for all the companies that do business in your area so you can compare very easily and in an unbiased way.
Once you have the rate information, you can make an informed choice. In addition to the premium, you should also look at the track record of the insurance company – company rating, historical stability of the rates, etc – which you should also be able to obtain from a well-informed broker or agency.
If you have any questions about this information or would like additional information on how to choose a Medigap plan, please do not hesitate to contact us.
Our site also contains more specific information about the plans, which you can review here: