When looking to cover the expenses Medicare does not pay, most seniors choose either a Medigap plan (also known as a Medicare Supplement) or Medicare Advantage plan. Below are some important things to know about Medigap plans. For details on how Medicare Advantage plans work, see the link on the left.
- Medigap plans pay after Medicare has paid its share for Medicare approved treatment. Medicare Advantage plans pay instead of Medicare.
- There are 11 standardized plan types identified by the letters A through N. Medicare makes comparing plans simple by making all plans of the same kind identical; one company’s plan N is exactly the same as every other company’s Plan N, for example.
- All 11 plans allow you to go to any doctor who participates with Medicare. No plan is better than another in this respect. There are no networks or referrals needed for a specialist’s care in any plan.
- All 11 plans cover the same medical procedures and services. No plan is better than another in this respect, either. I emphasize the similarity of all 11 plans in these two areas because many agents will try to steer seniors to the most expensive plans by characterizing all others as inferior, when their motivation may be driven by their being financially incentivized to sell the most expensive plan.
- The only differences between any of the 11 Medigap plans are the monthly premium and the amount of cost-sharing on your part. The more cost-sharing, the lower the monthly premium. Less or no cost-sharing means a higher premium. So, you can pay more monthly to pay less in copayments and deductibles, or pay less monthly but pay more in copayments and deductibles.
- All cost-sharing plans have limits on your out-of-pocket portion, taking the risk out of choosing one of the lower priced plans.
- Medigap plans are not allowed to include drug coverage. If you choose a Medigap plan, you will need to enroll in a Stand Alone Part D drug plan. Note: If you enroll in a Stand Alone Part D drug plan and it takes effect, you have used your initial election and you will not be allowed to select a Medicare Advantage plan until the next Annual Election Period, which is October 15 -December 7. So, it’s important to decide between Medigap or Advantage plan before enrolling in any drug plan.
- During the first six months after your Part B effective date, you cannot be asked medical questions when enrolling in a Medigap plan.
For more details on how Medigap plans work, please call us. Medicare also has a publication entitled Choosing a Medigap Policy that you may find helpful. We have included a download of that publication on the Medicare Publications link on the left.