How to Choose the Right Medicare Supplement Insurance Plan

08.05.2024

Are you feeling overwhelmed looking at Medicare supplement insurance plans?

With so many options, it can be hard to choose.

To help find your fit, focus on these four factors.

First, think about your current health. Do you need regular treatments or have preexisting conditions? This might influence the plan you choose.

Second, look at monthly premiums and out-of-pocket expenses. Determine how much you can spend based on your budget.

Third, consider any medical services you may need, such as confirming your current doctors and specialists accept Medicare or finding coverage while away from home.

Finally, read about the insurance companies you’re considering. Compare the value of different insurers so you can be assured you're receiving quality service.

For more resources on Medicare, visit Mutual of Omaha dot com.

Visit the Mutual of Omaha Medicare Advice Center to get a free, personalized recommendation for which Medicare plan may be the right fit for you.

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Summary: Your choice of Medicare supplement insurance plan plays a significant role in the quality of health coverage you may receive. In this article, learn factors to consider when choosing a Medicare supplement plan.

Quick Links

Understanding Medicare supplement insurance
Choosing a Medicare supplement plan
Factors to consider when choosing a plan
Applying for a Medicare supplement plan
Taking the Next Step

If you’re enrolled in Original Medicare and decide you’d like additional coverage from a Medicare supplement plan, the vast array of plans can feel confusing or even daunting. However, selecting the right plan for your needs can help protect your health and your wallet.

Medicare supplement plans (also known as Medigap) help cover out-of-pocket expenses that Original Medicare (Parts A and B) does not, like copays, deductibles, and coinsurance. They typically have a steady and predictable monthly bill that you can factor consistently into your budget.

It’s important to note that Medicare supplement plans generally renew automatically for as long as you pay your premiums on time. This helps ensure you have continuous coverage, but it’s always a good idea to review your plan options annually to make sure it still meets your needs.

Medicare supplement insurance plans typically allow you to see any doctor or specialist that accepts Medicare patients. This may include healthcare specialists that you already know and trust.

To choose the right coverage for you, it’s important to understand the basics about Medicare. We’ve collected everything you need to know about Medicare, so you can pick the plan that best fits your needs. Let’s walk you through the process of how to assess if a Medicare supplement plan may be right for you.

Understanding Medicare supplement insurance

Medicare supplement insurance plans – often referred to as Medigap – are health coverage options that you can purchase in addition to Original Medicare. These plans help pay for some of the deductibles, copayments, and coinsurance, among other out-of-pocket expenses that Original Medicare Parts A and B may not cover.

The federal government has standardized all Medicare supplement plans. This means that plans with the same letter designation (e.g., Plan G or Plan F) must provide the same basic benefits, regardless of the private insurance provider you purchase your plan from.

Choosing a Medicare supplement plan

Each type of supplemental Medicare plan varies in terms of coverage and costs. Medicare supplement plans are simplified into classes A–N. This classification makes it easier to compare several supplemental Medicare plan types and select one that best fits your needs. While the basic benefits of each type of Medicare supplement insurance plan are uniform by carrier, premiums can vary between insurance companies.

Note: In addition to your Medicare supplement plan, you can choose to purchase additional coverage, such as a prescription drug plan (Part D) and dental and vision coverage, to help meet your specific needs. You can also consider Medicare Advantage (Part C) which is an alternative to Original Medicare Parts A and B; it replaces Original Medicare, though you must be enrolled in Original Medicare first before joining a Medicare Advantage plan. You cannot be enrolled in both Medicare Advantage and a Medicare supplement plan.

The table below outlines the most common types of Medicare supplement plans and what each plan offers:

Plans

How it works:

Typically for individuals who prefer:

Plan A

Offers the most basic coverage and helps cover Medicare Part A coinsurance and hospital charges, Part B coinsurance or copayment, and the first three pints of blood for medical treatments.

However, it does not cover skilled nursing facility coinsurance, the Part A deductible ($1,632 in 2024), the Part B deductible ($240 in 2024), Part B excess costs, or foreign travel emergencies.

Basic coverage
Lower monthly premiums
Paying out-of-pocket expenses as they go

Plan B

Helps cover the Medicare Part A deductible, reducing hospital out-of-pocket payments. This plan covers more than Plan A but costs extra.

However, it does not cover services like skilled nursing facility coinsurance, the Part B deductible, excess charges, or foreign travel emergencies.

Basic coverage
Lower monthly premiums
Paying out-of-pocket expenses as they go – including skilled nursing facility care coinsurance, the Part B deductible, Part B excess charges, and foreign travel emergencies

Plan C

Includes coverage for the Part A and Part B deductibles.

Additionally, Plan C helps cover generally 80% of foreign travel emergencies.

Please note that this plan is only available to people who were eligible for Medicare before January 1, 2020.

Plan D

Provides additional coverage, including coverage of the Part A deductible and associated coinsurance and hospital costs.

It does not cover the Part B deductible or any Part B excess charges, however.

Plan D helps cover 80% of foreign travel emergencies

More coverage
Paying for the Part B deductible and any Part B excess charges out of pocket
Foreign travel emergency coverage (covered at 80%)

Plan F

Provides the broadest coverage. It helps you pay the Medicare Part A deductible, coinsurance, and other costs incurred from Medicare Part A.

It also helps pay the cost incurred from Medicare Part B, including the annual deductible.

Paying upfront
Higher monthly premiums
Fewer out-of-pocket costs

Please note that Plan F is only available to those eligible for Medicare before January 1, 2020.

High-deductible Plan F

You must pay Medicare-covered costs (deductibles, coinsurance, and copayments) of $2,800 (in 2024) before high-deductible Plan F starts paying benefits.

The plan starts once you reach this amount and helps you pay the remaining Medicare Part A deductible, coinsurance, and other expenses.

Pay-as-you-go
Low monthly premiums even if it means there could be high out-of-pocket costs

Plan G

Helps you pay the Medicare Part A deductible, coinsurance, and other costs incurred from Medicare Part A.

However, it does not help you pay all costs; you still need to pay the Medicare Part B deductible before Plan G begins paying benefits.

Paying upfront
Higher monthly premiums
Fewer out-of-pocket expenses
More coverage

One of the most popular plans¹

High-deductible Plan G

You will have to pay Medicare-covered charges (deductibles, coinsurance, and copayments) before this plan starts paying benefits.

It does not help you pay the Medicare Part B deductible, though. You will have to pay the expenses incurred by Medicare Part B.

Pay-as-you-go
Low monthly premiums even if it means there could be high out-of-pocket costs

Plan M

Offers a unique benefit arrangement where 50% of the Part A deductible is covered.

Plan M does not cover the Part B deductible or Part B excess charges, so you would be responsible for these costs.

Additionally, Plan M helps cover generally 80% of foreign travel emergencies.

Sharing more out-of-pocket costs in exchange for a lower premium
Paying for expenses as they arise
Foreign travel emergency coverage

Plan N

Helps you pay the Medicare Part A deductible, coinsurance, and other costs incurred from Medicare Part A.

However, it does not help you pay all costs incurred by Medicare Part B. You still need to pay the Medicare Part B deductible.

Paying some upfront and some as you go
A mix of monthly premiums and copays
Occasional out-of-pocket expenses

One of the most popular plans¹

Key differences

Because they are government-regulated, Medicare supplement plans differ mostly in their monthly premiums and degree of coverage. On the other hand, low-premium plans could call for more out-of-pocket costs when you visit a physician or receive treatment at medical institutions.

Visit the Mutual of Omaha Advice Center for more information on how to choose the right Medicare solution for you. Answer a few simple questions, and we’ll build a health care profile to show you which Medicare solutions may best fit your needs.

Factors to consider when choosing a plan

Before selecting a Medicare supplement insurance plan, you must consider several important criteria like your budget and healthcare requirements. Here are some factors to bear in mind:

Medical needs

Think about your present medical conditions and any treatments that you regularly require. If you need frequent medical attention or have chronic diseases, you may want to choose a plan that helps cover those needs.

Cost

Medicare supplement plans vary in monthly premiums and out-of-pocket expenses. You can find a balance between the plan’s cost and its coverage. High-deductible plans offer low premiums, but you may have to pay more out of pocket. Medicare supplement policies typically have a steady, predictable bill. You pay a monthly premium in exchange for low or no additional out-of-pocket costs.

Service coverage

Various Medicare supplement policies cover different treatments to different extents. For instance, some plans cover foreign travel emergencies, while others exclude them. List the medical services you most value or may require and make sure the plan you choose addresses those needs.

Insurance companies

Private insurance companies offer Medicare supplement plans, and it’s advisable to read the fine print and compare the value different insurers offer. Though the benefits are standardized, the quality of service can vary.

It’s always a good idea to speak to representatives of the insurance providers you’re considering. And, when assessing specific Medicare supplement insurance providers, research their longevity, read customer reviews, and get a sense of the brand’s reputation in the insurance space.

Questions to ask when considering a Medicare supplement plan

Whether you’re switching Medicare supplement plans or shopping for the first time, there are a few things to consider*. This section covers questions that should provide clarity much of what you should be aware of when shopping or switching plans.

Here are some questions you can ask the insurance carriers you are researching:

How often do premiums increase, and by how much on average?
How long have you been a carrier of Medicare supplement plans?
What is included in the premium, and are there any additional fees?
What is your policy on switching plans within your company?
Are there any penalties or fees for switching plans?
How does medical underwriting work for these plans?
How do pre-existing conditions affect my premiums and coverage options?
Is there a waiting period before coverage for pre-existing conditions begins?
Can I get coverage for specific treatments or medications related to my pre-existing conditions?
What is the process for renewing my policy each year?
Are there any circumstances under which my policy might be canceled?
Will my Medicare supplement plan cover me if I travel or live part-time in another state? What if I move?
Does the plan cover emergency medical services while traveling abroad?

Applying for a Medicare supplement plan

Here’s a step-by-step guide:

1. Choose the coverages and benefits you most want

A good place to start is by listing your present medical expenses and needs. Then, add to the list any future medical expenses and needs that come to mind.

2. Compare plans

Review the different standardized Medicare supplement plans in your area or contact Medicare to understand what each plan covers. Consider factors such as coverage, benefits, and monthly premiums.

3. Research insurance companies

Choose a reputable insurance company that offers the Medicare supplement insurance plan you want. Go through the details of the policy and the plan before making a decision. Contact the health insurance companies you are interested in to get quotes for the Medicare supplement insurance policies you are considering. Compare these quotes to determine which plan offers the best value for your specific needs and budget.

4. Apply for your Medicare supplement policy

Once you’ve selected a plan, fill out an application with the insurance company. If your application is approved, you will receive confirmation of your elected coverage start date.

Taking the Next Step

Medicare supplement plans may not be for everyone, but they may be a good fit if you are looking for a steady, predictable bill you can budget for, and standardized coverage regardless of the carrier.

At Mutual of Omaha, we can help you get answers to common questions and have created the Mutual of Omaha Advice Center to provide a personalized recommendation for the Medicare solution that may best suit your needs.

Looking for even more information? We offer valuable resources and tools designed to empower you to understand your insurance options and make choices that work for you.

* Switching outside of guaranteed issue period may require medical underwriting which could lead to coverage being rated or denied

¹The State of Medicare Supplement Coverage – AHIP.org