Medicare Supplement Plans to Avoid!

Medigap plans are a great way to supplement your Original Medicare coverage. Original Medicare provides truly comprehensive coverage, but these supplemental plans do help to fill in the gaps. However, not all plans are created equally.

Medigap

When you turn 65, you’ll be eligible for Original Medicare which is Part A & Part B. Part A is your hospital insurance. Part B is your outpatient insurance. Together, they will cover a large portion of your medical needs. 

Medicare.gov is an excellent resource and if you log on to medicare.gov you’ll see the full range of benefits offered by Part A & Part B.

Unfortunately, there are gaps. There are benefits that are simply not offered by Original Medicare such as dental, vision, hearing, and prescription drugs. For these benefits, you will need additional insurance options.

But there are also deductibles and copays, and coinsurance. There is also no out-of-pocket maximum with Original Medicare.

So, you will have to pay a monthly premium at the very least for Part B. Most people are eligible for free Part A through their or their spouse’s work history.

Deductible

Additionally, there is a deductible for Part A and for Part B. For Part A, it is applied per benefit period. Benefit periods can be a little tricky to understand, so you can think of it as a hospital stay. If you need to be hospitalized for surgery, for example, you would first need to meet your Part A deductible. If you needed to be hospitalized again in that same year, that would likely be a new benefit period, and you would once again have to meet your Part A deductible.

Your Part B deductible is annual. So you only need to meet it once per year. 

In 2023, the Part A deductible is $1600, and the Part B deductible is $226.

Copays & Coinsurance

Then there are copays and coinsurance. For Part A, again, it is a little more difficult to understand. Your coinsurance is determined by the type of care facility and your length of stay.

Part B is a little more straightforward. It will usually be 20% of the Medicare-approved amount unless there are Part B excess charges.

So, Medigap plans, also known as Medicare Supplement Plans, will help to cover these financial gaps. They can help with deductibles copays and coinsurance. They will either cover all of your medical bills or impose an out-of-pocket max. However not all plans are created equally.

Plans A & B

Let’s lump these plans together because there are similar issues with them. Medicare Supplement Plan A and Plan B do NOT cover your coinsurance for skilled nursing facility care. This could potentially cost you thousands of dollars. The monthly premiums do not offer enough of a savings to offset this potential cost.

High Deductible Plan F & Plan G

Again, these plans have similar issues. High Deductible Plan F & Plan G are also not great options. The deductibles are so high that when you run the numbers, it doesn’t work out great for the beneficiary. When you compare the potential cost savings, you would likely be better off with a regular plan.

Plan F

Finally, let’s talk about Plan F. Plan F is actually great. If you look at Medicare.gov you’ll see that it covers a LOT!

The problem is two fold. These plans are no longer offered to new enrollees, so that will likely count you out. But even if you are eligible for Plan F, you may want to avoid it. Plan F, when compared to Plan G, usually has a much higher monthly premium despite offering very similar coverage. Also, although Medicare Supplement plans usually increase on a yearly basis, Plan F historically has had much steeper increases than other plans.

Best Plans

The best plan is really determined by the individual’s needs. That being said, Plan G and Plan N are usually the most popular. They will offer you the best bang of your buck.

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