You may be considering a Medigap (or ‘Medicare Supplement’) plan to help manage your costs if you are currently receiving Medicare coverage through Original Medicare.
In total, there are 10 Medigap plans available: Plans A, B, C, D, F, G, K, L, M, and N. Each plan provides a different level of coverage which is standardized and determined by the government. For example, a Plan G from Company A provides exactly the same coverage as Plan G from Company B. Insurance companies that sell Medigap policies don’t have to offer every Medigap plan but must offer Medigap Plan A if they offer any Medigap policy.
As Medigap plans are standardized, the only difference when comparing the same plan across different private insurance companies is the price and the insurer’s reputation.
What does each Medigap plan cover?
Medigap is policies help to pay for the out-of-pocket costs (deductibles, copays and coinsurance), also referred to ‘gaps’ in Original Medicare, in return for a monthly premium that you pay the private insurance company. This premium is in addition to your standard Medicare Part B premium ($144.60 in 2020, or higher depending on your income thresholds). Purchasing a Medigap plan effectively shifts the burden of paying for out of pocket costs to the insurance company and for covered services, Medigap will effectively all or most of the out-of-pocket costs
In total, there are 10 Medigap plans available: Plans A, B, C, D, F, G, K, L, M, and N each with a different level of coverage. There are other Medigap plans that are no longer for sale include Plans E, H, I, and J. However, they still offer their original coverage to those who previously purchased them.
Which is Medigap most popular?
Traditionally, Medigap Plan F was the most comprehensive and most popular Medigap policy (with 53% of those enrolled in Medigap policy choosing Plan F) you could purchase that effectively covered all your out-of-pocket costs under Original Medicare.
However, starting in 2020, rules have changed so that Medigap plans that pay the Medicare Part B deductible ($198 in 2020) will no longer be sold to those newly eligible for Medicare on or after January 1, 2020. This means Plans F and C can no longer be purchased if you are eligible after 2019.
As a result of this rule change, Plan G will now likely be the most popular plan as it provides the next most comprehensive coverage. Plan G has historically also been the second most popular plan with around 17% of those enrolled in Medigap picking Plan G followed by Plan N which 10% of Medigap enrollees have purchased.
Plan F has traditionally been the most popular choice for Medicare beneficiaries who have purchased a Medigap plan. However, starting January 1, 2020 Medicare Plan F and C plans will no longer be available to purchase for newly eligible Medicare beneficiaries. As such, it is expected in the future Plan G will become the most popular choice as it provides the next most comprehensive level of coverage, followed by Plan N.