What Medicare Supplement Do I Need [2019]?

This can be a real hot topic, definitely.  The Medicare Supplement plans to consider in 2019.  You can be pretty sure no matter what I say, someone will figure out a way to criticize what I author here today.  Why didn’t I mention this plan or that plan.

Starting out in the “Medicare” business about 20 years ago I’d like to think I have creditable experience worth considering.  Talked to more than a fair share of seniors in that time as well.  So here I go with our recommendation of what Medicare Supplement plans you should be taking a close look at.

Original Medicare and a Med Supp

First thing to remember.  You will need to have Original Medicare, both Parts A and B before applying for a Medicare Supplement policy.  Please understand and take note… Medicare Advantage (Part C) is not Original Medicare.  It is a subsidized private plan offered as a similar, but alternative only.  Medicare Supplements (Medigap plans) do not work with Part C.  Sometimes the slang term Med Supp may be used to describe a Medicare Supplement/Medigap Plan.  These term all represent the same thing.

With Original Medicare, the government will pay 80% of Medicare approved charges.  The remainder 20% is your responsibility.  Most people take out a Medicare Supplement sold by many private insurance companies which can pay the remaining 20% of those Medicare approved charges.  Remember, the key here is…Medicare must approve the service or no Medicare Supplement will pay anything regardless of benefits.

All Medicare Supplements have a plan letter label from “A to N.”  Plan F, G, N are the typical 3 we suggest.  Why?  Benefits!!  Actually, most of the other plans are very expensive for what you get and leave you with great financial exposure.  That is not the goal of a good independent agent…leaving you “exposed” financially.  Now, as a senior, you probably realize you will not be healthy as a horse all your life.  As an agent and advisor, I have never, ever heard “I won’t need that much coverage” or “I bought too many benefits!!”

Medicare Supplemental Coverage Is Standardized

When I first started helping folks obtain Medicare Supplement policies back in the late 90’s, Medicare had just simplified the actual comparison of medicare supplement policies by creating uniformity in the industry.  In 1992, Medicare Supplemental coverage was standardized.  All offerings had to conform to specific Medicare approved designs only.  Since 1992, Medicare Supplemental plans are identical from company to company based on a standardized plan letter (A-N).  Now you know exactly what you are going to get for your money. Medicare took the guessing out of purchasing and/or changing from one insurance company to another.  An apples to apples comparison was made very simple.

While “standardization” and plan letters allow an apples to apples comparison, what you should know is that the premiums from company to company can vary, even drastically.  So, why is this you ask?  There are a few different reasons.  Most are beyond the scope of this post.  The easiest to understand is that some insurance carriers just have more rigorous underwriting standards.  In other words, they are pickier about who they will take based on their particular health questions.  As a result, the carrier can expect a lower claims ratio on their particular policies.  This can transfer into a lower cost for you in the short and/or long term.  For example, qualifying for coverage with AARP (United Healthcare) is a lot easier than qualifying for a policy with Aetna or Cigna.  Guess which one of those carriers is the most expensive as a general rule?

What is The Best Rated Medicare Supplement Plan?

While “best” is a relatively loose term, there are some Medigap plans that just stand out.  Some of these plans have been well rated by seniors for years.  Most people on Medicare will have one the 3 I’m about to reveal to you, right now.

Plan F, The Most Popular Medigap Plan

Plan F for years has been the most popular plan.  It is fully comprehensive in coverage and picks up all your Medicare approved healthcare bills and offers no work on your part.  All deductibles and co-payments required by Medicare itself are covered by the plan.  Problem is…you pay a good deal extra to have the administrative work done.  Quite a bit more than you will get back if you need “full” coverage.

On January 1, 2020, Plan F will no longer be available to those turning 65 and going on Medicare.  For those who are already grandfathered in, the Plan F will still be available.  This will result in a aging population in the Plan F.  With age comes more medical conditions on average. This inevitably poses higher risks to the insurers and will likely result in larger than normal rate increases in the future.  While certain states actually restrict insurers from raising premiums on one Medigap plan (Plan F is this case), it is something also to be mindful of especially if on a smaller and or fixed income.

The G Plan…Best Alternative for Medicare Supplemental Coverage?

Plan G has become much more popular in recent years.  Since Medicare announced that Plan F would be unavailable to those turning 65 as of 1/1/2020, most reputable agents have seen its value.  This is has been one of my top two Medicare Supplements recommendations for almost 20 years.  It is much more cost effective and earned the “best value seal” from this office a long time ago.  My former deceased associate/co-owner, Kenneth Craig carried Plan G on himself thru his Medicare years.  It has always delivered more affordable premiums and near top flight coverage for seniors.  You just plain “get more out” of a Plan G than the Plan F for the cost of coverage.  Plan F just offers a bit more convenience at a considerably higher cost.  As of 2018, you would have to pay $183 dollars to Medicare for the Part B annual deductible with Plan G.  After that, all your Medicare approved claims will be paid in full.

Last but not least… Medicare Supplement Plan N.

This is the most cost effective supplement to consider in 2018.  While there are some co-payments for outpatient visits, the coverage is still very good protection from high out of pocket expense.  Be aware that you pay the first $183 (in 2018) Part B deductible to Medicare for your outpatient care such as…your doctor, physical therapy (for example) each year.  On Plan N, you will also have to pay a $20 co-payment for these types of visits each time.  A trip to the ER, could result in a $50 co-payment per visit if you are not admitted to the hospital.

After satisfying all the above, Plan N will pick up any other Medicare approved amount unless the outpatient provider does not accept Medicare as payment in full.  By law, those particular providers may charge up to 15% additional.  While most providers accept Medicare “Assignment” some do not.  This can even include an ambulance services, doctors office, PT or Oxygen providing companies.  With that said, it is not too often that “Part B Excess Charges” are experienced.  Over 90% of Medicare participating doctors accept the Medicare approved amount as payment in full  Just be mindful, that excess charges are possible with the N Plan.

Now, question yourself if you want protection against that exposure or it you do not like paying co-payments for every visit. If you don’t like the sound of this, this is where you step away from the Plan N.  Your solution is going to be either Plan F or G.

One Last, Sometimes Hidden Gem…High Deductible Plan F

Ok, this one is a bonus, but it is not for everyone.  Depending on where you live… coastal areas, Florida, New York for example are prime areas to take a good look at the rates on the Plan F High Deductible.  Sometimes it is a real good option, especially for those who have a good health history.  In 2018, the “upfront deductible” you pay before supplemental benefits “kick in” is $2200.  Key here is the premium savings versus top plans mentioned previously.

Final Thoughts…

Is Medicare Plan G better than Plan F?  No, but it currently is a better value financially.  The rest of it is all opinion based on your needs, wants and budget.

If an actual poll was taken of seniors I have worked with over the years and by the shear numbers of Plan F, Plan G and Plan N that have been purchased across the country, the best rated Medicare Supplement plans have just been reviewed for you.   

Even by strictly numbers, rather than the opinions of many seniors, the top 3 Medicare Supplements in order are then Plan F, Plan G and Plan N.

Remember, it is the plan that defines the limitation of your benefits.  No insurer pays better than another.  This is the nature of the Medicare system.  All plans were standardized and are strictly controlled by the government to assure seniors of their benefits and aid in making the best decision for their healthcare needs.

With the new MACRA laws taking effect January 1, 2020, some hard choices will have to be made by seniors.  That law will affect the availability of Plan C and F to new Medicare recipients as well requiring guarantee issue allowance for Plan G and Plan D.

We are suggesting taking a hard look at Plan N for the long run.  While Plan G offers the best value, adding in people that have not been medically underwritten to this plan will result in higher rate increases in several states than that of the past.  The low rate increases versus the comprehensive coverage of the G Plan has always been its strength.

Medigap Plan C and F were normally accepting those guarantee issue cases which was part of why the rate increase on Plan F was more than Plan G.

Plan G will become to new “BMW” as of January 1, 2020 and with it, soak up a good number of unhealthy people due to guarantee issue regulations imposed by Medicare.

If you are still not sure you understand your Medicare options, you might want to go here to get up to speed on how your Medicare choices affect you.

While these plans may still be the best rated Medicare supplement plans, there are underlying factors which will change the availability, rates and opinion of the Medigap plans.

Make sure you are working with a Medicare specialist when trying to obtain coverage.  The new MACRA laws are going to make things a bit rocky over the next few years.  Make sure you have good representation for your benefits.

Further, the lowest price on a Med Supp does not mean a good deal for you long term.  Whether you are turning 65 pretty soon and need coverage or you feel are being overcharged by your current insurance company and need a change, working with a seasoned specialist who knows the market can offer optimal service for you.

If you have any further questions or if we can be of assistance, don’t hesitate to call.  We are here to help.  269-244-3420

Maple Valley Insurance Group

As an independent, senior Medicare Plan and Life Insurance agency, we are dedicated to helping you make an educated choice on your benefits. We're here when you need us.

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