A Step-by-Step Guide
Choosing a Medigap policy might feel like a big decision, but you can do it. Let’s break it down into five clear steps to help you find the right fit for your needs and budget. This is where you can learn how to choose a Medigap policy that gives you confidence.
First, think about your personal healthcare needs. Everyone is different. Take a moment to consider your own situation. Ask yourself a few questions: How is my overall health? Do I have any chronic conditions that require frequent doctor visits? How important is it for me to have predictable, stable monthly costs? Do I travel outside of the country often? Some Medigap plans offer coverage for foreign travel emergencies, which could be important for you. Being honest about your health and lifestyle will help you narrow down your choices.
Second, learn about the most popular Medigap plans. For people newly eligible for Medicare, the two most popular choices are Plan G and Plan N. Understanding the difference between them is key. Let’s look at what is the difference between Medigap Plan G and Plan N.
Medigap Plan G is considered the most comprehensive option available today. It covers nearly all of your out-of-pocket costs, including your Part A deductible and your 20% coinsurance for Part B services. The only “gap” it doesn’t cover is the annual Medicare Part B deductible. Let’s use an example: In 2024, the Part B deductible is $240. With Plan G, you would pay this first $240 out of your own pocket for doctor visits or other outpatient care. After that, for the rest of the year, your Medigap Plan G is designed to cover 100% of the remaining costs for Medicare-approved services.
Medigap Plan N is another excellent option that usually has a lower monthly premium than Plan G. In exchange for that lower premium, you agree to share a little more of the costs. With Plan N, you will have to pay a small copayment of up to $20 for some doctor’s office visits and up to a $50 copayment for an emergency room visit that doesn’t result in you being admitted to the hospital. Plan N also does not cover what are called “Part B excess charges.” These are rare, but they can occur if a doctor does not accept the Medicare-approved amount as full payment and charges up to 15% more.
Third, decide which plan letter fits your budget and your comfort with risk. Your choice between Plan G and Plan N often comes down to this. If you prefer to pay a higher premium each month in exchange for very predictable healthcare costs with almost no surprise bills, Plan G is likely a great choice. If you are in good health, don’t visit the doctor often, and want to save money on your monthly premium, Plan N could be a better fit, as long as you are comfortable with the possibility of small copayments.
Fourth, it’s time to shop around and compare insurance companies. Remember, a Plan G is a Plan G, no matter which company sells it. However, the price you pay can vary significantly from one insurer to another. Get quotes from several different highly-rated insurance companies. When comparing prices, it’s also helpful to ask how they price their policies. Some companies use “attained-age” pricing, where your premium starts lower but goes up as you get older. Others use “issue-age” or “community-rated” pricing, which can be more stable over time.
Fifth, apply for your policy during your Medigap Open Enrollment Period. We mentioned this before, but it is the most important step of all. Once you’ve chosen a plan and a company, be sure to submit your application during that 6-month window after you turn 65 and enroll in Part B. You can apply directly through the insurance company’s website, over the phone, or with the help of a licensed, independent insurance agent who can help you compare multiple companies at once.
