Find Out If a Medicare Supplement Plan Is Right for You

Choosing the right Medicare coverage is an important decision, especially when you're trying to protect both your health and your retirement savings.

Original Medicare provides valuable coverage, but it doesn't pay for every healthcare expense. Deductibles, coinsurance, and other out-of-pocket costs can still leave you with unexpected medical bills.

That's where Medicare Supplement insurance, also known as Medigap, may help.

But is a Medicare Supplement plan right for you?

The answer depends on your healthcare needs, budget, travel habits, and how much financial predictability you want during retirement. In this guide, we'll explain how Medicare Supplement plans work, what they cover, their potential advantages and disadvantages, and what to consider before choosing one.

What Is a Medicare Supplement Plan?

A Medicare Supplement plan is private health insurance designed to work alongside Original Medicare (Medicare Parts A and B).

Original Medicare pays its share of approved healthcare expenses first. Your Medicare Supplement policy can then help pay certain remaining costs, depending on the plan you select.

These expenses may include:

• Medicare Part A coinsurance

• Medicare Part B coinsurance or copayments

• Certain hospital costs

• Skilled nursing facility coinsurance

• Blood-related expenses

• Certain foreign travel emergency expenses

The exact benefits depend on the Medigap plan you choose.

Why Do People Buy Medicare Supplement Insurance?

One of the biggest reasons people choose Medicare Supplement insurance is greater predictability when it comes to healthcare expenses.

Original Medicare doesn't have a general annual out-of-pocket maximum for Part A and Part B services.

If you require frequent medical care, those costs can potentially add up.

A Medicare Supplement policy can help reduce some of that financial uncertainty by covering certain expenses that Original Medicare leaves behind.

Is a Medicare Supplement Plan Right for You?

A Medicare Supplement plan may be worth considering if several of the following situations apply to you.

You Want More Predictable Healthcare Expenses

Some retirees prefer knowing they'll pay a monthly premium in exchange for potentially fewer unexpected Medicare-related expenses.

If budgeting and predictability are important to you, Medigap may be worth considering.

You Frequently Visit Doctors or Specialists

People who regularly receive medical care may benefit from having additional coverage for certain Original Medicare cost-sharing expenses.

This could be particularly important if you:

• Visit specialists regularly

• Receive ongoing treatments

• Have frequent diagnostic tests

• Expect significant healthcare needs

Your individual medical situation should always be considered when comparing coverage.

You Want Flexibility When Choosing Doctors

With Original Medicare and a Medicare Supplement plan, you can generally see any healthcare provider in the United States who accepts Medicare.

This can be attractive to retirees who don't want to rely on a Medicare Advantage plan's provider network.

Always confirm that a healthcare provider accepts Medicare before receiving care.

You Travel Frequently Within the United States

If retirement means spending part of the year in another state, traveling around the country, or visiting family frequently, provider flexibility may be especially important.

Because Medigap works with Original Medicare, you're generally not limited to a local Medicare Advantage provider network for Medicare-covered services.

That can make Medicare Supplement coverage appealing to frequent travelers and "snowbirds."

You Want Some Protection While Traveling Internationally

Original Medicare generally provides very limited coverage outside the United States.

Certain Medicare Supplement plans include limited foreign travel emergency benefits, subject to plan rules and coverage limits.

If international travel is part of your retirement plans, this may be an important feature to consider.

What Doesn't Medicare Supplement Insurance Cover?

It's equally important to understand what Medigap isn't designed to cover.

Medicare Supplement plans generally don't cover:

• Long-term custodial care

• Routine dental care

• Routine vision care

• Eyeglasses

• Hearing aids

• Private-duty nursing

Medigap policies sold today also don't include outpatient prescription drug coverage.

If you choose Original Medicare with a Medicare Supplement plan and want prescription coverage, you'll generally need to consider a separate Medicare Part D plan.

Medicare Supplement vs. Medicare Advantage

One of the most common Medicare questions is whether to choose a Medicare Supplement plan or Medicare Advantage.

These aren't the same type of coverage.

Medicare Supplement insurance works alongside Original Medicare.

Medicare Advantage, also called Medicare Part C, is an alternative way to receive your Medicare Part A and Part B benefits through a private insurance company approved by Medicare.

Medicare Advantage plans may offer additional benefits and often include prescription drug coverage. However, they may also use provider networks and have different copayments, coinsurance, deductibles, and prior authorization requirements.

With Original Medicare plus Medigap, beneficiaries may have greater flexibility in choosing Medicare-accepting providers, but they'll generally pay an additional monthly premium for their Medicare Supplement policy.

Neither option is automatically better for everyone.

The better choice depends on your individual circumstances.

What Are the Most Popular Medicare Supplement Plans?

Medigap policies are standardized in most states and identified by letters.

Two options you'll commonly hear about are Medicare Supplement Plan G and Plan N.

Medicare Supplement Plan G

Plan G offers extensive coverage for many of the gaps left by Original Medicare.

Beneficiaries are still responsible for the Medicare Part B deductible, but after that, Plan G can provide substantial protection against many Original Medicare cost-sharing expenses.

Medicare Supplement Plan N

Plan N may have lower premiums than Plan G in some areas, but beneficiaries may have certain copayments and other out-of-pocket responsibilities.

The right choice isn't necessarily the plan with the most benefits.

Instead, compare premiums with the amount of healthcare you expect to use and the level of financial predictability you want.

How Much Does Medicare Supplement Insurance Cost?

There isn't one universal Medicare Supplement price.

Premiums can vary depending on factors such as:

• Insurance company

• Plan selected

• Where you live

• Age

• Tobacco use

• Available household discounts

• How the insurance company prices its policies

Because standardized Medigap plans with the same letter generally provide the same basic benefits regardless of insurance company, comparing premiums and insurers can be worthwhile.

Don't automatically assume the most expensive policy provides better standardized medical benefits.

When Is the Best Time to Buy a Medicare Supplement Plan?

For many people, the most important time to consider Medigap is during the Medicare Supplement Open Enrollment Period.

This six-month period generally begins the first month you have Medicare Part B and are age 65 or older.

During this period, insurers generally can't use medical underwriting to deny you a Medigap policy or charge you more because of your health.

After this enrollment period, your ability to purchase or switch Medicare Supplement coverage may depend on medical underwriting unless you have certain guaranteed-issue rights or additional protections under state law.

That's why understanding your options when you first become eligible can be especially important.

Can You Switch to a Medicare Supplement Plan Later?

Potentially—but don't assume you'll always be able to switch whenever you want.

Someone enrolled in Medicare Advantage may decide later that they prefer Original Medicare with a Medicare Supplement policy.

However, depending on when and why you're switching, an insurance company may be permitted to use medical underwriting for Medigap coverage.

Certain situations provide guaranteed-issue rights, but the rules can be complicated.

Before dropping existing coverage, make sure you understand whether you'll be able to obtain the new coverage you want.

Questions to Ask Before Choosing a Medicare Supplement Plan

Before making a decision, ask yourself:

How frequently do I use healthcare?

Someone who visits doctors regularly may have different priorities than someone who rarely needs medical care.

How important is provider flexibility?

If being able to see Medicare-accepting doctors throughout the country matters to you, Original Medicare with Medigap may be attractive.

How much can I comfortably spend each month?

Medigap adds another monthly premium to your retirement expenses.

Do I travel frequently?

Frequent domestic or international travelers should consider how their healthcare coverage works away from home.

Do I take prescription medications?

Remember that modern Medigap policies don't include outpatient prescription drug coverage. You may need a separate Part D plan.

How comfortable am I with unexpected healthcare expenses?

Some people are comfortable accepting more potential out-of-pocket expenses in exchange for lower monthly premiums. Others prefer paying more each month for greater predictability.

Pros and Cons of Medicare Supplement Plans

Potential Advantages

A Medicare Supplement plan may provide:

• More predictable healthcare expenses

• Coverage for certain Original Medicare cost-sharing

• Broad access to healthcare providers who accept Medicare

• No traditional HMO or PPO provider network for Original Medicare-covered services

• Potential foreign travel emergency benefits with certain plans

• Greater peace of mind about unexpected Medicare expenses

Potential Disadvantages

Consider that:

• You'll pay an additional monthly premium

• Prescription drugs aren't included

• Routine dental, vision, and hearing benefits generally aren't included

• Premiums may increase over time

• Getting coverage later may involve medical underwriting in some circumstances

Understanding both sides can help you make a more informed decision.

So, Is a Medicare Supplement Plan Right for You?

A Medicare Supplement plan could be a good fit if you value provider flexibility, predictable healthcare expenses, and additional protection from some of Original Medicare's out-of-pocket costs.

It may be particularly appealing if you travel frequently, see doctors regularly, or simply want more certainty when budgeting for healthcare during retirement.

However, Medigap isn't necessarily the best option for everyone.

Your budget, prescriptions, doctors, healthcare needs, location, and personal preferences should all be considered.

The goal shouldn't be to find the Medicare plan that sounds best in an advertisement.

The goal is to find coverage that makes sense for your healthcare needs and retirement goals.

Get Help Comparing Your Medicare Supplement Options

Medicare can be confusing, and there are many factors to consider before choosing coverage.

At Sentinel Retirement Services, we help individuals understand their Medicare options, compare available coverage, and make informed decisions about their healthcare during retirement.

Whether you're turning 65, currently enrolled in Original Medicare, or considering changing your coverage, we're here to help.

Contact Sentinel Retirement Services today to review your Medicare Supplement options and find out whether a Medigap plan may be right for you.