Medicare doesn’t fully cover your healthcare; there are a few gaps. To ensure you’re receiving the best possible coverage, you need to understand the top Medigap plans for 2020.
A Medicare Supplement Insurance (Medigap) policy helps pay some of the health care expenses that the Original Medicare does not cover, like:
These policies are sold by private companies.
The most notable changes in Medicare 2020 are the removal of first-dollar medical coverage plans, which affects all beneficiaries due to switching the regulations around between people eligible before and after 2020.
But what exactly is Medicare? Well, let’s find out!
Medicare & Medigap
Ever since its establishment in 1965, Medicare was made to cover some of the health care needs of a retiree. “Original Medicare” typically includes 2 parts:
- Part A: Your hospitalization coverage, and
- Part B: Outpatient and physician services.
Only a few selected services are covered, and the costs are generally shared between you and Medicare.
When signing up for your Medicare, you basically have 3 primary choices: You pay what Medicare does not cover from your pocket, purchase supplemental insurance like Medigap, or buy a one-size-fits-all policy known as a Medicare Advantage Plan.
As mentioned earlier, Medigap plans are sold by private insurance companies. These plans are recognized by capital letters, such as A, B, C, D, F, G, K, L, M, and N.
Now, each of these lettered plans— no matter the insurance company— must provide the same standardized features. Note that beneficiaries eligible for Medicare starting 01/01/2020, will not be offered Plans F and C. Beneficiaries already in Plans F C may continue their coverage as it is.
Which Plan Is Right For You?
Medicare Supplement plans, aka Medigap plans, cover the majority of your Medicare Part A and B out-of-pocket expenses like coinsurance and deductibles. Whether you prefer lower out-of-pocket costs or higher premiums, there’s a suitable Medigap plan for everyone.
Medigap is a term used to specify a certain Medicare Supplement Policy.
As mentioned, Medigap plans help cover coinsurance, copays, deductibles, and even extended hospital stays.
The right plans for an individual depend on the time he or she was first declared “Medicare eligible.”
For example, if the person was deemed “Medicare eligible” prior to January 1st, 2020, Plan F, High Deductible Plan F, and Plan G will be their best options.
On the other hand, if he or she is new to Medicare and wasn’t eligible for enrollment until after January 2020, Plan G and Plan N, perhaps even High Deductible Plan G, are most likely what they need.
Note that Plan N is a perfect plan for everyone, no matter when they were first declared Medicare-eligible. For our top 3 picks, however, we only added this plan to one of the following lists.
That said, let’s help you choose the best Medigap plan for your needs.
Medigap Plans: Top 3 Plans for those Eligible for Medicare Before 2020
Medigap Plan F is the most comprehensive Medicare supplement plan.
Plan F covers Part B deductibles and everything else covered by Plan G. If making a monthly premium with no copays or deductible seems appealing to you, this plan will be beneficial.
It has complete benefits and provides sufficient privileges for people with continuing health conditions.
Plan F is recommended if you:
- visit the hospital and doctor’s office frequently
- often travel outside the USA, and/or
- are living in a state that allows excess charges.
Medicare Plan G, also known as Medigap Plan G, is an increasingly popular supplement for a couple of reasons.
For starters, Plan G coverage is similar to Plan F. It offers excellent value for a beneficiary who is willing to pay a small annual deductible.
Plan G also provides full coverage for all the gaps in Medicare. It will pay for your hospital deductible, coinsurance, and copays.
We recommend Plan G if you:
- want rate increases
- don’t need to surprise out-of-pocket hospital expenses
- love traveling outside the US, and/or
- are living in a state that allows excess charges.
High Deductible Plan F
As the name implies, High Deductible Plan F offers the same coverage as Plan F, except only after you pay the annual deductible amount of $2,340 in 2020. Upon meeting this deductible, you will have the same coverage as Plan F.
High Deductible Plan F has higher out-of-pocket costs; although, you could expect a relatively lower premium.
This plan is highly recommended if you:
- are looking to get a lower premium
- want comprehensive coverage, and/or
- need peace of mind in terms of your medical expenses.
That said, it’s important to note that High Deductible Plan F is considered first-dollar coverage. It will not be accessible to people who are new to Medigap in 2020.
Medigap Plans: Top 3 Plans for those Eligible for Medicare After 2020
As of now, MACRA no longer allows first-dollar coverage with any Medigap plans for newly eligibles. Therefore, the top policies may seem a little different from the previous year.
The current MACRA law:
- Prohibits newly eligible beneficiaries from obtaining a Medicare supplement plan that pays for Part B deductibles, meaning Plan C and Plan F can no longer be sold to newly eligibles. Those enrolled in Plan C and Plan F before January 1, 2020, may keep their plan.
- Makes Plan D and Plan G the Guaranteed Issue Plans for newly eligibles for specified periods under the current law labels Plan C or Plan F for current beneficiaries.
That said, the top 3 plans for those eligible for Medicare after 2020 are:
- Plan G
- Plan N
- High Deductible Plan G
Since we already talked about the usual Plan G above, let’s break down the other two:
Medicare Plan N is a supplemental policy that usually has lower premiums while you pay your excess charges, Part B deductible, and some copayments for doctor and emergency visits
It offers similar benefits to other Medicare plans like Plan F but usually costs less.
So, Plan N could be beneficial if you:
- are looking for a low monthly premium
- don’t mind small copayments, and/or
- aren’t bothered with excess charges.
High Deductible Plan G
High Deductible Plan G is the new replacement for High Deductible Plan F and is currently available to all beneficiaries.
Beneficiaries who became eligible for Medicare on or after 01/01/2020, High Deductible Plan G is available for them. This plan is similar to High Deductible Plan F; however, it doesn’t cover your Part B deductible.
Therefore, you can opt for this plan if you:
- want the same benefits of Plan G
- don’t mind keeping up on your deductible expenses
By federal law, High Deductible Plan G and F have a $2,340 deductible for the year 2020. Medigap plans sold to new people with Medicare are no longer allowed to cover the Part B deductibles. As a result, Plan C and Plan F are no longer available to those new to Medicare.
However, Plan F, Plan G, and High Deductible Plan G (even Plan N)— these all show a promising future for Medigap plans.
By keeping the above factors in mind, as well as keeping up with the changes in 2020, seniors can better navigate the confusing world of Medigap plans.