Medicare Supplement Plans: The Advantages and Disadvantages

Medicare Supplement plans enhance the coverage offered by Original Medicare. They can reduce out-of-pocket medical expenses by covering the costs the original plan doesn’t cover.

Understanding the pros and cons of these plans can help you make an informed decision on whether they’re worth purchasing. 

Advantages of a Medicare Supplement Plan: 

Cover Out-of-Pocket Costs: 

Original Medicare has costs like deductibles, copayments, and coinsurance that can substantially increase your healthcare expenses.

Medicare deductibles are standard, but copayments and coinsurance rates can vary depending on the length of a hospital stay and your total healthcare costs.

Without a supplement plan, a serious injury or illness that requires prolonged care can result in bills that you are responsible for paying.

A Medigap policy can reduce or eliminate these out-of-pocket costs depending on your chosen plan. Plans A, B, C, D, G, K, M, and N can reduce your costs substantially.

Plan F has the highest coverage and can eliminate your costs entirely, but might have more expensive monthly premiums.

People who became eligible for Medicare after 2020 can benefit the most from Plan G because they won’t be eligible for Plan F.

The annual Part B deductible of $226 in 2023 is the only out-of-pocket payment you’ll be expected to make if you choose Plan G. 

Large Provider Network:

You can use your Medigap policy to visit any medical professional that accepts Medicare. Over 90% of medical professionals in the United States accept Medicare, so you don’t have to settle.

Some Medicare Advantage plans have a limited healthcare network, restricting their clients to only a few medical professionals, or charging more for seeking care outside the network.

Individuals with Medicare Advantage plans should seek prior authorization when seeing specialists outside their networks.

Open Enrollment: 

Medicare Supplement plans have a six-month open enrollment period. During this period, an insurer can’t reject or deny your application.

The open enrollment period begins when you turn 65 and enroll for Medicare Part B. This means you can qualify for a Medigap policy regardless of your health status.

If you wait to enroll, depending on your situation, you might need to go through medical underwriting to get a Medigap plan.

Predictable Premiums: 

With Medigap policies, insurers inform clients of their monthly premiums in advance. With Original Medicare alone, you may not be sure what your medical expenses will be, as out-of-pocket costs vary with the type of treatments received. 

Standardized & Renewable Coverage 

All Medigap plans are standardized by the U.S. government. They offer the same coverage to recipients in all 50 states. Medigap plans are also guaranteed renewable.

Insurers can’t cancel your policy if you use it too much or if your health deteriorates. Your medical needs will be covered as long as you pay your monthly premiums on time.

Additional Services 

A Medicare Supplement Insurance plan can pay for healthcare received outside of the U.S. in some situations. International care is something Original Medicare doesn’t cover.

If you’re a frequent traveler, consider buying a Medicare Supplement plan that  can cover up to 80% of foreign medical care costs within their individual plan limits. 

Disadvantages of Medigap Plans

Selective Approval 

Insurance companies aren’t obligated to approve applications made after an individual’s open enrollment period. This means your application could be subject to medical underwriting.

Your insurer can reject or deny the application based on your current health condition, medical history, and age. You can avoid this by applying for Medigap during your open enrollment period.

High Premiums 

Medigap policies are offered by private insurers, so they can charge a high premium amount if they view you as a high-risk client. You can avoid this by applying during the open enrollment period. Insurers can’t charge you more because of your health issues during this time. 

Limited Benefits 

While Medigap Plans can help cover some of Original Medicare’s out-of-pocket costs, they do not cover everything. For example, some plans don’t offer prescription drug coverage. If you want your prescriptions covered, you’ll need to enroll in a Medicare Part D plan. No Medigap plans provide dental or vision benefits. 

Complicated Options 

It may be difficult to understand Medigap because Plans A to N offer varying degrees of coverage. For example, Plan A offers basic coverage and covers fewer medical expenses than more comprehensive options like Plan F, G, and N. For a simple way to look at it, generally speaking, you’ll want to go with Plan G. But everyone’s situation is different. Find a reputable Medicare agent to help you understand which plan is best for you. 

Find Medicare Supplement Plans Today 

The advantages of Medicare Supplement plans outweigh their disadvantages. Apply for a plan during your open enrollment period and seek the help of a licensed Medicare agent. These plans can help you save money and secure your right to healthcare services from a wide network of medical professionals.