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How to Choose Medicare Supplemental Insurance
by Marie Kaye
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Overview
Medicare beneficiaries choosing a Medicare supplemental insurance plan (or "Medigap") will find that when it comes to choosing the best policy, one size does not fit all. Personal considerations such as health and financial status can be as important in selecting a policy as comfort with a particular insurer. Choose a Medicare supplement with an eye toward the long haul. Switching plans to accommodate increased health expenses can be costly or even impossible.
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Step 1
Set goals and expectations. Before looking at particular plans or insurers, answer the following questions to guide the decision toward the best policy at the best price:
1. How much of a monthly premium can you afford?
2. What benefits do you expect to need?
3. Do you have funds to cover a pre-existing-condition exclusion or waiting period? If so, for how long?
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Step 2
Determine whether your former employer or union offers retiree health benefits. This can be done by calling the employer's human resources department or the union membership office.
Medicare supplements through a former employer or union are often the best option, since the plans are usually free and the benefits are at least as good as a private Medigap policy.
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Step 3
Low-income Medicare beneficiaries may be eligible for assistance from their state Medicaid office to pay Medigap premiums. Consult the state Medicaid Information in the Resources section for Web site and other contact information for each state.
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Step 4
Find the plan type that suits your needs. The federal Medicare program regulates Medigap and has created 12 types of plans labeled A through L that private insurers can offer. Premiums will vary, but the plans are standardized, so that Medigap F offered by Insurer X is the same as Medigap F offered by Insurer Y anywhere in the country. Plan A is the "basic" Medigap. Plan F is the most popular.
The Medigap comparison in the Resources section provides details on each type of Medicare supplement.
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Step 5
Compare plans and insurers in your state to find the best Medicare supplement at the lowest premium. Some plans may have waiting periods or pre-existing-condition exclusions that could increase short-term health care costs.
Each state is responsible for regulating insurers operating in that state. The state insurance commission maintains information on the Medigap plans insurers offer, including premium information. Consult the state insurance office contacts in the Resources section. Alternatively, Medicare beneficiaries can obtain assistance from Medicare by calling 1-800-MEDICARE (1-800-633-4227).
