Retirement: Frequently Asked Questions About Medigap Insurance Answered

By Kimberly Lankford, Kiplinger's Personal Finance | June 16th, 2017

Medigap Insurance Retirement Image

One of the challenges of signing up for Medicare at age 65 is to choose supplemental insurance to fill Medicare’s coverage gaps.

Q: Why do I need Medigap insurance?

A: Most people buy a Medicare supplement (Medigap) policy to pay deductibles and co-payments, plus Part D prescription-drug coverage, because Medicare generally doesn’t cover drugs. Or you can sign up for a private Medicare Advantage plan, which provides both medical and drug coverage.

Medigap policies are sold by private insurers and come in 10 standardized versions (A through D; F; G; and K through N). Every Medigap plan with the same letter designation must provide the same coverage, even though prices can vary by insurer. You can use any doctor or facility that is covered by Medicare. Many state insurance departments have Medigap price lists by insurer (go to www.naic.org and click “map” for links).

Part D prescription-drug plans are sold by private insurers and have average premiums of $34 per month. You can compare premiums and out-of-pocket costs for your drugs under each Part D plan in your area at www.medicare.gov/find-a-plan.

To shop for a Medicare Advantage plan, go to www.medicare.gov/find-a-plan. For an analysis of the best values based on typical costs for people in good, fair and poor health, go to www.medicarenewswatch.com.

Q: I’ve been paying high premiums for my Medigap Plan F. Can I switch to another policy to save money?

A: Maybe. There’s a huge price range for Medigap policies, but depending on your health and the state where you live, your options may be limited. Insurers cannot reject you or charge more because of pre-existing conditions if you buy a Medigap policy within six months of signing up for Medicare Part B. But after that, your health can affect your costs and coverage options. If you’re still healthy, you may qualify for a better deal with another insurer.

Some insurers will let you switch to a less-comprehensive policy without medical underwriting — for example, to high-deductible Plan F, for which you pay a $2,200 deductible in 2017 before Medigap coverage kicks in. Median premiums are $610 per year for a 65-year-old man, compared with $2,184 for the standard Plan F, according to Weiss Ratings. Plan N has coverage similar to that of standard Plan F, but you pay the Part B deductible ($183 in 2017) and a $20 co-payment for each physician visit, as well as $50 for emergency-room visits. Median premiums are $1,448 per year. Your state may offer special opportunities to switch, regardless of preexisting conditions. (Learn more from your state health insurance assistance program at www.shiptacenter.org, or call 800-633-4227 for contacts.)


Kimberly Lankford is a contributing editor to Kiplinger’s Personal Finance magazine. Send your questions and comments to moneypower@kiplinger.com. And for more on this and similar money topics, visit Kiplinger.com.
(c) 2017 Kiplinger’s Personal Finance; Distributed by Tribune Content Agency, LLC.

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