Medicare supplement insurance, also called Medigap, helps individuals who have Medicare Parts A and B manage the costs of medical treatment by covering services that Medicare does not cover: deductibles, coinsurance and copayments. Anyone with Medicare Part A and Part B can purchase a Medigap plan for a monthly premium so they aren’t financially responsible for the high costs of a medical emergency. Medigap, however, does not work with Medicare Advantage plans.
By federal law, Medigap insurance plans are standardized between insurance companies. Since policy coverage will be the same no matter which company a consumer chooses. Medigap buyers should familiarize themselves with extra benefits and unique services an insurance company can offer to policyholders.
Top 6 Best Rated Medicare Supplemental Insurance
Mutual of Omaha was has been working with Medicare coverage for 50 years, and the company currently sells Medicare supplement insurance in more than 30 states. Individuals with multiple Mutual of Omaha policies receive a discount.
|Read 31 Reviews|
AARP Medicare Supplement Insurance is a UnitedHealthcare plan that AARP endorses. Consumers can choose the AARP UnitedHealthcare plan that best meets their medical needs and budget.
|Read 142 Reviews|
Physicians Mutual has been in business for over 100 years. They originally sold health insurance to those in the medical field. They now offer multiple types of insurance, including Medigap policies, to the general public.
|Read Expert Review|
Transamerica was established in its current form in the early 1950s and offers several financial tools, life insurance policies and supplemental health coverage. The company is a part of Aegon and is headquartered in Maryland.
|Read Expert Review|
State Farm is a large mutual company that sells a wide variety of insurance products, including Medicare supplement insurance. The company was established in 1922 and is headquartered in Illinois.
|Read Expert Review|
Cigna has roots going back two centuries and has been in business under its current name since the 1980s. The company serves over 15 million health insurance customers and offers several types of Medicare-associated coverage.
|Read Expert Review|
What are the features to consider when selecting an insurance company?
Medicare supplement insurance plans are standardized by law and are named with letters. The standardization means that every company’s Plan A offers the same coverage, but not all companies sell every plan. And sometimes companies offer different plans in different states.
- Plans by company: If you want to purchase coverage from a specific company, start by looking at the plans that company sells in your area.
- Plans by type: If you are more concerned with the coverage provided than the company selling it, start by looking at plans and then determine which companies offer those plans in your area.
- Plans by geography: Medigap policies are standardized in a different way in the so-called waiver states of Massachusetts, Minnesota and Wisconsin.
Maximum out-of-pocket expenses and deductibles are standardized between companies. However, the monthly price may vary greatly between companies depending on your age, where you live, discounts and medical underwriting. To make sure a plan is financially beneficial, multiply the monthly premium by 12 and add any out-of-pocket cost you may need to spend. Weigh that cost against the chance you’ll spend more than that amount on healthcare if you do not have supplement insurance.
- Monthly premium: Monthly premiums for the same policies are not standardized the way coverage is, so consumers should get multiple quotes before enrolling in any policy.
- Discounts: Some companies offer discounts for paying your premium in full annually, for enrolling when you’re 64 or 65 and/or for having multiple policies with the same company. Consider getting quotes from companies you already have policies with, and ask the agent if discounts exist for current customers.
Because coverage is the same regardless of which provider you select, a company’s customer service is an important factor to consider when selecting a new Medigap provider.
- Available hours: Look at the hours when you can reach customer service representatives by phone. Make sure the contact information and hours for customer service representatives or agents, not just sales representatives, are listed.
- In-person availability: If you would prefer to work with someone in person, ask about local agents. Some companies let you place a request for a local agent to contact you, so you only have to submit your information and then wait to be called.
- Existing relationships: If you already have a policy with a company you like, you may wish to talk to the agent who manages your current insurance. They may be able to tell you about special discounts.
A company’s reputation may help you choose between insurers with similarly priced plans.
- Financial strength: Working with a financially stable company ensures that it will be able to pay for services long into the future , even if costs rise substantially or a disaster requires the company to pay for care for hundreds or thousands of policyholders. A.M. Best, Moody’s, Fitch and Standard & Poor’s are independent agencies that rate insurance companies’ financial stability. You can visit these agencies’ websites to see how they rate the financial stability of a specific company. Although many companies list a rating on their website, you can see the most reliable and recent rating on the independent agencies’ websites.
- Years in business: The amount of time a company has been in business can indicate that they have reliable business practices and good customer service. You may also wish to compare how long a company has offered Medicare supplement insurance.
- Recommendations: Ask friends and family members to tell you about their experiences with different insurance companies. Read online reviews to determine how the company deals with customers.
Some companies offer additional features and benefits for policyholders. Be aware, these extra features are not a part of the insurance so they could be changed or eliminated at any time during the policy term.
- Informational seminars: Some companies offer regular meetings and seminars to help customers understand insurance options and/or Medicare more generally. These seminars can help consumers make the best choice for their situation.
- Informational guides: Some companies send customers free pamphlets and other informational materials. These guides give consumers some guidance so they can ask agents specific questions.
- Healthcare perks: Some companies give customers free access to some healthcare services, like medical hotlines or preventative care discounts.
Other insurance offerings
Because companies may offer discounts for individuals who already own multiple policies with them, you may want to choose a company that sells several types of policies that interest you. A company’s other offerings may indicate how experienced they are in dealing with Medicare-related plans and/or people in your age group.
- Auto/home insurance: Companies that have an extensive number of products for protecting your home or automobile will likely offer multiple policies that meet your needs, so a multiple-policy discount would be easy to qualify for.
- Life insurance: Many companies that sell Medicare supplement insurance also offer life insurance policies. These companies might offer multiple policy discounts or might be accustomed to working with recent retirees.
- Health insurance: Companies that offer health insurance may be better at helping individuals choose Medigap policies that meet their needs.
When is the best time to buy?
The best time to buy a Medigap policy is during the Medigap open enrollment period. The period begins on the first day of the month in which you turn 65 or older and enrolled in Medicare Part B. Buying within the enrollment window means:
- Guaranteed issue: Insurance companies must sell you a policy.
- Pre-Existing Coverage: Pre-existing health conditions are covered.
- Can’t Be Charged More: Buying within the six-month window means people suffering from medical conditions can buy coverage for the same price as people without health issues.
- Switching Medigap: You can switch Medigap policies, but you risk a penalty if you don’t switch during the open enrollment window. People switch because they want to cheaper Medigap policy, or because they need more benefits.
What if you buy outside of the enrollment period?
If you apply for Medigap coverage after your open enrollment period, there's no guarantee that an insurance company will sell you a Medigap policy if you don’t meet the medical underwriting requirements, unless you're eligible due to one of the situations below:
- Disability: You’re under 65 and eligible for Medicare because of a disability or end-stage renal disease.
- Pre-existing conditions: Coverage for the pre-existing condition can be excluded if the condition was treated or diagnosed within six months before the coverage starts under the Medigap policy. After the six-month period, the Medigap policy will cover the condition that was excluded.
- Other insurance: If you have group health insurance through an employer or union, your Medigap open enrollment period will start when you sign up for Medicare Part B.
What are the different types of Medicare supplement plans?
All Medicare supplement policies
Medicare supplement insurance, also known as Medigap, is designed to cover some or all of the costs a patient is responsible for before Medicare Parts A and B will pay anything, copays required by Medicare Parts A and B and amounts over the maximum that Medicare Parts A and B will cover. The different Medigap plans are standardized between companies, meaning consumers will receive the same coverage for Plan A (or whichever plan they select) regardless of which company they buy it from. There are 11 plans, each designated by a different letter, and each one covers different things. (Medigap plans are not labeled with letters in Massachusetts, Minnesota and Wisconsin, so-called waiver states.)
Plan A covers additional days in the hospital after Medicare benefits are exceeded, copayments and coinsurance, hospice care and up to three pints of blood.
Plan B covers everything that Plan A does and also covers the deductible required by Medicare Part A.
Plan C covers everything that Plan B covers as well as the deductible required by Medicare Part B, 80 percent of medical care costs occurred when traveling abroad and the coinsurance for stays in skilled nursing facilities.
Plan D is the same as Plan C, but it does not cover medical care costs occurred when traveling abroad.
Plan F covers everything covered by Plan C and also covers any excess fees charged by a doctor or hospital that Medicare does not cover.
Plan F—High Deductible
The high deductible version of Plan F has the same coverage as the standard Plan F, but individuals must pay a high deductible, often over $2000, before the policy covers anything.
Plan G covers everything the standard Plan F covers except that it does not cover the Medicare Part B deductible.
Plan K covers additional days in the hospital after Medicare benefits are exceeded and 50 percent of the following: Part B coinsurance, up to three pints of blood, hospice care, coinsurance for skilled nursing facilities and the deductible for Part A.
Plan L covers the same things as Plan K, but it pays 75 percent on the services where Plan K pays 50 percent.
Plan M covers additional days in the hospital after Medicare benefits are exceeded, copayments and coinsurance, hospice care, skilled nursing facility coinsurance and up to three pints of blood. It also covers 50 percent of the Part A deductible and 80 percent of charges while traveling abroad.
Plan N is identical to Plan M, except it fully covers the deductible for Part A and requires a small copay for office visits and trips to the emergency room.
A type of Medigap policy which typically charges lower premiums so long as the policyholders uses approved networks of hospitals and doctors.
Who should consider purchasing Medicare Supplement Insurance?
Anyone reaching retirement age should begin researching health insurance options for those 65 and over. Deciding on a plan before turning 65 may allow some consumers to get special discounts.
Older seniors may wish to purchase Medicare supplement insurance if they’re concerned about paying for an unexpected medical need.
People with qualifying disabilities
Individuals with qualifying disabilities, usually those that make them eligible for social security disability, may be allowed to purchase Medicare supplement insurance before they turn 65.
Affinity Group Members
Affinity groups like AARP may offer members advantages if they buy Medigap through the organization.
What does the expert have to say?
UnitedHealthcare provides AARP branded Medicare supplement insurance. The AARP organization does not act as an insurer. Only members of AARP can enroll in this coverage.
- Best for AARP supplement insurance is best for AARP members.
Mutual of Omaha was founded in 1909 and began selling health insurance policies the following year. It administered Medicare parts A and B when the program started in 1966. Today, Mutual of Omaha offers a variety of supplement insurance policies for Medicare recipients so consumers can find a plan that fits their needs and budget.
- Best for Mutual of Omaha is best for those looking for a company with an extensive history of working with Medicare.
State Farm Insurance was founded in 1922 and is a mutual company, meaning it is owned by policyholders, not investors. The company holds more than 80 million insurance policies and offers more than 100 products, including Medicare supplement insurance.
- Easy to see options: Interested consumers can very quickly find which plans are available in their state from State Farm’s supplement insurance website by selecting their state from a drop-down menu. This action takes users to another page that lists available State Farm policies and gives them the opportunity to find an agent.
- Quote: State Farm’s website offers instant quotes for supplement insurance based on the potential customer’s age, residence location and tobacco use. Those interested in more information can have their information sent directly to an agent of their choice or a random agent in their area. The agent will contact them to discuss their options.
- Company size: State Farm offers a wide variety of other insurance products, so many customers who are interested in Medigap coverage will already have a relationship with a State Farm agent. Customers may find it easier to work with a single company for all their insurance needs.
- Best for State Farm is best for seniors, retirees and people with qualifying disabilities who want one company that offers multiple types of insurance.
Cigna Supplemental Benefits is a part of the Cigna family with policies underwritten by American Retirement Life Insurance Company and Loyal American Life Insurance Company. The company was established in 1982 and currently has more than 15 million health insurance customers.
- Other Medicare coverage: In addition to offering Medigap insurance, Cigna also sells Medicare Part D, or prescription drug coverage, and Medicare Advantage plans. Consumers cannot have both a Medigap plan and a Medicare Advantage plan, so Cigna agents can talk to interested consumers about the differences and which choice might be right for them.
- Customer service: Interested consumers can reach a customer service representative 12 hours a day on weekdays or live chat with them online during those same hours. Existing customers can also reach agents during extended business hours on weekdays or access their account online 24 hours a day.
- Best for Cigna is best for seniors, retirees and people with qualifying disabilities, especially those who want help choosing the best plan for them.
Physicians Mutual was founded in 1902 as a family business in Omaha, Neb. The company originally offered insurance only to medical professionals. Today, the company sells several types of insurance to the general public.
- Household discount: Individuals who live with someone else who has a Physicians Mutual life insurance policy or Physicians Mutual Medigap policy can receive a monthly discount on certain plans. Each person in the household will receive the discount.
- Quote: Interested consumers can instantly receive a quote by inputting some basic personal information into the quote tool on the company’s website. Those with additional questions can request an agent call them.
- Conversations: Physicians Mutual sends an e-newsletter, called Conversations, to all interested consumers once a month. It offers tips on healthy living, managing finances and more. Sign up is free on the company’s website.
- Medicare seminars: Those who are confused about Medicare options and private plans to supplement their Medicare coverage can attend one of Physicians Mutual’s free seminars. Experienced agents give informational presentations and are available for questions. Dates and locations can be found online.
- Best for Physicians Mutual is good for seniors, retirees and people with qualifying disabilities who want extra help choosing a plan or understanding Medicare.
Transamerica has roots going back to the beginning of the 19th century and took its current form and name in 1952. It became a part of Aegon N.V. in 1999. The company headquarters are located in Baltimore.
- Retirement solutions: In addition to Medicare supplement insurance policies, Transamerica also offers several financial services and retirement accounts. Product options include mutual funds, annuities, retirement accounts and more.
- Guaranteed acceptance: Customers who apply for a policy during open enrollment just before or in the six months following their 65th birthday are guaranteed to be approved for a Transamerica Medigap policy.
- Discounts: Transamerica offers discounts to individuals who enroll before they turn 65. Coverage does not begin until the customer’s 65th birthday, but they can purchase a policy in the three months preceding their birthday. The company also offers discounts for certain payment methods and/or payment schedules.
- Quotes: Interested consumers can get an instant quote online by entering some personal information into the company’s quote tool. The quote tool shows both standard and discounted rates for each available plan option.
- Best for Transamerica is best for retirees and people with qualifying disabilities who can pay their premiums semi-annually or who are 64 or 65.
Plans by state
Medicare supplement insurance plans are labeled with letters, and they are standardized by law. To learn about the differences between these plans, read our Types section. For example, Plan A offers the same coverage regardless of which company sells it. The plans each company offers vary by state. See below to find out what plans are available in your state.
Plan offerings may change, and some companies offer plans through third-party groups.
Minnesota, Massachusetts and Wisconsin have unique Medicare supplement plans that are different than the A-N options.
Cigna policies are sold by American Retirement Life Insurance and Loyal American Life Insurance.
Below, one of the plans is named F-HD. This means F-High Deductible.
Information in this guide is general in nature and is intended for informational purposes only; it is not legal, health, investment or tax advice. ConsumerAffairs.com makes no representation as to the accuracy of the information provided and assumes no liability for any damages or loss arising from its use.