- Enrollment: To avoid what could be high out-of-pocket costs if you need care, you should sign up for a Medigap plan through a private insurer at the same time you enroll in traditional Medicare. You will then be fully covered for medical and hospital care. (Your local area agency on aging, www.eldercare.gov, can provide you with a list of Medigap insurers in your state.You also can call your local State Health Insurance Assistance Program (SHIP) for free assistance choosing a Medigap policy. And, you can go to Medicare.gov for Medigap options in your state.) If you wait to buy Medigap insurance, you might not be eligible to get it right away and, in many states, your premium will be based on your health status. (N.B. You cannot buy a Medigap plan to fill gaps in coverage in a Medicare Advantage plan,)
- Choice: You have a choice of many different Medigap plans lettered A through N. Every plan covers basic gaps in traditional Medicare coverage, including gaps in medical and hospital coverage and 365 days of additional hospital coverage. Plan A is the most stripped down of the plans but does cover the basics, including the 20 percent coinsurance for doctors’ services. Other plans fill additional coverage gaps. Most people do well buying Plan C, which covers all your basic needs. Plan F is also popular and covers a little more.
- Standardization: With Medigap coverage, the gaps filled by plans A, B, C, D, F, G, K, L, M, N, will be the same no matter which insurer you buy the coverage from. (Keep in mind that these lettered plans are different from Medicare Parts A, B, C and D.) These plans can be compared on price alone.
- Premiums: Premiums can be based on the age at which you buy the policy (issue-age rated), your current age (attained age-rated) or the cost of providing the coverage to everyone in your area (community-rated). Community-rated premiums will be the same for everyone in your area no matter what age you buy the policy, so they tend to cost more at 65 and less later in life. The lowest priced policy at 65–usually the age-rated policy–will likely not be the lowest priced policy over time.
Choose your Medigap plan carefully. The cost of a policy can vary considerably, depending upon the insurer from whom you buy the policy and how the premium is calculated.