How to Choose the Best Medicare Supplement Plan

3 min

This is one of the most common questions people approaching their senior years ask. What is the Best Medicare Supplement Plan? How to Pick the Best One? Well, let’s start with the bad news first. There is no one size fits all answer. But the good news is that you can pick from different options and make it tailor-made for your needs and budget.

To put it simply, you need to understand your coverage needs and budget, sign up during the enrolment period, explore any potential discounts, and pick the Medicare Supplement plan. Let’s talk in-depth about each step.

Step 1 – Understand your coverage needs

This is the hardest step of all. Do you know what you need? A lot of people do not have an idea about what they need. Start with the level of coverage you want.

Medicare Supplement plans help with some out-of-pocket costs that the Original Medicare doesn’t cover. Those include coinsurance, deductibles, copayments, and more. Most states offer 10 different plan types, labeled A through N. Yet, some states like Michigan do not allow all plans.

The good news is that companies sell standardized plans. That means Part A in Company 1 will carry the same benefits as Part A in Company 2.

Now comes the hard part. And that includes thinking and analyzing honestly what you want and what you need. Try to answer some of these questions.

  • Do you want basic or more coverage?
  • What is the specific out-of-pocket cost you want to cover? Is that coinsurance, deductible, or copayments?
  • Do you want help with Part B excess charges?
  • How often do you travel outside of the country, and do you want to include overseas coverage?
  • Do you want a high-deductible plan?

Now, let’s try to answer some of these questions. Part A offers the most basic level of coverage. But if you prefer more coverage, go for Part F or G. Fun fact: F and G are the two most common Medicare Supplement Plans.

At the end of the day, it is nice to see a benefits chart that can help you compare coverages. Most websites offering Medicare Supplement Plan, like Medisupps, provide a chart on their website.

Step 2 – Consider Your Budget

Let’s talk honestly for a moment. You might want to drive a Lamborghini, but you can afford only a Volvo. That happens with Medicare as well. Medicare Supplement Plans come with a monthly premium. What is your budget for paying?

Companies price their plans differently. Yes, the plans come standardized. We said it before. Companies have to offer the same basic benefits depending on which part you buy. But they do add extra benefits and charge more/less.

Just for info, insurance companies use three types of premium-pricing methods. The first one is “issue-age rated”. They base premiums on your age when you enroll and do not go up as you get older.

The second is community-rated. In this plan, all members pay the same premium, no matter their age. The last one is the attained-age related. For this method, the company bases the premiums on your current age, but the price goes up as you get older.

Speaking of prices, at this point you can also companies if they offer discounts. It happens sometimes. Ask the insurance company directly whether they offer discounts.

Step 3 – Sign up During the Medicare Supplement Open Enrollment Period

The good news: you can still sign up after the enrollment period ends. The bad news? Some companies might refuse to sell you an insurance plan or charge you more.

When does the enrollment period start? The open enrollment period starts the first month you enter 65 years of age or over and enrolled in Medicare Part B. It lasts for six months. During this period, you can sign up for your Medicare Supplement Plan and have the most options.

During this six-month frame, you have guaranteed-issue rights. Companies cannot turn you down for coverage. They will not charge you higher premiums because of pre-existing conditions. And they cannot require medical underwriting. So, to put it simply, it is best that you sign up during the Medicare Supplement Open Enrollment Period.

Once the period finishes, some companies refuse to sell their plans. Or, they can charge you more, depending on your medical problems. Other companies even require medical underwriting. And depending on your issues, the price of your plan might go up.

Step 4 – What if you miss the guaranteed-issue rights?

Here is some good news for you. After the open enrollment period, you might still get guaranteed-issue rights. Companies give them in a few limited situations. For example, if you disenrolled from your Medicare Supplement Plan to enroll in a Medicare Advantage plan for the first time, but you changed your mind within the first year.

Typically, companies do not offer guaranteed-issue rights after the Medicare Supplement Open Enrollment Period. The sixth-month frame is your best chance for the best Medicare Supplement Plan.

Step 5 – Consider Hiring a Broker

Here is one good thing: by law, brokers cannot tack on a commission to the price of the policy. That means you will pay the same premium no matter whether you buy the insurance plan through an agent or from the company.

And if you feel confused with all the things connected to Medicare Supplement Plan, you might consider talking to a broker. An independent broker will help you in this case.

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