It’s time to transition to Medicare… but you’ve got pre-existing conditions.
What are your options? And which plan is best for you?
As with so many things, that’s a highly individual decision, based on your unique budget, medical situation, and circumstances.
Medigap plans can be a great solution for people with pre-existing conditions. But some plans will be more suitable than others. This blog post will walk you through your basic Medigap choices, compare them to non-Medigap alternatives, and help you narrow down your choices to the very best ones.
But first, the basics.
What Are Medigap Plans?
Medigap, also called Medicare supplement insurance, is a system of private insurance plans that step in to help cover the “gaps” in Medicare itself.
These gaps –– deductibles, copays, and coinsurance charges –– are charges you would have to pay out of pocket if all you had was basic Medicare without any additional protection. These can add up to tens and potentially hundreds of thousands of dollars a year in extreme cases.
Most people can’t afford that risk, and so enroll in Medigap and pay an affordable monthly premium which limits those out-of-pocket costs to much more manageable levels.
To understand which Medigap plan to choose, you should have a good understanding of Medicare Parts A and B, which together make up “Original Medicare.”
Understanding Medicare Parts A and B
Medicare Part A covers hospital care, skilled nursing facility care, hospice, and some home health care.
However, it doesn’t cover long-term care or custodial care, such as long-term nursing care or assisted living for chronic conditions (conditions not expected to improve with treatment).
Medicare Part A Deductibles
Medicare Part A has a significant deductible: $1632 as of 2024.
That’s not per year, that’s per benefit period. A new benefit period starts when you go 60 days without being hospitalized, so without Medigap or other protection you could potentially incur multiple deductibles each year, if you have multiple hospitalizations.
In addition to your deductible, Medicare Part A has significant copays: $408 per day for days 61-90, and $816 per day for lifetime reserve days in excess of 90.
Medicare Part B covers outpatient care, doctor visits, preventive services, and medical supplies. But it doesn’t cover most dental care, eye exams, dentures, cosmetic surgery, acupuncture, hearing aids, or long-term care.
Medicare Part B has a modest deductible of $240 as of 2024.
However, it only covers 80% of charges. Without Medigap or other protection in place, you would be responsible for the remaining 20%. That’s a potentially devastating risk exposure, as a single surgery or significant medical event could leave you with tens of thousands of dollars in physicians’ charges, outpatient center charges, medical equipment, MRI imaging, and other costs.
Unlike Medicare Advantage plans -– another private insurance option for Medicare-eligible individuals––Medigap doesn’t replace Original Medicare.
Instead, Medigap plans are layered on top of your existing Medicare Part A and Part B coverage, again, to fill in the “gaps” in what Medicare covers. That is, your deductibles, co-pays, and the 20% coinsurance under Medicare Part B.
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Standardized Medigap Plans
Medigap plans, also known as Medicare Supplement insurance plans, are standardized in 47 out of the 50 states: All but Minnesota, Massachusetts, and Wisconsin, which have slightly different standardization systems.
This means that in these states, each plan offers the same basic benefits, regardless of which insurance company sells it. This standardization makes it easier for you to compare plans and choose the one that best meets your needs.
In the 47 standardized states, Medigap plans are identified by letters A through N. Each lettered plan offers a different set of benefits, but the benefits for each plan are the same no matter where you buy the plan or which insurance company you buy it from.
For example, a Plan G from one insurance company will have the exact same benefits as a Plan G from another company. However, the pricing may be different, and the medical underwriting standards may differ from carrier to carrier.
That said, as long as you sign up for a Medigap plan during your initial eligibility period for Medigap, you don’t need to worry about medical underwriting. You have guaranteed enrollment privileges, and you cannot be turned down due to medical reasons.
If you miss your Medigap initial enrollment period, however, you will need to pass medical underwriting. This means you will have to answer medical questions, and the insurance company may pull your medical records (with your permission). Depending on your medical history, they may charge a higher premium, or turn you down for coverage at all.
If you have pre-existing conditions, this could be a significant obstacle for you.
Medigap Core Benefits
All Medigap plans must cover certain core benefits, which include:
- Part A coinsurance and hospital costs: Coverage for up to an additional 365 days after Medicare benefits are used up.
- Part B coinsurance or copayments: Coverage for outpatient care, doctor visits, and other medical services.
- First three pints of blood: Coverage for the first three pints of blood needed for a medical procedure.
- Part A hospice care coinsurance or copayments: Coverage for hospice care services.
Additional Benefits
Depending on the plan, Medigap policies may also cover additional benefits such as:
- Part A deductible: The amount you pay before Medicare starts to pay for your hospital care.
- Part B deductible: The amount you pay before Medicare starts to pay for your outpatient care (not covered by most plans since 2020).
- Part B excess charges: The amount a doctor can charge over the Medicare-approved amount.
- Skilled nursing facility care coinsurance: The costs associated with staying in a skilled nursing facility.
- Foreign travel emergency care: Coverage for emergency medical care received outside the U.S. (up to plan limits).
The Very Best Plans––That New Enrollees Can’t Get
The most generous Medigap plans––the ones that provide the most protection against out-of-pocket Medical costs under Medicare, are Plan F and Plan C.
These were very in-demand plans because they covered all out-of-pocket costs under Medicare. Plan F covers all costs under Medicare Parts A and B, while Plan C covers everything except excess physicians’ charges.
If you’re enrolled in Plan F, and you have a hospitalization or need care from a doctor, or need x-rays, MRIs, or out-patient treatment or physical therapy, you would pay nothing out of pocket at all. All you would pay is your Medigap premiums. Plan F would pay for all your deductibles, copays, and co-insurance within the United States – even excess physicians’ charges over and above the Medigap-approved rates.
Plan C would cover everything except the excess charges.
Both Plan F and Plan C are good matches for those who have pre-existing conditions. But Congress decided these plans were too sweet a deal. They are now no longer available for those who became eligible for Medicare after January 1st, 2020. Instead, Congress decided that all Medicare beneficiaries should have at least some skin in the game.
As a result, all Medigap plans currently open to new enrollees require policyholders to pick up at least some of the costs of their own medical care out of pocket.
If you were eligible for Medicare before this date, you may still be able to purchase these plans. But check pricing carefully, because these plans have older risk pools, which may be driving prices up. In some cases, you may be better off choosing something like Plan G, described below.
Medigap Plan G: The Most Comprehensive Plan Available to New Medigap Beneficiaries
Medigap Plan G is one of the most comprehensive options available now.
Since Plan F and Plan C are no longer available to new enrollees, Plan G is a top choice. Plan G covers everything that Original Medicare covers except the Medicare Part B deductible. This means you’ll have coverage for:
- Part A deductible and coinsurance
- Part B coinsurance or copayments
- First three pints of blood
- Part A hospice care coinsurance or copayment
- Skilled nursing facility care coinsurance
- Part B excess charges
- Foreign travel emergency (up to plan limits)
Excess charges are the additional fees that some doctors can charge over the Medicare-approved amount. Plan G covers these, ensuring you’re not hit with unexpected bills.
Average Premiums for Plan G
The average premium for Medigap Plan G varies depending on your location, age, and other factors, but you can expect to pay between $100 and $300 per month.
Plan G also comes in a high-deductible version. Instead of the current Part B deductible of $240, you would be responsible for the first $2,800 of medical charges under Medicare Parts A and B. So you’re picking up more of the risk, but you would also pay a lower monthly premium compared to the standard Plan G.
However, high-deductible plans are usually better suited to people in good health with no significant pre-existing conditions. Otherwise, the higher-deductible would potentially devour everything you hoped to save in monthly premiums, and then some!
Medigap Plan N: A Cost-Effective Alternative
Medigap Plan N offers a good balance between cost and coverage. It covers:
- Part A deductible and coinsurance
- Part B coinsurance or copayments (except for up to $20 copayment for some office visits and up to $50 for emergency room visits that don’t result in inpatient admission)
- First three pints of blood
- Part A hospice care coinsurance or copayment
- Skilled nursing facility care coinsurance
- Foreign travel emergency (up to plan limits)
Plan N does not cover Part B excess charges. However, if you live in one of the eight states that don’t allow excess charges (Connecticut, Massachusetts, Minnesota, New York, Ohio, Pennsylvania, Rhode Island, and Vermont), Plan N can be a great cost-effective choice, providing very similar benefits to Plan G but at a slightly lower premium.
Premiums for Plan N are generally lower than Plan G, ranging from $80 to $250 per month.
Applying for Medigap Plans
When applying for a Medigap plan, it’s best to do so during your Medigap Open Enrollment Period.
This period starts the first month you’re 65 or older and enrolled in Medicare Part B and lasts for six months. During this time, you can buy any Medigap policy sold in your state, even if you have health problems, at the same price as people with good health.
If you apply outside of this period, you might face medical underwriting, which means the insurance company can use your health status to decide whether to accept your application and how much to charge you. So if you have pre-existing conditions, be sure to sign up as soon as you’re eligible.
For personalized assistance and help selecting a plan and getting signed up, contact a Personal Benefits Manager.
Prescription Drug Coverage
No Medigap plan, including Plan G and Plan N, covers prescription drugs.
To get prescription drug coverage, you’ll need to enroll in a Medicare Part D plan. Part D plans are offered by private insurance companies and vary in cost and coverage, so it’s important to compare your options.
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Medi-Share 65+: A Budget-Friendly Option
For those on a tight budget, Medi-Share 65+ might be a viable alternative.
Medi-Share 65+ is a health-sharing plan that can save you money compared to Plan G. However, there’s a six-month waiting period before costs for pre-existing conditions become shareable.
The Medi-Share 65+ Health Sharing Plan vs. Medigap Plan G: Which is Best for You?
How Medi-Share 65+ Works
Medi-Share 65+ members share each other’s medical expenses.
You’ll still need to pay for Medicare Part A and Part B, but Medi-Share can help with other costs. This plan might save you money on a monthly basis, but be aware of the waiting period for pre-existing conditions.
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Final Thoughts
Choosing the right Medigap plan is essential, especially if you have pre-existing conditions.
While Plan G offers comprehensive coverage, Plan N can be a cost-effective option, particularly if you live in a state that doesn’t allow excess charges. Remember, no Medigap plan covers prescription drugs, so consider a Part D plan as well.
For those on a tight budget, Medi-Share 65+ might be a suitable alternative, but be mindful of the waiting period for pre-existing conditions.
By understanding your options and considering your health needs and budget, you can make an informed decision that provides the best protection and peace of mind.
It’s important to meet all your Medicare-related deadlines, including the initial eligibility period for Medigap. Especially if you have pre-existing conditions because you could get charged a higher premium or denied Medigap coverage altogether, depending on your medical history.
Fortunately, you don’t have to go it alone: Our team of expert Personal Benefits Managers have a wealth of experience helping people just like you choose the best Medicare strategy for their own unique situation, and get successfully enrolled.
For free personalized assistance, all you need to do is make an appointment with a Personal Benefits Manager. From there, we’ll walk you through the rest of the process, help you analyze your needs, and make sure you have all the information you need to make an informed decision.
For Further Reading: Medigap Shopping Tips: How Not to Overpay for a Medicare Supplement Plan|Learn Your Medigap ABCs: The Top Medical Supplement Insurance Plans
Wiley Long is founder and president of Medigap Advisors, and is passionate about helping people navigate the confusing waters of Medicare. He is the author of The Medicare Playbook: Designing Your Successful Health Coverage Strategy, a clear and simple explanation so you can make the most of your Medicare coverage.