How to Compare the Costs of Medigap Plans

A Medigap policy is a supplemental health-insurance plan that covers some of the medical costs for which traditional Medicare does not pay. Policies can vary in cost although the private insurance companies offering Medigap plans to health care consumers must follow specific state and federal guidelines. By law Medigap policies are required to offer certain benefits included with basic coverage. Because a number of different Medigap policies are available, it is important for consumers to consider the choices carefully before selecting a plan.

Things You'll Need

• Premium rate quotes

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Instructions

• 1

  Consider your monthly income. Decide what kind of coverage you can afford. If you are in a position to pay out-of-pocket medical expenses, you might consider a plan that is less expensive, but will pay fewer medical expenses. However, if you live on a limited income, paying a higher premium may actually be to your advantage. Select a plan that offers more coverage and pays the cost of the annual Medicare deductible and co-payments for hospital stays and doctor visits.

• 2

  Think carefully about the health care benefits you might need. Even if you are healthy now, you might want to select a plan that pays for preventative health services such as routine screenings and health exams. Keep in mind that if you have chronic health problems and use several prescription drugs, choosing a more expensive plan will give you more comprehensive coverage. It is also important to take into account whether your medical history may require the need for home health or skilled nursing care services in the future.

• 3

  Decide whether you prefer having the flexibility of being able to go to a doctor or hospital of your choice. Since the cost of the insurance will depend on the type of plan you choose, find a reliable company that offers you the coverage you need at a cost you can afford. If you make the decision to participate in a Medicare PPO or HMO network rather than enroll in a separate Medigap plan along with traditional Medicare, it will affect the cost of your coverage as well as what benefits you will have.

• 4

  Contact several insurance companies in your state (See Resources below.). Compare the premium rates they charge for the different plans offered. While insurers must provide the same basic provisions for each plan type, rates can vary from company to company, as well as from state to state. Find out all the details beforehand as some companies increase rates when policyholders get older. Other companies base rates on geographic area charging all policyholders the same premium regardless of age. Even if you pay more when you first take out this type of policy, any increases will be based on inflation and increased costs for health care and not your age.

• 5

  Find out more about the Medicare supplemental insurance plans that the American Association of Retired Persons offers to eligible members (See Resources below.). Membership in an organization like the AARP often gives members the option of purchasing Medicare supplemental health insurance at a discounted rate.

• 6

  Check with your state insurance department to see if any complaints have been made about the company of your choice. It is also a good idea to inquire whether an insurance company has a good rating (See Resources below.).