Best Medicare Supplement Plan

Key takeaways

updated for 2024
  • There are no “bad” Medicare supplement plans.

  • With all Medicare supplement plans, Original Medicare is your primary insurer. That means you keep the best benefits of Medicare; you have no network limitations and no insurance company has a say in your healthcare.

  • The best way to find the right Medicare supplement for you, is to consider your personality. Are you a saver of just want peace of mind?

Best Medicare Supplement Plan.

There are ten different standardized Medicare supplement plans, two of which have a high deductible plan option and two that are only available to those who were eligible for Medicare prior to 2020.

Is there a best Medicare supplement plan?

The short answer is yes, there is a best Medicare supplement plan for you. It is the Medicare supplement insurance plan with the level of Medicare benefits you need at a monthly premium that you are comfortable with.

Note I said “comfortable” with the premium, not simply a premium you can afford. That choice of wording is important because the one weakness of a Medicare supplement insurance plan is that it requires a monthly premium and, over time, those premiums will increase with inflation. This means you not only must be able to afford a Medicare supplement insurance policy today, but you must have the discretionary income to weather reasonable price increases in the years or decades ahead.

Choosing Your Medicare Path

When you first enroll in Original Medicare you have the choice of either purchasing a Medicare supplement insurance plan or trading in your Original Medicare for a Medicare Advantage Plan. Medicare Advantage plans are Medicare replacement policies. That was their original name. They replace Medicare Part A and Part B with a privatized version managed by a for profit insurance company.

With a Medicare Advantage Plan, your healthcare is controlled by the insurance company who then requires your doctor to seek prior authorization from them before performing any non-urgent procedure or service.

If you wish to keep your Original Medicare benefits, you can add to the insurance coverage with a Medicare supplement plan. Original (aka Traditional) Medicare remains your primary insurance, with the supplement acting in a supporting role.

Why People Choose a Medicare Supplement Plan?

People who choose the Medicare supplement route do so because they get to keep the two most important benefits of Original Medicare

What are those benefits? First, you are not limited by a network.  With a Medicare supplement you can see any doctor, go to any medical facility in the U.S. or its territories, as long as they accept Original Medicare.  That’s almost every doctor and medical facility in the country.

Second, no insurance company has a say in your healthcare.  Medicare’s intent is to cover everything that is medically necessary, and they lean on your doctor to determine medical necessity.  Your healthcare decisions are between you and your doctor. 

Keeping those two benefits of Original Medicare are overwhelmingly the deciding factor for those who choose a Medicare supplement over a Medicare Advantage plan. You get to keep the benefits of Original Medicare regardless of which supplement plan you choose, or even which insurance company you decide to go with.  They all keep Original Medicare as your primary insurance.

Medigap vs Medicare Supplement Insurance

Before we get too far into this “best Medicare supplement” article I want to make sure I don’t forget a simple definition. You will often hear the term “Medigap plan”. A Medigap plan is the same thing as a Medicare supplement plan. They are simply two term for the exact same insurance policies.

What is a Medigap Plan?

Medigap policies, or Medicare supplement insurance plans are standardized insurance policies designed to fit hand-in-glove with your Original Medicare. Medigap plans pay the copays, coinsurance and some deductibles that Medicare does not cover. In addition, they set a limit on your annual out of pocket costs so that your financial risk is manageable.

For example, if Medicare beneficiaries receive outpatient services, Traditional Medicare health insurance will pay 80% of the Medicare bill (after a small annual deductible). Most Medigap plans have basic benefits that will pay the Part B coinsurance costs of 20% so you will have zero financial cost for your Medicare bill.

What Is a Standardized Policy?

Because these Medigap plans are standardized, there is no difference in benefits from one insurance company to the other. In fact, the benefits are written into Social Security law.

The only difference is price; what you pay today and what price increases you will experience in the years ahead.

Medicare supplement plans put an annual maximum out of pocket limit on your financial risk for health care costs without giving up your control of your health care to an insurance company. With a Medigap plan your maximum annual out of pocket expenses for Medicare services could be as little as a few hundred dollars, no matter the total cost of medical services.

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Are Medicare Supplement Plans Worth It?

Let’s first address the elephant in the room; the fact is there are no BAD Medicare supplement plans.  Every Medicare supplement plan will do exactly what Medicare tells it to do.

There is no other insurance in the United States that allows you to see any doctor or any medical facility in the country, as long as they accept Medicare and leaves your health care decisions between you and your doctor.

Over 95% of doctors and hospitals accept Medicare. When they accept Medicare, they accept any Medigap plan from any insurance company.

The biggest insurance companies pay between 80% and 95% of their bills electronically and within 48 hours of receiving the bill. There is no human intervention. The remainder are typically paid within two-weeks. Neither you nor your doctor needs to worry about the bills being paid.

Original Medicare plus a Medigap policy is hands down the best health insurance coverage available in the United States.

If you have already decided to go with a Medicare supplement plan and not a Medicare Advantage plan, then I congratulate you.  You have already made the most important decision facing those who are new to Medicare, and you have made a great choice.

2024 Medigap benefits table

Which Medicare Supplement Is Right for You?

The table above provides an easy way to compare Medicare supplement plans. While it may seem like a lot to compare, in most areas of the country there are only two or three Medicare supplement insurance plans priced commensurate with their benefits.

Medicare supplement insurance plans have prices that can vary by 300% between Medicare supplement providers. Monthly premiums are impacted by the size of the company, how well the company manages their business and their underwriting criteria.

When deciding which Medicare plan is right for you, you need to balance two important characteristics of Medigap Policies. First is to understand that the more benefits your policy offers, the more exposed it is to higher medical costs. Thus, not only will it have a higher premium today, but it will also have higher price increases in the future.

Second, it can’t be stressed enough that the choice of Medicare supplement insurance companies will have a greater impact on your lifetime premiums, than your choice of Medicare supplement plans.

Let me pause for a moment and note that I am very aware there are some of my competitors that want you to think that one plan is going to increase in price drastically more than other Medigap plans.  That is misleading.  It’s not the plan.  It’s the insurance company. Some insurance companies will have high price increases regardless of the Medigap plan, some will not.

That is why your choice of independent Medicare insurance advisors is critical. You do not want to just pick an independent Medicare agent near you to advise on Medigap plans. They may not have the experience or depth of knowledge to understand all that impacts your lifetime costs beyond your current monthly premium. In addition, they may not know how to compare multiple Medicare supplement companies except for by current premiums.

Lastly, there are always some agents who will advise on a Medicare plan based on their commissions. That’s no way to make such an important decision.

In todays electronic age, you can choose to work with some of the most knowledgeable and skilled independent licensed insurance agent who specializes in Medicare in the country, at no cost to you. Contact a licensed Medicare representative for a free consultation.

Compare Medicare Supplement Plans

The two Medicare supplement plans I will focus on in this article are Medigap Plan G and Medigap Plan N. According to industry research from Gen-Re, over 80% of all Medigap plans purchased are one of these two plans. If you want to delve into these plans more, after this article, I suggest my video titled “Medicare Supplement Maximum Out of Pocket Limits“. It’s an eye opener.

Some people are still interested in Medicare supplement Plan F.  You can read more on this Medigap plan in the linked article.

Often, we see people attempting to identify the best Medicare supplement plans by reviewing the details of their benefits, then creating hypotheticals of “what if I get this disease?” or “what if I never get sick” and so on. That is the absolutely incorrect way compare Medigap plan benefits or identify which is the best Medicare supplement plan for you.

There is an easier way and one that does not require that you predict what Medicare covered medical expenses you may incur in your lifetime. All you need do is know yourself, your personality.

Which Personality Are You?

I spent over three decades managing other people assets. I learned early on that the best path to success is to have a portfolio with a risk profile that matches the investor. For some, if a portfolio was too volatile the investor would make emotional decisions at the wrong time. For others, if a portfolio did not keep up with their desired returns, they would chase after returns that already occurred and lose money.

Finding the right Medicare plan is almost exactly the same thing. It’s a matter of the plan with benefits that fit your personality so that you feel comfortable with your medigap plan.

Peace of Mind Person

I see new Medicare beneficiaries in the same situation. I would categorize people into two different personalities. There are those who want their insurance to take care of everything. Cost is not as important as simply not having to deal with medical bills. These are people who want “peace of mind” from their health insurance more than anything else.

The Saver

A second group of people are those who like to save money. They want good things, but feel a sense or reward when finding a way to lower the cost. They often enjoy participating in the process of saving money as well. Many of these people are coupon clippers, or they have a favorite gas station a block or two out of the way that always has the lowest gas prices.

Using these two personalities, lets look at which supplement is best for each.

Medicare Supplement Plan G

Medicare supplement Plan GMedicare supplement Plan G offers the most comprehensive coverage of any of the Medicare supplement insurance plans available to those who are new to Medicare.  With a Plan G you can spend a year in the hospital as an inpatient and it will not cost you a dime.  Your inpatient services are covered at 100%. Your maximum out of pocket costs for inpatient care would be zero.

With Plan G’s comprehensive coverage your only expense for inpatient and outpatient Medicare coverage is the annual Medicare Part B deductible.  Please see my Medicare Maximum Out Of Pocket video and blog for details.

Part B is Medicare’s outpatient services.  When you see a doctor as an outpatient for the first time during the calendar year you will pay the Medicare Part B deductible.   Once you have paid that annual deductible you have 100% coverage when you have a Medicare supplement Plan G.

For 2024, the Medicare Part B annual deductible is $240.  That’s all. The Part B deductible will change a little every year. You pay this deductible once a year when you first see the doctor for outpatient services.  After that everything is covered 100%.

Check out my latest video showing the official estimates for the Part B premium and deductible, all the way out to 2032:  https://youtu.be/rofCas_taME

Plan G, The Peace of Mind Plan

Medicare supplement Plan G is what I call the Peace of Mind plan.  People who choose a Medicare supplement Plan G just want great coverage, the most comprehensive coverage available. They don’t mind that the plan cost more, they don’t want to think about their healthcare.  It’s just paid for.

Medigap Plan G offers complete Peace of Mind. To the person who chooses a Medicare supplement Plan G that peace of mind coverage is more important than the extra money it cost relative to your other Medicare supplement choices.  It’s that simple. Click this link for  more details on Medicare Supplement Plan G

Medigap Plan G is the most popular Medicare supplement plan being purchased today. For most Medicare enrollees, Medigap Plan G is the best Medicare supplement.

Medicare Supplement Plan N

Let’s compare Medicare plans and look at Medicare supplement Plan N.   MedicareMedicare supplement Plan N supplement Plan N has less less comprehensive coverage than the Plan G and cost less.  But there is a catch beyond just the lower premium. We need to look at this Medicare supplement closely to understand. More people today are finding the Medigap Plan N to be their personal “best Medicare supplement” than any time since Plan n was created.

Keep in mind, although Medigap Plan N has less comprehensive benefits that Plan G, it is still full coverage. The differences in benefits are minor, leaving Plan N as often the best value. They are both great Medigap plans with very low out of pocket costs for medical bills.

  • A Medicare Supplement Plan N is just like Plan G in that you can spend a year in the hospital, and it won’t cost a dime.  You have 100% inpatient coverage.
  • Also, just like Plan G you will have to pay the Part B deductible when you first see a doctor in any calendar year.  That’s under $250. But here is where this plan is different.

Medigap Plan N Copays

With Medicare supplement insurance Plan N, whenever you see a doctor for a diagnosis or evaluation you will pay up to a $20 copay.  It doesn’t matter if you see a Primary Care doctor or a Specialist, it’s no more than $20. If you go into an emergency room, there is up to a $50 copay that is waived if you end up staying as an inpatient in the hospital.

Now, this is important and often mis understood, the copay is not applied to all doctor visits.  The $20 copay is for diagnosis and evaluation visits only.  With the changes in healthcare due to Covid, Medicare has allowed health care providers to bill Urgent Care visits and telehealth with the same code category as a regular office visit. This means a $20 copay may be due if you have a Plan N and go to urgent care or have a telehealth doctor meeting.

While these were voiced as a temporary measure, I suspect they will become permanent changes to Medicare billing.

What Are Medicare Part B Excess Charges?

The biggest weakness of a Medigap Plan N is that there is no insurance against something called Medicare Part B Excess charges. That’s an interesting term.  What is a Medicare Part B excess charge? When a doctor decides to work with Medicare they can choose one of two contracts.  More than 97 out of 100 doctors choose a Participating Provider contract and therefore cannot charge an excess charge.

A Medicare Part B excess charge is limited to no more than 15% above the Medicare approved charge. Keep in mind, there are no Part A inpatient excess charges. Only outpatient services and procedures can be eligible for an excess charge.

For more details, see my recent video declaring Medicare Excess Charges R Dead!

Do Specialty Hospitals Charge An Excess Charge?

To the best of my knowledge, when Mayo clinic in Florida and Arizona stopped charging excess charges in 2019, that was the last of the major hospitals to charge a Medicare excess charge. I know of no major hospitals that currently charge an excess charge.

Best Medicare Supplement Plan

Why Do People Choose a Medicare Supplement Plan N?

People who choose a Medicare supplement Plan N do so because they like saving money. But if you are going to have a Medicare supplement Plan N you must avoid being charged an excess charge because an excess charge can wipe out what you saved on a lower premium. You do this by taking action. You must look up your doctor on the Medicare website before you visit them for the first time.  The Medicare.gov website physician finder will indicate if that doctor accepts Medicare assigned rates and cannot charge an excess charge, or if that doctor has a contract that allows them to charge an excess charge. The person who best fits a Medicare supplement Plan N is the person who wants to save money and enjoys participating or taking on a small responsibility to save that money. It’s the person who might enjoy using coupons, for example.  Or maybe drive a few blocks out of the way to save 10 cents a gallon on gas.

Compare Cost Savings in Copays Per Month

By the way, if you are not 100% sure on which plan fits you, I like to add one other thought here.  Medicare supplement Plan N can save a person typically between $15 and $50 a month in premiums.  Depending on where you live.  When you compare the monthly premium cost between a Medicare supplement Plan G and Plan N, measure the price difference in office visit copays.  Remember the $20 office visit copay?  How many office visits per month, each month, would it take for a Plan N not to be a better value relative to a Plan G? Click here for my article and video specific to Medicare supplement Plan N

Which Personality Are You?

Both Medicare supplements are good plans, they are just for people with different personalities.  People that want Peace of Mind coverage value that peace of mind over the higher premium costs.  People that want to save money, are bothered by the higher premium more than by the simple act of looking up their doctor to make sure they don’t charge an excess charge.  Which are you? Do you prefer the Peace of Mind of a Medicare supplement Plan G, or are you more interested in saving money with a Medicare supplement Plan N?

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Matthew Claassen, CMT and CEO of Medigap Seminars Insurance Agency. Medigap Seminars is an award winning premier national Medicare Insurance Brokerage, ranked among the top in the U.S.A. Matthew is considered a leading national expert on Medicare and Social Security. Mr. Claassen is a distinguished member of the Forbes Business council, an invitation only organization of business leaders and entrepreneurs. He and his team have received awards from many of the countries largest insurance companies including Mutual of Omaha, Aetna, Humana, Cigna, United American, United Healthcare and others. His videos have become the most popular Medicare educational videos on YouTube with millions of views. As a financial analyst Matthew lead a team of researchers to win the 2009 Best Equity Research & Strategy Award from The Technical analysis magazine.

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