Medigap Plans: How to Choose an Agent and a Company

Medigap, also called Medicare Supplement insurance, is sold by private insurance companies. It is designed to help with some costs that Original Medicare does not pay on its own. Medigap plans are different from Medicare Advantage, which is an alternative way to receive Medicare benefits.

Plan benefits are standardized by letter, so a plan with the same letter generally offers the same basic benefits no matter which company sells it. Only Plans A, B, D, G, K, L, M and N (and high-deductible Plan G) are sold to people newly eligible for Medicare. Plans C and F (and high-deductible F) are available only to people who became eligible before January 1, 2020. Plans E, H, I and J were discontinued and are not sold today, so Plan H cannot be bought now. Massachusetts, Minnesota and Wisconsin standardize Medigap differently.

Because the benefits are standardized, the company often matters in other ways. Companies may differ in how they price a plan, how they handle rate changes over time, how they treat discounts, and how they serve customers. An independent licensed agent is a professional who may be able to explain these differences and help you compare options from more than one company.

Many people start by deciding which plan letter fits how they use health care. They then look at medigap quotes, also called Medicare supplement quotes, from several companies for that same letter. Since the benefits match, price has traditionally been a major point of comparison.

Others look further. They may ask about a company's history of rate increases, how its pricing method works, and whether it is known for steady service. Some people also ask friends, family, or their State Health Insurance Assistance Program (SHIP) for guidance.

People also weigh Medigap against Medicare Advantage. Medigap offers the freedom to see any provider nationwide that accepts Medicare, with no network or referrals, and predictable cost-sharing. Its trade-offs are generally higher monthly premiums, possible medical underwriting outside open enrollment or guaranteed issue, a separate Part D plan for drugs, and no routine dental, vision or hearing. Medicare Advantage often has lower premiums, an annual out-of-pocket maximum, extra benefits, and drug coverage in many plans, but it can involve networks, prior authorization and copays. Neither is right for everyone.

The right Medigap agent may help you sort through choices without pressure. An independent agent is not tied to a single company and may be able to show options from several. A first conversation is generally a chance to share your doctors, your budget, and what matters to you.

Good questions to ask include: Which companies do you work with? How are you paid? How has this company handled rate changes in the past? Is this plan priced in a way that may change with age? Will I need to answer health questions? Do you also help with a Part D drug plan?

It also helps to ask how timing affects you. Open enrollment, guaranteed issue, birthday or anniversary rules, and access for people under 65 vary by state and change over time. A Medigap agent may help you understand them, and you can confirm current rules with Medicare.gov, your SHIP, or a licensed agent. Call 1-800-MEDIGAP for more information.