Medicare Supplements Explained
Medicare Supplement Plans, also known as Medigap plans, are some of the best health insurance coverage money can buy. These plans act as secondary insurance to cover what is left over after Medicare Part A and Part B pay their share. Let’s explore how these plans work!
How Medicare Supplements Work
Compared to all of the other parts and plans that make up Medicare, the Supplement plans are very simple. These are the defining characteristics of Medicare Supplements:
#1 – They Pay Very Generously
While there are many Medicare Supplement plans you could choose [learn about the types of supplements here], the most popular plans (F, G, and N) pay nearly 100% of covered medical costs, after Medicare Part A and Part B have paid. This means, as long as Medicare covers it, your out-of-pocket costs would be very minimal or even $0.
#2 – They're Standardized
A good thing about shopping for Medigap plans is that the government requires that all Medicare Supplement plans to be standardized by plan letter.
What does that mean, Standardized?
That means Plan G with Company A is EXACTLY the same as Plan G with Company B.
This means that when you are shopping for Medicare Supplement plans, you really are comparing apples to apples.
#3 – No Networks or Referrals
Medicare Supplements are secondary insurance, so you remain on Original Medicare Parts A and B. This means you keep the “network” of Medicare itself. We refer to this as having no network at all because over 95% of all providers in the nation accept Medicare.
As long as a provider accepts Medicare, they are required to accept your Medicare Supplement as well. You don’t have to worry about certain doctors only accepting Company A’s Supplemental plans but not Company B. It’s required.
If you travel frequently or have homes in different parts of the country, Medicare Supplement plans travel well across all 50 states. Some plans even have emergency benefits for if you’re out of the country.
#4 – Guaranteed Renewable
Medicare supplements are guaranteed renewable. This means once you have it, the insurance company CAN NOT take it away from you no matter how many medical bills you have. The only way to lose your Medigap plan is if you stop paying your monthly premiums.
This is why we highly recommend you set up automatic bank payments for your premiums. The last thing you want to happen is to forget to pay your bill and now you lose coverage that you may never be able to get back again! Sadly, I’ve seen it happen that someone in the hospital could not mail a check in to pay their bill and nearly lost their coverage when they needed it most!
#5 – Easy Claims Processing
The claims process for Medicare supplements is very simple. Your provider files a claim with Original Medicare first since it will be your primary insurance. Once that is paid, they’ll send a copy of your claim to your Medicare supplement insurance company.
Medigap companies don’t get to question, “Hmm, should we pay this claim?”. As long as the claim was approved by Medicare, the Supplement company is REQUIRED to pay their share. No ifs, ands or buts about it.
FAQ
Why Do Supplement Rates Go Up?
YES, plans will go up each year. Some companies are worse than others.
What Makes One Company Better Than Another?
We look for long-term stability. That means the price you pays stays affordable in the long run. That means we’re confident the company will be here in 30-40 years.
Are There Any Drawbacks to Choosing Medigap?
YES, Medigap plans can be more expensive than Medicare Advantage plans. Additionally you’ll have to purchase separate Part D Drug Coverage, and separate Dental and Vision Coverage, which adds to the cost. Simply put, not everyone can afford a Medigap plan. But there is the old expression, you get what you pay for.
Moving States: What Happens to Medicare Supplement Rates?
If you’re considering moving to another state, it’s important to understand how that could affect your Medicare Supplement premium. Unfortunately, it’s not always as simple as “new zip code = new rate.”
Many Carriers Use Regional or Blended Pricing
Some Medicare Supplement insurance companies use what’s known as blended pricing. This means your premium may not be based only on your zip code. Instead, insurers group states or regions together and charge an average premium across that area.
Even if you move from a high-cost state like New York to a lower-cost one like North Carolina, your premium may stay the same, or only drop slightly because of this blended approach.
Examples of How It Works:
UnitedHealthcare (AARP): Often uses regional pricing. Moving to a cheaper state may not reduce your rate unless you apply for a new plan.
Mutual of Omaha: May allow you to keep your original rate even after a move, unless you cancel and reapply in your new state (which usually requires medical underwriting).
Cigna & Humana: If you keep your current policy number, your rate may not change post-move.
Blue Cross Blue Shield (Anthem/Elevance): Some affiliates use strict ZIP-based pricing; others price regionally across multiple states.
Can You Switch to a Lower-Priced Plan?
Yes, but you’ll usually need to apply for a new policy in your new state, and most of the time this means going through medical underwriting. That’s why it’s critical to compare options before you move, or at least as soon as you do.
Bottom Line
Just because you move doesn’t mean your premium will automatically adjust. Every carrier handles relocations differently. If you want to explore better pricing in your new state, our team can walk you through what’s possible, and what’s smart.
Summary
Medicare Supplements are extremely popular, especially with people who were paying for employer group health insurance that cost more money and delivered less coverage. When it comes to Medigap plans, the key decisions are: can you qualify for a Medicare supplement and can you afford one.
Rates are determined based on your zip code, age, gender, and smoking status. The simplest way to compare the different plans and prices available in your area is to schedule an appointment with our team.