A Medicare supplement plan fills the gaps in healthcare coverage left by standard Medicare Parts A and B.
Medicare supplement plans are regulated by the government and issued by private insurance companies. These plans cover the out of pocket expenses that all-too-often create mountains of medical debt and cause people to avoid getting necessary care.
Many insurance companies offer Medicare supplement plans. After exhaustive research, we determined that the following companies offer the best Medicare supplement plans of 2021.
Humana is one of the largest providers of healthcare and healthcare insurance in the country. Humana went from owning and operating nursing homes, to owning and operating hospitals. In 1984, they began offering medical insurance as well.
What we like: Humana provides an easy way to find a plan that applies to your state. They have one of the best websites when it comes to obtaining relevant information. And they offer an automatic payment discount.
Flaws: Not all their plans are available everywhere. And some have high deductibles.
2. Mutual of Omaha Medicare Supplement
Mutual of Omaha offers eight Medicare supplement plans that cover most out of pocket expenses most people will incur. They have a lot of experience, offer discounts for things like being a non-smoker, and they are available in most states.
What we like: They offer international travel coverage with some of their plans. They’ve been working with Medicare since 1966, so they know what they’re doing. Their international coverage option is great for active seniors.
Flaws: Some of their high end plans are pretty expensive. Also, they do not offer plans C and D.
3. United Medicare Advisors
United Medicare Advisors offer timely information that can take much of the confusion out of the process of finding the right Medicare supplement plan. UMA brings together insurers so you can compare and contrast coverage options.
What we like: They work with most of the better Medicare supplement plan providers. It’s easy to get timely information from them. They don’t seem to play favorites with the different companies.
Flaws: They’re not available in all 50 states. The company website isn’t a lot of help. They don’t offer all the different supplemental plans.
4. Aetna Medicare Supplement
Aetna is one of the country’s largest insurance companies. They offer most Medicare supplement plans, including plans that will cover you during overseas travel. If you plan to travel after retirement, that is something to consider.
What we like: Aetna provides vast leeway when it comes to choosing a healthcare provider. They guarantee their rates for one year. And they offer a range of plans, so you’re likely to find one that works for you.
Flaws: Doesn’t cover Medicare Plan C. Only available in 48 states.
Cigna is another insurance industry giant with a solid financial foundation and a good reputation. They offer most current Medicare supplement plans. They’re also one of the few to offer plans outside the confines of regulated plans.
What we like: Cigna Medicare Supplement Insurance covers all established plans. That means international coverage is available. They also offer a range of optional coverage plans that extend well beyond the regulated plans.
Flaws: Costs can vary considerably state to state. Some of their proprietary coverage options aren’t available in every state.
6. Blue Cross Blue Shield Medicare Supplement
Medicare supplement plans are heavily regulated. Therefore, you won’t find much difference between Medigap plans offered by different companies. What you get with Blue Cross Blue Shield, however, is unparalleled access and acceptance.
What we like: With Blue Cross Blue Shield, you have almost unlimited flexibility in who you see wherever you are in the US. They cover all the established and regulated Medicare supplement plans.
Flaws: BCBS doesn’t cover co-payments for all services for some reason. The quality of customer service varies considerably from state to state.
7. State Farm Medicare Supplement Insurance
State Farm has been around for nearly a century. They survived the Depression, WWII, the Cold War, and the digital revolution. Their resilience is a testament to the strength of their leadership and the quality of their insurance products.
What we like: They offer most of the regulated Medicare supplement plans. Their most comprehensive plans are very reasonably priced. State Farm customer service is generally good to excellent.
Flaws: The company website doesn’t provide much information regarding how to file a Medicare supplement claim.
Medicare.net is not an arm of Medicare. They are an insurance portal that provides people the ability to compare Medicare supplement plans from different companies without jumping between websites.
What we like: While they’re not an insurance company, they do work with most of the major Medicare supplement providers. Their website is easy to navigate and full of useful information. Their mobile site is also one of the best.
Flaws: They ask for personal information before they’ll provide a quote. And remember, this is an insurance portal, not an insurance company.
9. Transamerica Medicare Supplement Insurance
Transamerica offers several aMedicare supplement plans at reasonable prices. They also offer vdental, vision, and hearing plans unrelated to Medicare. You can bundle these with your supplemental Medicare plan to provide robust coverage.
What we like: Transamerica offers four different, reasonably priced, Medicare supplement plans. They also offer supplemental vision and dental that is not related to Medicare but which can be useful.
Flaws: The company requires you to jump through several hoops to get information on their Medicare supplement plans. They don’t cover Medicare Part D (drugs).
10. AARP Medicare Supplement
AARP is the largest senior advocacy organization in the world and understands the issues facing older Americans. AARP offers a variety of Medicare plans through its partnership with UnitedHealthcare. They also offer discounts for AARP members.
What we like: AARP provides a wealth of useful information that will help you find a plan that suits your needs. The plans they offer are underwritten by industry giant UnitedHealthcare and are available at a discount to AARP members.
Flaws: You have to be a member of AARP. That covers lots of older folks, but not everyone.
Who Needs a Medicare Supplement Plan?
Anyone who is not independently wealthy and able to pay potentially unlimited medical bills out of their own pocket should consider a Medicare supplement plan. Skyrocketing healthcare costs are driving many seniors to bankruptcy court. Instead of traveling the world in their golden years like they planned, they are losing their homes and turning to their children for support. But the fact is, in many cases, bankruptcy could have been avoided if the person or couple had a Medicare supplement plan.
How We Ranked
The federal government regulates all Medicare supplement plans. Therefore, the Plan F offered by one company will provide identical benefits to the Plan F offered by another company. So, examining the plans is not a valid method for determining if one company is better than another.
Instead, we looked at things such as the company’s financial standing, how easy they are to work with, and whether they are active in all or most of the 50 US states. We also considered whether the company website offered useful information and an easy way to determine plan availability and calculate costs.
Finally, because the process of choosing a Medicare supplement plan provider can be confusing, we also included a few companies that act as supplement plan portals. That is, these companies do not offer their own plans. Instead, they allow you to compare the cost of similar plans from different companies and then choose the one that makes sense for you.
Medicare supplement plans cover out of pocket expenses. People tend to think that Medicare will cover their healthcare costs when they get older. But Medicare is a big picture program. And the devil, as we know, is often in the details. The details in terms of healthcare are out of pocket expenses not covered by Medicare. They can quickly add up and cause severe economic hardship for the unprepared. Medicare supplement plans will cover most of those costs.
Medicare supplement plans protect your nest egg. A recent study revealed that many seniors in America are spending their life savings to cover medical costs (1). It’s fair to say that this is not what most of them had in mind when they were putting money aside in their 30s and 40s. Medicare supplement plans can help prevent this type of travesty and enable retired folks to avoid being healthcare hostages.
Medicare supplement plans provide peace of mind. People tend to think seniors are fixated on death. But there are actually many things they fear just as much or even more than dying (2). Among those fears are declining health, a loss of mobility, and a lack of money. One reason many older individuals wind up financially strapped is because of spiraling healthcare costs. Medicare supplement plans can reduce that financial burden and provide seniors with much-appreciated peace of mind.
Medicare supplement plans go where you go. Many, if not most, Medicare supplement plans offer coverage of medical expenses in foreign countries. In addition, when you travel from state to state, you can take your supplemental insurance with you. That’s the case even if the state you’re going to doesn’t offer the Medicare supplement plan you have. The bottom line: with Medicare supplement insurance, you’re covered wherever you go.
Medicare supplement plans let your family rest easy. The high cost of senior healthcare does not just affect the seniors themselves. It almost always has a cascading effect on the financial health of their children. More and more Americans are declaring medical bankruptcy because they’re overwhelmed by the cost of caring for their aging parents (3). Medicare supplement plans can help children of elderly parents rest a little easier.
Medicare supplement plans cover the cost of prescription drugs. The cost of prescription drugs is out of control (4)(5). At the same time, Medicare coverage of prescription drug costs is notoriously limited (6). That means that unless you have the right Medicare supplement plan, the financial burden for prescription drugs falls mainly on you. Medicare supplement plans are an affordable way to protect your health and your savings.
Medicare supplement plan benefits are predictable. Because the federal government regulates these plans, each plan is the same regardless of which company is offering it. So why bother shopping around? Because, while they may cover the same things, they don’t all cover the same areas, provide access to the same number of healthcare facilities or cost the same.
Medicare supplement plans offer a range of coverage options. The government approves and regulates 10 different types of supplemental Medicare coverage. They address the various gaps in Medicare coverage. Those gaps include the cost of extended hospital stays, copayments, skilled nursing facility care, Medicare Part A and B deductibles, Part B excess charges, healthcare costs incurred while traveling, and preventive care.
Medicare supplement plans are guaranteed to be there for you. If you have a Medicare Advantage plan, or you’re not yet 65, or you’re not enrolled in Medicare Parts A and B, you can be denied supplemental coverage. However, if none of those things apply to you, then you can’t be turned down for Medicare supplement insurance (7). The only condition is that you must apply during your open enrollment period, which lasts for six months after you turn 65.
Medicare supplement plans are sometimes offered at a discount. AARP offers Medicare supplemental plans through UnitedHealthcare. They also offer a discount on those Medicare supplement plans to AARP members who meet certain requirements (8). Such a discount can make a big difference for those seniors on a fixed income. Keep in mind that not all insurance providers offer these discounts.
Medicare supplement plans provide long term care coverage. Medicare will cover your hospital costs up to 60 days (after you pay the $1,364 deductible). After 60 days, however, you’ll be responsible for $341 per day. And after 90 days, that increases to $682 per day. So if you spend four months in the hospital due to a serious illness, your out of pocket cost will be approximate $30,000. Medicare supplement plans can cover almost all of that cost.
Medicare supplement plans cover nursing home expenses. Original Medicare will cover the costs of a nursing home for up to 20 days. After that, you’ll be responsible for some $150 or so per day. But if you sign up for Medicare supplemental insurance plans C, D, F, G, M, or N, your portion of the bill is covered up to 100 days. That’s potentially $12,000 in coverage.
Medicare supplement plans cover excess charges. Not every doctor accepts Medicare’s ‘approved amount’ as being enough for them. These doctors are allowed by law to charge 15 percent more than Medicare covers (9). These are known as ‘excess charges’. If you don’t have Medicare supplement insurance, these charges can add up quickly. Fortunately, several supplement plans will cover 100 percent of these costs.
Medicare supplement plans can’t be canceled for no reason. This is another outstanding feature of Medicare supplement plans. Insurers are prohibited by law from canceling your policy for no reason. The only case in which they’re allowed to cancel your coverage is if you don’t pay the premium amount. So, as long as you continue to make your monthly payments, your supplemental insurance cannot be taken from you.
Q: What is a Medicare supplement plan?
A: A Medicare supplement plan fills the gaps in coverage left by Medicare Parts A and B. It does not take the place of Medicare. Instead, it’s there to provide a patch when Medicare fails to provide coverage. Sometimes that patch may be small and amount to little more than covering a copay on a particular service. In other cases, that patch may be significant, covering tens of thousands in hospitalization costs.
Q: Why do I need a Medicare supplement plan?
A: You need a Medicare supplement plan because Medicare itself does not cover all the costs associated with hospitalization, prescription drugs, long term care, and more. It’s these ‘out of pocket expenses’ that can and often do, end up causing intense financial hardship for the elderly and their families. Make no mistake; Medicare is vitally important. But it is an imperfect program riddled with potentially costly ‘gaps’.
Q: When am I eligible to buy a Medicare supplement plan?
A: You can purchase a Medicare supplement plan beginning the first day of the month in which you turn 65. From that day, you have a six-month window of eligibility, during which time you cannot be denied supplemental Medicare coverage. After that six-month window expires, companies have the legal right to deny you coverage for any reason they see fit. Just remember: You will need to enroll in Medicare Part B (10) to get supplemental coverage.
Q: How many Medicare supplement plans are there?
A: There are 10 Medicare supplement plans currently in use. Each one provides coverage for a different aspect of health care not covered by Medicare, and the federal government regulates each one. The current plans are designated A, B, C, D, F, G, M, N, L, and K. Many of these plans are similar, but offer different levels of coverage and are priced differently. Similar plans – such as plans F and G – are often discussed in tandem.
Q: Which companies offer the best plans?
A: All of the plans described above are regulated by the government. That means Plan C is exactly the same no matter which insurance company offers it. The same is true with every other plan. What changes from company to company is the cost. Not the plan itself. Also, not all insurance companies offer all 10 federally-approved plans. And plans tend to change from state to state.
Q: What is meant by ‘copay’?
A: A copay is essentially a service fee that you must pay when you partake in healthcare services paid for by Medicare or an insurance plan. Not all services require a copay. But many do. Medicare supplement plans typically cover this copayment, which reduces the financial burden on you. Copayments are not intended to enrich medical professionals. Instead, they’re intended as a deterrent to keep people from overusing their medical insurance.
Q: Can I choose more than one beneficiary?
A: Whoever is using the insurance to partake of medical or other services is the beneficiary. Some Medicare supplement plans enable you to sign up a spouse as well. In which case that plan would have two beneficiaries. So, yes, you can sometimes (not always) have more than one beneficiary. If you wish to do so, you should bring this up with the insurance agent before you sign on. Just to make sure the plan your getting allows multiple beneficiaries.
Q: What do they mean by ‘deductible’?
A: A deductible is different from a copay. The amount of the copayment is typically small and unchanging. The amount of the deductible is often much larger and increases year on year to keep up with inflation (11). In some cases, the deductible can be as big as the amount Medicare covers. And in other cases, you may have both a copay and a deductible. A Medicare supplement plan can cover most or all of the deductible.
Q: Is there any way to get a discount on Medicare supplement plans?
A: Yes. Some Medicare supplement plans offer a discount to married couples. One reason for this is because married people tend to be healthier than individuals who often let themselves go as they age (12). AARP also offers discounts to members who sign up for their supplemental Medicare plans. With the keyword there being ‘members’. As in AARP members. Other companies offer discounts to non-smokers and those who pay by automatic deduction from their bank account.
Q: Do any plans cover all my out of pocket expenses?
A: No Medicare supplement plans will cover 100 percent your out of pocket expenses. They all leave you with something to pay. They just go about it in different ways. Some leave expenses at the far end of coverage. That is, they’ll cover you for, say, 90 days of care. But after that, you’re on your own. Others cover 100 percent of long-term out of pocket expenses. But only after those expenses reach a certain point and you have paid several thousand dollars.
Q: What drugs are covered under a Part D supplemental plan?
A: Medicare may cover some drugs administered in a hospital setting. But in most cases, drugs are not covered by original Medicare. If you want drug coverage, you will need a Part D supplemental plan. A Part D plan will cover FDA-approved drugs, provided that drug has been prescribed by a qualified doctor. A Part D plan must cover cancer drugs, anti-convulsant drugs, HIV drugs, anti-depressants, and anti-psychotic drugs.
Q: Am I required by law to have supplemental Medicare coverage?
A: No, you are not required by law to have a Medicare supplement plan. However, if you choose not to, you are rolling the dice on your financial future. Exposing oneself to myriad out of pocket expenses often ends in mountains of medical debt (13). You are also risking your future health because there comes a time in every uninsured or underinsured person’s life when they wind up not getting needed care because they can’t afford it.
Q: Will my Medicare supplemental plan cover me if I travel?
A: In most cases, yes. A Medicare supplement plan will cover you when you travel from state to state. That is often true even if the state you travel to does not allow your type of Medicare supplement plan. If you move to a new state, it may be a different story. Once it comes time to renew your current plan, you may have to choose a new one if yours is not offered in your new state. Talk to your plan provider before moving.
Q: Will a Medicare supplement plan cover me if I travel overseas?
A: Original Medicare will not cover healthcare costs incurred in a foreign country except in the rarest of circumstances. Fortunately, if you plan to spend your retirement seeing the world, there are Medicare supplement plans that will provide various levels of coverage. Six of the current plans offer foreign travel coverage. They are Plans C, D, F, G, M, and N. Each is different, so make sure to pick the right one for you.
Q: Do I need supplemental Medicare coverage if I’m still working?
A: Lots of people these days work beyond the standard retirement age of 65. Many of them continue to enjoy insurance coverage through work. If you are happy with your current coverage, there is little reason to switch to Medicare the day you turn 65. Instead, you might want to wait until you retire to enroll in Medicare Part B. Once you do, your open enrollment for Medicare supplemental insurance begins, and you have six months to choose a plan.
Q: Can I have both Medicare Advantage and supplemental Medicare coverage?
A: The law mandates that you are not allowed to have both a Medicare Advantage (14) plan and supplemental Medicare coverage. If you have an Advantage plan and you apply for supplemental coverage, you will be turned down. If you are not happy with your Medicare Advantage plan, you can leave it and obtain a Medicare supplement plan, and vise versa. But you cannot have both types of coverage at the same time.
Q: Can I change my Medicare supplement insurance company if I’m not happy?
A: Yes, you can change your Medicare supplement plan if you are not happy with it. You can also find a different provider if you wish. Sticking with a single provider and plan will certainly make things simpler for you. But if you’re not satisfied, you can switch as often as you like. Keep in mind too that, even if you choose the same plan from a different provider, it may wind up costing you more.
Q: Can I get a Medicare supplement plan if I have a pre-existing condition?
A: During the open enrollment period we discussed earlier, you have what are known as ‘guarantee issue rights’ (15). Guarantee issue rights ensure you cannot be turned down for a Medicare supplement plan, even if you have a pre-existing condition. Also, the insurer cannot charge a higher premium because of the pre-existing condition. What the provider can do in that case is impose a waiting period of up to six months before coverage begins.
Q: Why can’t I get a Medicare cost plan like my parents did?
A: Medicare cost plans were eliminated January 1, 2019. The reason the government ended these plans is because it determined they were no longer necessary. Medicare cost plans were introduced to serve areas where Medicare Advantage plans were not available. Today, however, Advantage plans are available in every state. So Medicare cost plans became redundant and were ended.
Q: Should I get a Medicare Advantage plan instead?
A: Medicare Advantage plans are extremely popular but they are not without their downside. For example: Medicare Advantage plans require you to see an in-network doctor. If you go outside the network, any expense not covered by original Medicare is your responsibility. Also, in some cases, you will be required to receive prior authorization for a service. If you fail to do so, you will not be covered. Finally, Medicare Advantage plans do not typically cover copays.
Q: What is the ‘ANOC’?
A: ANOC stands for ‘Annual Notice of Changes’. It is a document Medicare supplement plan providers are required by law to send to plan members every year. The ANOC typically arrives in the mail during the fall. It details updates (if any) to the various plans. Those changes may include cost increases or changes in service. Many people use the ANOC to help them decide whether it is time to change to a different plan.
Q: Should I get a Medigap plan instead of a Medicare supplement plan?
A: There is some confusion surrounding the term ‘Medigap’. The fact is, ‘Medigap’ is just another name for Medicare supplement plans. The exact origin of the term is unclear, but many providers use the term today because it is easier than saying or writing ‘Medicare supplement plan’.
Medicare supplement plans can make the difference between enjoying your retirement and filing for medical bankruptcy in your 70s.
As long as you enroll during the six-month open enrollment window, you are guaranteed to be accepted, even if you have a pre-existing condition. However, if you procrastinate and fail to secure a Medicare supplement plan during open enrollment, you may be turned down, or there may be conditions attached to your acceptance.
The providers profiled above are reliable, financially sound companies, many of whom have been providing supplemental Medicare plans for decades. When talking to a representative, make sure you get a plan designed to address your specific area of concern.
For cpoe.org’s #1 recommended Medicare supplement plan, click here.