Once a person newly introduced to the world of Medicare decides that Medicare Supplement insurance plans are right fit for their needs, the focus then turns to comparing the Medicare supplement plans available. This can be overwhelming as most of the terminology (part A, Part B, excess, etc) is new to them. From dealing with the plans day to day for more than a decade now, we feel well versed in the the pro\’s and con\’s of each plan and feel we can break down the differences very simply. If anything, it will get you on the right path when comparing the Medigap options.

We\’ll save our final analysis in terms of which plan makes the most sense for the end but let\’s first look at how to analyze them and what\’s really important in this comparison. Let\’s first spell out the major gaps (hence the name Medigap) of traditional Medicare that we\’re looking to fill with a supplemental insurance plan. There are 3 big ones we really want to focus on and the first one we\’ll discuss actually merits more concern than the other two. Medicare is essentially an 80/20 plan with you playing 20% after deductibles are met. That 20% is the real reason to even consider a Medicare supplement insurance plan since there\’s no cap. You could conceivably pay 20% indefinitely with large enough bills and that kind of uncapped exposure or risk is what we\’re trying to address first and foremost. The good news is that traditional Medicare supplement insurance plans cover this 20% so we can check that off our list. The other two main concerns are the deductibles, one for Part A (hospital) and the other for Part B (physician). Some Medicare supplement plans cover one or more of these while others don\’t. This is the deal. The different in cost over a year\’s time between a plan that covers the deductibles and one that doesn\’t just justify taking a plan without the deductible covered especially since we\’re making a decision for potentially decades and decades of increased probability that you\’ll hit one or both deductibles. It doesn\’t make sense to save $10 monthly and pay a $100+deductible for physician charges (increases over time) if health cares costs increase on average as a person ages. There\’s not enough savings to take that risk.

Those are the big three when comparing Medicare supplement insurance plans. What about some of the other differences. Excess is probably the next key consideration. Excess is the ability of a doctor to charge up to 15% above what Medicare allows. Some supplements cover this 15% charge while others don\’t. Again, since it\’s an uncapped exposure, it makes sense to cover excess especially in light of Medicare\’s financial constraints which undoubtedly fall on doctor\’s reimbursement going forward. The trend is towards more doctors charging this excess and you don\’t want a percentage on an uncapped amount like that. We want to cover Excess. The other different benefits aren\’t as persuasive. You have foreign travel but you\’ll likely pay the bulk of this in your premium or lose one of the more important benefits mentioned above that are off limits.

Dennis Jarvis is a licensed insurance agent concentrating on medicare supplement insurance.