Title card for Medigap
Health Insurance,  Saving Money,  Stop Being Broke

Medigap: Supplemental Health Insurance For Seniors

Previously we wrote about supplemental health insurance for people under 65. While our site isn’t geared toward senior citizens – our site is focused toward getting people out of debt and keeping them out of debt. If you’re nowhere near the age of 60, bookmark this page and come back later. It might be worth your time to read for your loved ones that are nearing 65. If you are 60 or over, make sure you keep reading on for important information that could prevent you from a financial catastrophe. This information is on supplemental health insurance for seniors – Medigap.

What we will talk about

  • Layman’s guide to health insurance
  • What is Medigap?
  • Why do I need Medigap?
  • Am I eligible for Medigap?
  • Where to go for Medigap?
  • What is the best Medigap plan?
  • Disclaimer

Layman’s guide to health insurance

Before we begin, because health insurance is a complex topic to understand, here are some terms you have to understand:

  • Premium: what you have to pay each month
  • Out of pocket costs: Any additional costs you have to pay in addition to your premium
  • Deductible: a type of out of pocket cost that you must pay before your insurance starts paying
  • Coverage: What your insurance covers. This can speak to the type of procedures and/or how much you pay for your insurance. 

What is Medigap?

Medigap is a type of supplemental health insurance. Supplemental health insurance is designed to help pay out of pocket costs for you that your health insurance does not cover. Medigap is a type of supplemental health insurance designed and controlled by the government to work with Medicare. Like many types of supplemental health insurance, Medigap has different coverage types. There are ten in total as of 2019, but due to rule changes, there will be eight in 2020. The government has simply named the 10 Medigap plans A-N.

Why do I need Medigap?

Quite simply, if you are not on a Part C plan (Medicare Advantage) or a senior that does not have a large amount of cash stowed away – Medigap is a great idea. Medigap helps pay for your Part A (hospital insurance) out of pocket costs and (until 2020) your Part B (physician insurance). People often think that seniors can essentially get care without paying for anything. That is completely wrong.

The costs associated with Medicare are high

Unless you have some other type of insurance, you generally need to pay $135 for doctor’s insurance (Part B). Additionally, every time you go to the hospital (Part A) you must pay a $1,364 deductible. On top of your hospital stay, you will need to pay between $341-682 per day that you stay past 60 days. This means a stay at the hospital may easily bankrupt a senior citizen! You can easily have a bill over $20k from a hospital stay. Additionally, a little known fact is your deductible for hospital (Part A) stays restarts every 60 days. For instance, you stay in the hospital during January for 3 days and met the $1,364 deductible. Then, in the same year in May you back to the hospital, you would have to pay $1,364 deductible again before Medicare helps pay again since it was past 60 days. All these bills can quickly rack up and cause a senior citizen to go into bankruptcy. Unlike a young person going into bankruptcy, a senior citizen faces poverty since they are unable to work.

You probably have a finite amount of money

“You can’t predict over 30 years of medical bills that you might have.”

The average American has less than $200,000 in their retirement at their retirement. Sadly, this is not enough money to last during retirement. Even when considering Social Security checks, which range greatly from 10k to 30k, it is hardly enough to survive. Most importantly, you can’t predict over 30 years of medical bills that you might have.

Eligibility for Medigap

To become eligible for Medigap, you must have Part A (hospital insurance) and a Part B plan (physician insurance). You cannot have a Part C (Medicare Advantage) plan. During the first 6 months you first enroll in Medicare’s Part B plan, you are allowed not penalized for not enrolling into a Medigap plan. What this means is you are allowed to enroll into a Medigap plan and expect no increase in cost during the lifetime of your policy. However, if you do not enroll initially or disenroll/change your Medigap coverage, you are still eligible for Medigap as long as you have Part A and Part B. The only catch is after the initial 6 month enrollment period, companies are not required to sell you Medigap and can sell it at vastly different prices.

Where to go for Medigap?

As a starting point, you should visit the Medicare.gov website and review the options available to you. On the website, you will need to enter your zip code and they will show the approximate cost of the different plans you can choose from. Regardless of which plan letter you choose, make sure you call through the different options for Medicare supplement for pricing and choose the lowest price.

How to shop for plans

Because all Medigap plans are the same and required to have the same coverage based on their lettering, you have no variation. In my personal experience, I’ve found seniors overwhelmingly choose the AARP Medicare Supplement Plan through United Healthcare based solely on their trust in AARP. Don’t do this! Avoid choosing something based on its brand name that you trust. You are only wasting your money because the government regulates all Medigap plans which means they all offer the same basic coverage. Instead, pay attention to how the pricing is done. Medigap plans fall into three categories:

  • Issue age pricing: Premiums are lower for younger buyers and won’t change as you get older
  • Community pricing: Premiums are the same no matter how old you are. Premiums may go up from year to year.
  • Attained age pricing: Premiums are lower for younger buyers but go up as you get older.

Based on your situation, one might be better than the other. However, if you are unhealthy, you may want to strongly consider issue age pricing. If you are healthy, you may want to consider attained age pricing. Check with a health insurance specialist before making any choices.

Which letter is the best Medigap plan?

For the longest time, I would suggest Medigap Plan F as the best plan. The reason why is, it covers generally all out of pocket costs for both Medicare Parts A and B. However, Plan C and F will be discontinued after 2020 due to new rules for Medigap plans. I would highly consider Plan G since it gives the most protection compared to the other Plans. For people who get to the age of 65 and not obese, life expectancy is increasing. I recommend more protection because you do not know what your situation will be in the next 30 years.

Note: For people in Plan F, you have the option of keeping your coverage or changing your coverage. 


The material and information contained on this website is for general information purposes only. You should not rely upon the material or information as a basis for making any business, legal, or any other decision. While we endeavor to keep the information up to date and correct, Bunny Hops To Wealth makes no representations or warranties of any kind, expressed or implied about the completeness, accuracy, reliability, suitability, or availability with respect to the website or the information in the above post. Any reliance you place on such material is therefore strictly at your own risk. Prior to making any health insurance decision, make sure you consult a health insurance expert before making any changes. 

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