Rating Medicare Supplemental Plans : Are all the plans the same?

There are ten medicare supplement plans approved by medicare and offered by various private insurance companies. We will look at rating these new plans as they have been reconstituted effective June 1, 2010 based on changes made by medicare.

What are the Different Plans?

Medicare has established ten different plans that are lettered A through N. Under the new set of plans, letters E, H, I and J are missing because medicare eliminated these plans as of May 31, 2010. The current medicare supplement plans vary based on the areas covered, the amount of coverage and the cost of the plans.

Medicare produces a booklet called ‘Choosing a Medigap Policy’ and on page 13 there is a chart of the medicare supplement plans. All of the medicare supplement plan variations are displayed, based on the above criteria, excluding premiums.

What Do I look for When Rating Medicare Supplement Plans?

A good place to start when rating plans is to compare coverages. There are ten areas of coverage addressed by medicare supplement plans. Plan F covers all of these areas 100%. Other plans’ coverages will either not cover certain areas or will require the applicant to pay some portion of the cost.

Plans A, B, C and G provide 100% coverage for areas they do address. Plan N does as well with the caveat that copayments are required for office and emergency department visits similar to many employer plans. Plans K and L are cost sharing plans with out of pocket limits similar to Medicare Advantage plans.

How Do I Know Which Plan is Right for Me?

Rating medicare supplement plans should start with determining an individual’s comfort level with risk versus cost. Full coverage means spending more on a monthly premium but never incurring additional costs when services are used. Choosing a plan other than full coverage will mean the senior pays for areas not covered by their plan, making minimal copayments for medical visits or cost sharing up to $4,620 for 2010 for services rendered.

It will depend on health history, budget and each person’s aversion to risk in determining which plan best suits their particular circumstances. According to Wikipedia, medicare consumed 20% of the US economy in 2008 and this number continues to rise. It is inevitable that additional changes will be necessary to keep the system viable.

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