Medicare supplement plans with prescription drug coverage

Methodology

To determine the best Medicare Supplement providers of 2022, the Forbes Health editorial team evaluated all insurance companies that offer plans nationwide in terms of:

• How many states in which they provide coverage
• The number of Medigap plan types they offer
• Whether they offer Part D (prescription drug) coverage specifically
• Whether they can provide additional coverage beyond what’s required of Medigap plans by federal regulations
• A.M. Best rankings in terms of financial health (which impacts how reliable an insurer is when it comes to paying claims)
• J.D. Power rankings in terms of consumer feedback

We focused exclusively on providing general summaries of the companies and their reputations. In order to provide specific plan recommendations accurately, it’s important to take into account the ZIP code and demographic details of the individual seeking insurance coverage. To do so, we recommend using Medicare.gov’s plan finder tool or seeking the expertise of an independent, agnostic insurance agent.

What Is Medicare Supplement (Medigap)?

Medicare Supplement, or Medigap, is a private insurance policy purchased to help pay for what isn’t covered by Original Medicare (which includes Part A and Part B). These secondary coverage plans only apply with Original Medicare—not other private insurance policies, standalone Medicare plans or Medicare Advantage plans.

Medigap plans generally don’t cover prescriptions, so you may want to consider enrolling in Medicare Part D, which specifically covers prescription drugs, or a Medicare Advantage plan that includes drug coverage.

Medigap plans aren’t the same as Medicare Part C, also known as Medicare Advantage. While a Medicare Advantage plan can serve as an alternative way to get Medicare Part A and Part B coverage, Medigap plans only cover what Part A and Part B do not.

Medicare Supplement Eligibility

To be eligible for a Medigap plan, you must be enrolled in Original Medicare Part A and Part B, but not a Medicare Advantage plan. You must also be in one of the following categories:

• Age 65 and older
• Under 65 and receiving disability benefits
• Under 65 and diagnosed with amyotrophic lateral sclerosis (ALS)
• Under 65 and diagnosed with end-stage renal disease (ESRD)

Companies could delay coverage up to six months for a pre-existing condition if you didn’t have creditable coverage (other health insurance) before enrolling in Medicare.

Your Medigap open enrollment period starts the first month you sign up for Medicare Part B insurance at age 65 or older, even if you delayed enrollment because you had group health coverage. Medigap policies cannot be canceled by the insurance company even if your health status changes as long as you pay your premiums. If you’re already enrolled in a Medigap plan, you may apply to buy or switch plans.

How Much Does Medicare Supplement Cost?

“Medicare supplements vary in rate by carrier and plan choice. Not every carrier offers all plans,” says Brandy Corujo, partner of Cornerstone Insurance Group in Seattle. Policy prices for Medigap are set by the individual insurance companies selling them. Companies set their premium pricing in one of three ways:

• Community-rated: Premiums are the same regardless of age.
• Issue or entry age-rated: Premiums are cheaper if the policy is purchased at a younger age. Premiums do not increase with age.
• Attained-age-rated: Premiums are based on your age at the time of purchase. As you age, your premium increases.

Some factors that may also influence your rates include your location, gender, marital status and lifestyle (like if you smoke).

Medigap plans are purchased through a private insurance company, and you pay a monthly premium for the policy directly to the company. Medigap policies can be purchased from any insurance company licensed to sell one in your state, but available policies and prices will depend on your state. Medigap plans only cover one person, so married couples need to purchase separate policies.

Medicare Supplement Plans F, G and N: Which Is Best?

Medicare Supplement plans F, G and N are the most popular Medigap plans with the highest rates of enrollment nationwide. Which one is best depends on the beneficiary and their specific health care needs.

By and large, Plan F is the most popular Medicare Supplement plan due to its coverage of more out-of-pocket Medicare costs than any other Medigap plan type. Plan F pays for Medicare deductibles, copays and other costs associated with Medicare-covered services, so beneficiaries don’t have to worry about out-of-pocket expenses. However, Plan F is no longer available to any Medicare beneficiary who became eligible for Medicare on or after January 1, 2020.

Due to these enrollment restrictions, Plan G is becoming the most popular Medicare Supplement plan type for new Medicare enrollees, as it covers the most Medicare costs of any Medigap plan type that’s available to all beneficiaries. Plan G beneficiaries only have to pay their annual Medicare Part B deductible, after which the plan provides 100% coverage on all Medicare-covered medical expenses.

Lastly, Plan N is the third most popular type of Medicare Supplement plan, which supports enrollees interested in a broad range of coverage. It provides 100% of Medicare Part B coinsurance costs, with the exception of $20 copays for office visits and $50 copays for emergency room (ER) visits. Beneficiaries are responsible for the annual Part B deductible as well. This structure keeps the cost of the plan relatively low despite risking higher out-of-pocket expenses, which is why it’s generally preferred by those with fewer medical needs.

What Are the Benefits of a Medicare Supplement Plan?

One of the primary benefits of Medicare Supplement plans is that they help mitigate the costs of health care not covered by Original Medicare, such as copayments, coinsurance and deductibles. Any Medicare beneficiary who’s concerned about incurring potentially high out-of-pocket costs should consider Medigap plans and how they can help cover these expenses.

Some Medicare Supplement plans also provide coverage for services that Original Medicare doesn’t cover, such as medical care needed during travel outside the U.S. Medicare enrollees who enjoy frequent travel often enjoy the additional layer of protection.

Medicare Advantage vs. Medicare Supplement

Medicare Advantage plans serve as a substitute for Original Medicare, providing that same coverage plus additional benefits like prescription drugs coverage (Part D). Meanwhile, Medicare Supplement plans, or Medigap plans, are sold by private insurance companies to people enrolled in Original Medicare to help fill the gaps of that coverage.

The 10 types of Medigap plans provide standardized coverage to beneficiaries nationwide and help pay for things like deductibles, coinsurance and copays. Because plan coverages are standardized, only monthly premium rates vary from provider to provider. It’s also important to note that Medigap policies don’t cover prescription drugs. A person enrolled in Original Medicare who wants prescription drug coverage needs to purchase a separate Medicare Part D plan in addition to any Medicare Supplement plan.

Meanwhile, Medicare Advantage policies are only standardized in that they must provide the same benefits of Original Medicare, as the plans serve as a direct substitute. After this threshold is met, private insurance providers can add any number of benefits and services to a plan—prescription drugs, dental care, vision care and more—to make them more comprehensive (and often more expensive). Monthly premium rates for Medicare Advantage plans tend to vary dramatically based on location and the list of benefits provided.

How to Choose the Right Medicare Supplement Plan for You

To find the right Medigap plan for you, first ask yourself:

• What are my health care needs now and possibly in the future? Consider your current health status as well as your family history.
• What is my health care budget now and in the future?

Medicare Supplement Plans Comparison Chart

There are 10 standardized Medigap plans with letter names A through N. Plans with the same letter must offer the same basic benefit regardless of the insurance company providing the plan. For example, all Medigap Plan A policies provide the same benefit, but health insurance company premiums vary based on the way they choose to set rates—community-rated, entry age-rated or attained-age-rated.

How to Sign Up for Medigap Plans

Signing up for a Medigap plan is easy. “Medicare supplements may be bought through an agent or from the carrier directly,” says Corujo. Since there’s no annual open enrollment period, you may join at any time.

To buy a Medigap policy, it’s best to enroll during your Medigap Open Enrollment period, which lasts six months. This period begins the first month you have Medicare Part B and are 65 or older. You can buy any Medigap policy sold in your state during this time, even if you have health problems.

Follow the steps below to purchase your Medigap plan:

• Enroll in Medicare Part A and Part B. This step is required to purchase a Medigap plan. Remember: Medicare and Medigap plans don’t cover prescription drugs, so you may also want to consider enrolling in a Medicare Advantage plan or a plan that offers drug coverage. If you choose a Medicare Advantage plan, you cannot then enroll in a Medigap plan. If you’re already enrolled in a Medicare Advantage plan, consider whether a Medigap plan would benefit you; if so, drop your Medicare Advantage plan before buying a Medigap plan.
• Find which insurance companies in your state are licensed to sell Medigap plans by visiting Medicare.gov.
• Compare costs between companies. Costs will vary depending on the company, state and other factors, but the coverage they offer will be the same.
• Select a Medigap plan that works best for you and purchase your policy.

When Is the Best Time to Sign Up for Medicare Supplement?

The best time to enroll in a Medicare Supplement plan is during your initial Medigap Open Enrollment Period, the six-month window that begins on the first day of the month in which you’re both 65 or older and enrolled in Medicare Part B. This enrollment period is the only timeframe in which insurance companies cannot deny you a policy based on your health status or any medical condition.

Attempting to enroll in a Medicare Supplement plan at any other time outside this enrollment period could result in penalty fees or denial of coverage.

Confused About Medicare Supplement Insurance Options?

Find committed, licensed agents who work to understand your coverage needs and find you the best Medicare option. Click Get A Quote or call 866-402-0504 to speak with a licensed insurance agent today.

Frequently Asked Questions (FAQs)

Is it better to have Medicare Advantage or Medigap?

Whether a person purchases a Medicare Advantage or Medigap plan depends on their specific health care needs. Medicare Advantage plans serve as a substitute for Original Medicare, providing the same coverage plus additional benefits like prescription drugs coverage (Part D). Meanwhile, Medigap plans are sold by private insurance companies to people enrolled in Original Medicare to help fill the gaps of that coverage. Medigap plans provide standardized coverage and help pay for things like deductibles, coinsurance and copays. However, Medigap policies don’t cover prescription drugs. A person enrolled in Original Medicare who wants prescription drug coverage must purchase a separate Medicare Part D plan in addition to any Medicare Supplement plan.

What is the most popular Medicare Supplement plan?

Plan F, Plan G and Plan N are the most popular types of Medicare Supplement plans. Medicare Supplement Plan F is the most comprehensive Medigap option available, providing beneficiaries with 100% coverage of Medicare-covered medical expenses after Original Medicare pays its portion. Medicare Supplement Plan G leaves beneficiaries responsible only for their annual Medicare Part B deductible, after which the plan provides 100% coverage on all Medicare-covered medical expenses. Finally, Medicare Supplement Plan N is considered a pay-as-you-go type of plan that tends to be the most affordable for beneficiaries who don’t require medical care regularly but are interested in emergency coverage.

Is Plan F the best Medicare Supplement plan?

Medicare Supplement Plan F is considered one of the best Medigap plan types due to its comprehensive nature. However, only those who were eligible for Medicare on or before January 1, 2020, can still sign up for Plan F. People who already had or were covered by Medicare Plan F before January 1, 2020, are also able to keep their plan. All other Medicare enrollees must select another type of Medigap plan.

Information provided on Forbes Health is for educational purposes only. Your health and wellness is unique to you, and the products and services we review may not be right for your circumstances. We do not offer individual medical advice, diagnosis or treatment plans. For personal advice, please consult with a medical professional.

Forbes Health adheres to strict editorial integrity standards. To the best of our knowledge, all content is accurate as of the date posted, though offers contained herein may no longer be available. The opinions expressed are the author’s alone and have not been provided, approved or otherwise endorsed by our advertisers.

Tamrah Harris is a registered nurse and certified personal trainer through the American College of Sports Medicine. She is the founder and CEO of Harris Health and Wellness Communications. She has over 25 years of experience in healthcare with a passion for health education and wellness.

Alena is a professional writer, editor and manager with a lifelong passion for helping others live well. She is also a registered yoga teacher (RYT-200) and a functional medicine certified health coach. She brings more than a decade of media experience to Forbes Health, with a keen focus on building content strategy, ensuring top content quality and empowering readers to make the best health and wellness decisions for themselves.

Jessica is a writer, editor and media professional who has spent her career working with some of the most influential names in media. Prior to joining Forbes Health, Jessica was the manager of creative communications at Hearst, where she specialized in high-level production and project management. As a freelance writer, Jessica has written across a range of topics, including entertainment, travel and career. Her work can be found in Variety, Paste Magazine, The Muse and on her personal website (jessicamlester.com).

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