2-Minute Money Manager: What’s the Best Medicare Supplement Insurance?

Advertising Disclosure: When you buy something by clicking links on our site, we may earn a small commission, but it never affects the products or services we recommend.

Senior Couple Hospital
Monkey Business Images / Shutterstock.com

Welcome to the “2-Minute Money Manager,” a short video feature answering money questions submitted by readers and viewers.

Today’s question is about Medicare Supplement Insurance; specifically, whether you need it and, if so, how to get the biggest bang for your buck.

Watch the following video, and you’ll pick up some valuable info. Or, if you prefer, scroll down to read the full transcript and find out what I said.

You also can learn how to send in a question of your own below.

For more information, check out “How to Pick the Best Medicare Supplement Plan in 4 Steps” and “7 Facts You Need to Know About Medicare.” You can also go to the search at the top of this page, put in the word “Medicare” and find plenty of information on just about everything relating to this topic.

And if you need anything from a better credit card to expert help with Social Security, be sure and visit our Solutions Center.

Got a question of your own to ask? Scroll down past the transcript.

Don’t want to watch? Here’s what I said in the video

Hello, and welcome to your “2-Minute Money Manager.” I’m your host, Stacy Johnson, and this answer is brought to you by MoneyTalksNews.com, serving up the best in personal finance news and advice since 1991.

Okay, let’s get to our question for today. It comes to us from Polly.

What’s the best Medicare Supplement Insurance?

Let’s get some definitions down, then we’ll talk a little bit about how to find the best Medicare supplement plan.

Here’s Medicare

When you turn 65, provided you’ve paid into the program adequately over your working life, you’ll qualify for Medicare, which is simply government-subsidized health insurance.

Medicare has several parts, including part A, which covers hospital stays, and part B, which covers doctor visits. Medicare part C concerns Medicare Advantage plans and part D covers prescription drugs.

After meeting a deductible, part A — hospitalization — covers 100 percent of your expenses, up to certain limits.

With part B — doctor visits — you’re expected to cover some of the costs through coinsurance, copayments and deductibles, which can add up quickly.

This is where Medicare Supplement Insurance, also known as Medigap, comes in.

Medicare Supplement Insurance

Medigap, as the name implies, covers the “gap”: expenses not covered by Medicare. It’s another policy on top of Medicare to help pay copayments and deductibles, so you won’t have as much out-of pocket expense.

When you start researching this stuff, you’re also going to hear something about Medicare Advantage Plans, which is a totally different thing.

Medicare Advantage plans are more like HMOs: Rather than going to any doctor you choose, you’ll go to one medical group. In exchange for giving up the ability to visit any doctor, you’ll likely get some extra services, it may cost less money and it will pay more of your expenses with less out of pocket.

But it’s important to note that Medicare Advantage plans are not the same thing as Medigap or Medicare Supplement Insurance.

Medicare Supplement Insurance is fairly easy to shop, and shop you should. A lot of different companies sell it, but it’s standardized, which makes comparisons simple.

All Medicare supplemental policies fall into categories, identified by letters that go from A to N. All policies with the same letter have to offer the same coverage, so all you have to do is compare cost and the quality of companies offering coverage.

Where can you learn and where can you compare these plans? Medicare.gov. It will explain all about Medicare supplement plans and will even allow you to shop specific plans based on where you live.

Bottom line? While Medicare supplement plans aren’t super-simple, understanding and comparing them isn’t rocket science. So do it, and start well before your 65th birthday so you’ll have plenty of time for stress-free decision-making.

Hopefully that answers your question, Polly. And I hope the rest of you will join me right here next time!

Got a question you’d like answered?

You can ask a question simply by hitting “reply” to our email newsletter, just as you would with any email in your inbox. If you’re not subscribed, fix that right now by clicking here. It’s free, only takes a few seconds, and will get you valuable information every day!

The questions I’m likeliest to answer are those that will interest other readers. In other words, don’t ask for super-specific advice that applies only to you. And if I don’t get to your question, promise not to hate me. I do my best, but I get a lot more questions than I have time to answer.

About me

I founded Money Talks News in 1991. I’m a CPA, and have also earned licenses in stocks, commodities, options principal, mutual funds, life insurance, securities supervisor and real estate.

Got any words of wisdom you can offer on today’s question? Share your knowledge and experiences on our Facebook page. And if you find this information useful, please share it!

Get smarter with your money!

Want the best money-news and tips to help you make more and spend less? Then sign up for the free Money Talks Newsletter to receive daily updates of personal finance news and advice, delivered straight to your inbox. Sign up for our free newsletter today.