Medicare Supplements Explained

Also known as Medigap plans, Medicare Supplements are some of the best health insurance coverage you can get anywhere. These plans act as secondary insurance to cover what is left over after Medicare Part A and Part B pay their share. Let’s explore how these plans work!

How Medicare Supplements Work

Compared to all of the other parts and plans that make up Medicare, the Supplement plans are very simple. These are the defining characteristics of Medicare Supplements:

#1 – They're Standardized

There are many Medigap options to choose from, plans are alphabetical from Plan A all the way through Plan N. The government requires that all Medicare Supplement plans are standardized by plan letter.

Coverage is standardized by plan letter
Plan G with Company A is EXACTLY the same as Plan G with Company B.

This means that when you are shopping for Medicare Supplement plans, you really are comparing apples to apples.

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#2 – No Networks or Referrals

Medicare Supplements are secondary insurance, so you remain on Original Medicare Parts A and B. This means you keep the “network” of Medicare itself. We refer to this as having no network at all because over 95% of all providers in the nation accept Medicare.

As long as a provider accepts Medicare, they are required to accept your Medicare Supplement as well. You don’t have to worry about certain doctors only accepting Company A’s Supplemental plans but not Company B. It’s required.

If you travel frequently or have homes in different parts of the country, you’ll be able to use your plan no matter where you are.

#3 – Guaranteed Renewable

Medicare supplements are guaranteed renewable. This means that no matter how many medical bills you have, your plan can never terminate your coverage. The only way to lose your Medigap plan is if you stop paying your monthly premiums.

This is why we highly recommend everyone on a Medigap plan to set up automatic bank withdrawals each month. The last thing you want to happen is to forget to pay your bill and now you lose coverage that you may never be able to get back again!

Set up monthly payments from your bank account
If you’re in the hospital and forget to mail in your monthly bill, you could lose your coverage when you need it the most.

#4 – Easy Claims Processing

The claims process for Medicare supplements is very simple. Your provider files a claim with Original Medicare first since it will be your primary insurance. Once that is paid, they’ll send a copy of your claim to your Medicare supplement insurance company.

Medigap companies don’t get to question, “Hmm, should we pay this claim?”. As long as the claim was approved by Medicare, the Supplement company WILL pay its share.

FAQ

Why Do Supplement Rates Go Up?

There are 2 types of rate increases for Medicare Supplement plans:

Planned – Many companies use “Attained Age” pricing to determine your rate. Each year, you are older and therefore will have a built-in rate increase due to your higher age.
Unplanned – This happens when claims are higher than the insurance company expected. Higher inflation can also affect this.

What Makes One Company Better Than Another?

The major differentiator is rate stability. Oftentimes we see new companies enter the market with the lowest price, only to raise rates significantly in the years to come.

Since your health must qualify to switch to another Medicare Supplement, these companies can trap many beneficiaries in their plans.

Because of this, we prefer companies that have a long history of stable rates and a reputation to uphold.

Are There Any Drawbacks to Choosing Medigap?

There are 3 main drawbacks to Medicare Supplements:

You will pay more on a monthly basis.
You will have to get a Part D drug plan separately.
You won’t get extra benefits like dental and vision coverage that is built into many Advantage plans.

Moving States: What Happens to Medicare Supplement Rates?

If you’re considering moving to another state, it’s important to understand how that could affect your Medicare Supplement premium. Unfortunately, it’s not always as simple as “new zip code = new rate.”

Many Carriers Use Regional or Blended Pricing

Some Medicare Supplement insurance companies use what’s known as blended pricing. This means your premium may not be based only on your zip code. Instead, insurers group states or regions together and charge an average premium across that area.

Even if you move from a high-cost state like New York to a lower-cost one like North Carolina, your premium may stay the same, or only drop slightly because of this blended approach.

Examples of How It Works:

UnitedHealthcare (AARP): Often uses regional pricing. Moving to a cheaper state may not reduce your rate unless you apply for a new plan.
Mutual of Omaha: May allow you to keep your original rate even after a move, unless you cancel and reapply in your new state (which usually requires medical underwriting).
Cigna & Humana: If you keep your current policy number, your rate may not change post-move.
Blue Cross Blue Shield (Anthem/Elevance): Some affiliates use strict ZIP-based pricing; others price regionally across multiple states.

Can You Switch to a Lower-Priced Plan?

Yes, but you’ll usually need to apply for a new policy in your new state, and most of the time this means going through medical underwriting. That’s why it’s critical to compare options before you move, or at least as soon as you do.

Bottom Line

Just because you move doesn’t mean your premium will automatically adjust. Every carrier handles relocations differently. If you want to explore better pricing in your new state, our team can walk you through what’s possible, and what’s smart.

Summary

Medicare Supplements are extremely popular, especially with people who were paying for employer group health insurance that cost more money and delivered less coverage. When it comes to Medigap plans, the key decisions are: can you qualify for a Medicare supplement and can you afford one.

Rates are determined based on your zip code, age, gender, and smoking status. The simplest way to compare the different plans and prices available in your area is to schedule an appointment with our team.

Sylvia Gordon, aka Medicare Mama^®, is an expert on all things Medicare and Social Security. She is the 2nd Generation here at The Medicare Family and has served on the advisory boards of major insurance companies like UnitedHealthcare^®, Cigna, and Anthem. In her free time, she can be found taking care of her animals (dogs, goats, peacocks, chickens), and reading a good book. Learn More.

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