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Carla Fried: New to Medicare? How to simplify choosing a Medigap plan

Carla Fried, on

Published in Home and Consumer News

Between now and 2030, when the last baby boomers turn 65, about 10,000 people a day will officially become eligible for Medicare. That means 10,000 people a day have to make sense of what Medicare coverage to sign up for.

Anyone who opts to enroll in Original Medicare (rather than Medicare Advantage) will be on the hook for 20% of costs they run up outside of a hospital. This is known as Part B of Medicare: the doctor appointments, tests and treatment that occur when you are not admitted to a hospital.

There is no annual maximum out-of-pocket cost for what you might be required to spend to cover your 20% “cost sharing.”

Medicare supplement insurance solves the 20% problem

Some people who enroll in Original Medicare have their Part B copays covered by complementary retirement benefits they have from a former job. This typically is for public sector employees.

But if you don’t have a complementary plan to cover Part B expenses, you need to buy one.


Medicare supplement plans, also known as Medigap, are private insurance plans to help pay for out-of-pocket Medicare costs. Medigap policies can cover part or all of your Part B copays, as well as charges you’re liable for when you are admitted to a hospital (Part A of Medicare).

In a design failure that predates all we have learned from behavioral science about having too much choice, the government has set up a maze of eight different Medigap policies that private insurers can offer to new enrollees. That’s a lot to get confused about.

Relax. If you are new to Medicare, there is one type of plan that provides blanket coverage, and there is another plan that is very similar but with a few additional out-of-pocket costs.

Those are the two plans to focus on first. And if you find them affordable, they provide the best out-of-pocket protection.


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