What Is Medicare Supplement Insurance?

Clifford PendellWritten by Clifford Pendell
happy retired asian couple If you have Medicare, you should consider supplemental coverage. Medicare supplement insurance plans are purchased to protect the gaps left behind by a traditional Medicare policy.

Selecting the right supplemental Medicare plan can save you thousands of dollars on your annual healthcare expenses by covering the cost of your insurance deductibles, copayments, and coinsurance.

This insider’s guide to supplemental Medicare coverage explains everything to you need to know about Medicare supplement insurance and the benefits it can offer. We’ve also provided an overview of the best Medicare supplement plans and the companies that sell them.

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What is Supplemental Medicare Insurance and How Does it Work?

Medicare Supplement Insurance, also known as Medigap, is a type of health insurance that covers some of the health care costs that traditional Medicare coverage doesn't pay for. These expenses can include copayments for doctor's office visits, coinsurance, and plan deductibles.

How Does Medicare Insurance Work?

Medicare Part A is the most common Medicare insurance plan because every U.S. resident receives it from the government (at no charge) when they reach age 65. Part A Medicare pays for 80% of your inpatient medical expenses including emergency hospital bills.

Part B is the second-most popular type of Medicare coverage. Unlike Part A, Medicare Part B is not provided as a free retirement benefit, it must be purchased by the insured. Part B Medicare pays for 80% of your outpatient expenses including routine visits to your primary care doctor.

Supplemental Medicare Insurance pays the remaining 20% of the medical bills that Medicare Part A and Part B don’t cover. Some Medical Supplement Insurance plans also pay your coinsurance costs, deductibles, copayments, and even prescription drug costs.

With traditional Medicare coverage and Supplemental Medical Insurance in place, you can choose your doctor just like a PPO plan. If you need to see a specialist, no referrals are needed from your primary care doctor, and your coverage works at every hospital and doctor's office that accepts Medicare.

The downside to Medicare Supplement insurance is that it can be more expensive than others plans that limit your care to one provider. It’s also important to note that Medicare offers limited benefits for vision and hearing and some expenses like hearing aids are not covered.

Do I Really Need Medicare Supplement Insurance?

Not everyone needs to supplement their Medicare coverage. If you’re in excellent health, take no medications, and rarely see the doctor, you might money without a supplemental plan. However, for most people, especially those living on a fixed income, it’s not worth the gamble.

Traditional Medicare only covers 80% of the cost of most health-related expenses, so without a supplemental plan, and you are still responsible for 20% or more of the medical bills you incur. This includes routine visits to your primary care doctor and unexpected trips to the hospital.

The average stay at a hospital costs about $16,000, not including surgery. If your medical condition requires surgery, you can expect to owe thousands of dollars on top of any operating room costs, surgeon’s fees, anesthesia expenses, and pre-surgery treatments.

Here’s a breakdown of the most common surgeries and their cost in 2018:

  • heart valve replacement: $170,000
  • heart bypass: $123,000
  • spinal fusion: $110,000
  • hip replacement: $40,364
  • knee replacement: $35,000
  • angioplasty: $28,2000
  • hip resurfacing: $28,000
  • gastric bypass: $25,000
  • cornea: $17,500
  • gastric sleeve: $16,000

*Figures are provided by Debt.org

Paying for a surgery like one of these could spell financial disaster for someone that doesn’t have adequate health insurance. In the next section we’ve provided some actual rates for supplemental Medicare insurance plans by state.

How much does Supplemental Insurance Cost with Medicare?

The cost of your Medicare Supplement insurance plan will depend on a handful of factors including your age, location, and primarily the plan type that you are applying for. Unlike automobile and life insurance, your gender will not have an impact on your rates.

It's also important to note that coverage does not vary from company to company. A Part C Medicare supplement policy from United Healthcare will offer exactly the same benefits as Part C Medicare from Blue Cross, AARP, United of Omaha, etc. The only real difference is the price.

The tables below provide actual rates for the most common Medicare supplement plan, Part F.

Average Cost of Supplemental Insurance for Medicare in California

(65 Year Old - Part F)

CompanyMonthly Rate
Health Net Insurance Company$146.00
Blue Shield of California$149.00
Anthem Blue Cross $152.54
State Farm Insurance Company$152.58
Globe Life and Accident $160.50
AARP Medicare Supplement Plan$163.60

Average Cost of Supplemental Insurance for Medicare in Florida

(65 Year Old - Part F)

CompanyMonthly Rate
United American Insurance Company$239.00
Globe Life Insurance Company$257.50
Everence Association Inc$267.06
AARP Medicare Supplement Plans$275.36
Colonial Penn Life Insurance Company$287.66
Blue Cross and Blue Shield of Florida$290.20

Average Cost of Supplemental Insurance for Medicare in Texas

(65 Year Old - Part F)

CompanyMonthly Rate
Humana Insurance Company$120.72
Aetna Health Insurance Company$121.03
Southern Guaranty Insurance Company$121.79
Guarantee Trust Life Insurance Company$125.58
Prosperity Life Group$125.66
National Guardian Life Insurance Company$128.37

To obtain an accurate quote based on your age, gender, Medicare part, and state of residence, please give us a call toll-free at 855-247-9555. We work with dozens of highly-rated providers and our agents are experts at matching their clients with the best policy available.

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What is the Best Supplemental Insurance Plan for Medicare?

Supplemental Medicare insurance is not one-size-fits all. The best supplement plan for each person depends on a variety of factors including their coverage needs, budget, and anticipated medical expenses. We've compared the most popular Medicare supplement plans below.

Medicare Supplement Plans Comparison Chart for 2020

*Chart courtesy of NAIC.org

Please note: As of January 2020, Plans C and F will no longer be available to new recipients of Medicare. If you already have one of these plans in place, or if your were eligible for Medicare before 2020, you will still be able to purchase one of these plans.

To speak with an expert about your available options, please free free to call us at 855-247-9555 to speak with an agent. Our comparative shopping services are free and our agency is licensed all 50 states.

Top Medicare Supplement Insurance Companies for 2022

Our agency works with dozens of top-rated Medicare supplement providers including companies like AARP and State Farm. In the following section we've outlined our top 10 Medicare supplement insurance companies for 2020. (Please note that the availability of each company varies by zip code)

1. National Guardian

National Guardian is an independently-owned mutual company that is licensed to sell life and health insurance products in 49 states. In addition to Medicare Supplement insurance plans, they also offer long term care coverage, life insurance, and annuity products.

2. Health Net

Health Net is one of the largest health insurers in the United States. The company operates in all 50 states and provides health insurance to nearly 6 million people. Health Net also provides behavioral health services to more than 7.3 million Americans through its subsidiary.

3. Blue Cross / Blue Shield

The Blue Cross Blue Shield Association is a conglomerate of 36 different health insurance companies including Anthem and HCSC. Blue Cross was originally founded in more than 90 years ago in 1929 and today its service corporations insure more than 106 million Americans.

4. Anthem Blue Cross

Anthem Blue Cross is the largest for-profit health insurance provider in California. The company also operates as Anthem Blue Cross Blue Shield in 10 states and in New York as Empire Blue Cross Blue Shield. Anthem is Fortune 500 company and they are publicly-traded on the NYSE: ANTM.

5. American National

Also known as ANICO, American National offers a variety of life and health insurance products in all 50 states and Puerto Rico. The company was founded over 100 years ago in 1905, and they are rated "A-Excellent" by AM Best for their financial strength.

6. Transamerica

best life insurance companies for people with chronic health conditions transamerica

Transamerica is one of the most-recognized names in the life insurance industry, but they also specialize with some health insurance products like supplemental Medicare insurance. They are also rated A+ Superior and have been operating for more than 100 years.

7. Humana

Humana has more than 13 million customers and they are one of the largest health insurance providers in the United Stated. Based in Louisville, Kentucky, the Fortune 56 company is publicly traded on the S&P 500 and the New York Stock Exchange under the symbol:HUM.

8. Mutual of Omaha

mutual of omaha life insurance for seniors

Mutual of Omaha is one of our agency's favorite insurance providers. They have been operating for more than 110 years and are rated "A+ Superior" by AM Best. The company also specializes with a variety of term life insurance products including return of premium coverage.

9. United American

The United American Insurance company is a subsidiary of Globe Life Insurance company that was founded in 1947. United American has been rated as "A+ Superior" by AM Best for over 40 years, and they are publicly traded under the same symbol as the parent company NYSE: GL.

10. Globe Life

Globe Life is rated A+ Superior by AM Best for their financial stability. In addition to offering Medicare Supplement insurance, the company also specializes with whole life insurance for individuals aged 45 to 80. You can learn more about whole life insurance here.

Searching For Right Medicare Supplement Plan? We Can Help!

Everyone's needs for Medicare supplement insurance are different. Some plans cater to individuals that visit the doctor often, while other plans are more beneficial to people that rarely seek medical care. No matter what your situation is, we can help you find the right plan.

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Written by:

Clifford Pendell

Clifford Pendell

Managing Partner and Co-founder

Cliff is a licensed life insurance agent and one of the owners of JRC Insurance Group. He has helped thousands of families of businesses with their life insurance needs since 2012 and specializes with applicants who are less than perfect health. In his spare time he enjoys spending time with family, traveling, and the great outdoors.

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