Which Medicare Supplement Plan is Right for You?

Medicare’s health insurance coverage is a lifeline for people 65 and older, and younger people with certain disabilities, offering them significant protection from healthcare costs. However, there are some gaps in that security which can still leave Medicare members vulnerable to medical costs. Medicare Supplement (also known as Medigap) insurance plans help plug those holes.

Medicare Supplement plans pay for many expenses that remain after Medicare has paid its share. They potentially can save you from paying thousands of dollars in out-of-pocket costs. Medicare Supplement plans are sold by private insurers, like Blue Cross VT, and are regulated by both the federal and state governments.

There are 10 standardized Medicare Supplement plans, with benefit designs created by the federal government. Two of those plans have high-deductible variations available in some states (including Vermont). A few states (Wisconsin, Minnesota, and Massachusetts) don’t follow the federal standardized plan structure and policies sold in those states may vary.  

With so many options to choose from, it can be challenging to pick a Medicare Supplement plan. To make the process easier, we’ll give you some tips for deciding which plan is best for your needs.

Why Sign Up for a Medicare Supplement Plan?  

Original Medicare typically covers 80% of covered healthcare costs, leaving individuals to pay the remaining 20%. The catch is Original Medicare has no limit on yearly out-of-pocket costs. That means Medicare members can suddenly be facing large medical bills. For example, if you need care that costs $100,000, you could be responsible for paying bills totaling $20,000 or more. To protect themselves from high out-of-pocket costs, many people choose to purchase Medicare Supplement plans.

Original Medicare costs that Medicare Supplement plans may cover include:

• Part A (inpatient hospital care, skilled nursing facilities, home health, and hospice) coinsurance and hospital costs
• Part B (outpatient hospital care, doctor visits, and preventive services) coinsurance or copayments
• Blood costs for first three pints
• Part A hospice care coinsurance or copayment 
• Skilled nursing facility care coinsurance 
• Part A deductible 
• Part B deductible 
• Part B excess charges (extra fees providers can bill Medicare enrollees)

Medicare Supplement plans usually don’t cover:

• Prescription drug costs
• Vision, dental, or hearing costs
• Long-term care

In many states, the best time to sign up for a Medicare Supplement plan is the six months after you turn 65 and are enrolled in Medicare Part B. This is known as your Medigap Open Enrollment Period. During this time, you have “guaranteed issue rights.” That means insurers cannot deny you coverage for pre-existing conditions like heart disease or cancer, they can’t consider your medical history, and they can’t charge higher rates based on your health status or history.

If you wait until after that six-month guaranteed issue period, insurers may review your medical records when you apply for a policy and could deny you coverage.

Whether you’ve just turned 65 and are looking to enroll in a Medicare Supplement plan for the first time or are older and want to change your existing coverage, it’s important to learn how to be a wise Medicare Supplement shopper.

High-deductible Options

As we mentioned earlier, there are 10 standardized Medicare Supplement plans, which are designated by the letters A, B, C, D, F, G, K, L, M, and N. Because plan design is set by Medicare, an insurer selling Plan N offers the same set of basic benefits as another company selling Plan N. That standardization makes it easier to compare “apples to apples.” A summary of the 10 standardized plans’ benefits is available on Medicare’s website.

Plan G and Plan F, which offer the most comprehensive benefits, have high-deductible variations. Enrollees in high-deductible plans must pay the first $3,050 in charges (for 2027) that Medicare didn’t pay, before the plan will pay anything. After the deductible is met, the plan pays most costs. High-deductible plans usually have the lowest premiums among Medicare Supplement plans. Blue Cross VT is offering a High Deductible Plan G for 2027.

Plan F is only available to people who were eligible for Medicare before January 1, 2020. Deductibles update annually based on the Consumer Price Index, so check with Medicare for the current amount.

Finding Plans

The easiest way to learn which Medicare Supplement plans are available to you is to use the Medicare Supplement plans finder on Medicare’s website. Enter your Zip code to see a list of plans sold in your area. Another way to find plans available in Vermont is through the state’s Department of Financial Regulation, which approves premium rates that insurers can charge.

Here are a few things to consider when looking for a plan:

• If you use a lot of healthcare services, you might want to focus on plans with the most comprehensive benefits. With such broad coverage, you’ll most likely pay the highest premium. However, the lack of a Part A deductible and no copays or coinsurance for Part B services means you won’t have bills to pay, other than your premium (and the Part B annual deductible, depending on the plan). A comprehensive policy like Plan G is good for people who want to budget for one monthly premium payment, rather than risk paying unexpected medical costs.
• If you rarely use healthcare services and are willing to pay a sizable deductible, consider a high-deductible plan. Your monthly premium will be low—potentially saving you thousands of dollars a year—and you’ll still be protected from very high medical costs. A high-deductible plan is appropriate for people in good health who have money saved that they can use to pay the deductible, such as from a health savings account (HSA). People enrolled in Medicare cannot contribute to an HSA but can withdraw money tax-free from an existing HSA for qualified medical expenses.
• If making a copayment for each visit is attractive, check out Plan N. You’ll be responsible for making a fixed copayment for some office visits and emergency services that don’t result in a hospital stay, but you won’t pay anything else for services covered by Part B (after the annual Part B deductible is met). This type of plan is good for people who visit the doctor often and don’t mind making copayments as they go, yet want to be protected from bigger medical bills.
• If you’re willing to pay a percentage of costs up to a certain point, Plans K and L might be worth looking into. You pay a percentage of approved Part B services up to an out-of-pocket maximum, and then $0 for the remainder of the year. These types of plans are good for people who anticipate using healthcare services during the year and want their plan to pick up part of the costs from the start, but are looking for a lower premium than Plan G or another comprehensive plan.

Once you’ve found a plan design you like, it’s time to check out the insurers selling that plan in your area. On the Medicare website, click on the “view policies” button next to a plan to see the insurers approved to offer that policy where you live.

Entering your age, gender, and other information at the top of the page will give you specific policy pricing. Vermont requires insurers to use community rating for Medicare beneficiaries 65 or older, which means pricing can’t vary depending on age or gender. However, tobacco use or smoking status may affect pricing with some insurers.

Consider Customer Service

Premium prices are important, however they are not the only thing to consider. Also take into account an insurer’s customer service, the company’s financial stability and reputation, and any non-insurance perks offered such as fitness memberships.

Blue Cross VT offers a wide selection of Medicare Supplement plans. For 2027, we offer Plans A, C, D, F, G, and N, along with a new High Deductible Plan G option. With our plans, you can access any doctor or facility in the U.S. that accepts Medicare and you won’t need a referral to see a specialist.

You’ll also enjoy personalized service from our Vermont-based sales and customer service teams. If you need assistance, we’re here for you! In fact, we’ve been recognized by a leading service quality organization for quickly and accurately addressing our members’ needs.

To learn more about the Medicare Supplement policies we offer, check out our Medicare plans for Vermonters. If you have any questions or need help choosing a plan, contact us Monday through Friday, 8 a.m. to 4:30 p.m., at (800) 255-4550 (TTY/TDD: 711) or email consumersupport@bcbsvt.com.

Blue Cross and Blue Shield of Vermont is not connected with or endorsed by the U.S. government or the Federal Medicare Program. To get comprehensive information about your Medicare options, please visit Medicare.gov or call 1-800-MEDICARE (1-800-633-4227), or contact your local State Health Insurance Program (SHIP).