Benefits

• Most states sell some or all of 10 standardized Medicare supplement policies. They range from the basic, named Plan A, to the full-featured, such as Plan F. In general, the more benefits a Medigap policy offers, the more it will cost. Plan F features all possible benefits Medigap offers, but is also the most expensive plan. However, it is possible to get lower monthly premiums for Plan F by buying the high-deductible option. As of 2011, the annual deductible for Plan F was $2,000. This deductible must be paid before Plan F benefits start.
  
  

Medicare Select

• Beneficiaries may also be able to get lower monthly premiums by buying their plans as Medicare Select policies rather than regular Medigap. Medicare Select allows users to buy all or some Medigap plans as HMO-style managed care policies. In return for lower monthly premiums, Medicare Select plans require that customers receive their health care from within a network of approved providers. But Medicare Select is not sold in all areas.
  
  

Foreign Travel Emergency Benefit

• Some Medigap policies carry the foreign travel emergency benefit, which helps pay for medically necessary emergency services needed while outside the U.S. However, the foreign travel emergency benefit comes with its own, separate deductible which must be met before the Medigap policy begins paying. In 2011, this was $250 per calendar year. In addition, the foreign travel emergency benefit does not offer coverage at 100 percent reimbursement. Medigap insurance pays 80 percent after the deductible has been met, while the customer pays 20 percent, up to a lifetime benefit limit of $50,000.
  
  

Type of Pricing

• Medigap premiums are decided according to how the insurance company sets its costs. This can be in one of three ways: issue-age rating, community rating or attained-age rating. Issue-age policies base have charges based on the age a customer is when he buys the policy. The monthly premium will not go up in the future because of age, although it can go up for other reasons, such as inflation. Community-rated policies charge the same amount to anyone who buys the same policy, no matter what their age or health is at the time. Most companies, however, use the attained-age rating method. This method bases monthly premium amounts of the customer's current age, meaning that premiums will rise as a person gets older.