How to shop for a Medigap plan

On this edition of the podcast, we’re going to talk about Medigap - one of the most important types of Medicare insurance, and perhaps one of the least understood.

For people enrolled in traditional Medicare, Medigap is used to cover out-of-pocket costs, and caps your total out-of-pocket liability.

Traditional Medicare offers much more flexibility in how you access care when compared with Medicare Advantage plans, which typically use managed-care provider networks. However, Advantage plans come with a built-in cap on out-of-pocket costs--a feature that you won’t find in traditional Medicare.

Some traditional Medicare enrollees receive supplemental gap insurance as a retirement benefit from their former employers to cover some of those out-of-pocket costs. And low-income seniors get help from Medicaid. But for everyone else, it's important to understand the ins and outs of Medigap--when to buy it, the plan options, and how to go about selecting a plan.

I spoke recently about Medigap plans with Bethany Cissell. Bethany is an expert on Medigap at Allsup, a company that provides fee-based assistance with Medicare plan selections. Fee-based help is one way you can get guidance on Medicare plan selections of all types. The most common choice is your State Health Insurance Assistance Program, or SHIP. These are free counseling services that you’ll find in every state, and I’ll provide a link alongside the podcast that can help you find yours.

I spoke with Bethany about the choice between traditional Medicare with a Medigap, versus Medicare Advantage. We also discussed all those notorious Medigap letter options you can choose, and how plans are priced.

Click on the player icon at the top of this post to listen to the interview. The podcast also can be found on Apple Podcasts and Stitcher.

More Medigap resources

How to evaluate Medigap coverage - my latest column for Morningstar.com.

Overview of Medigap plan options- a table created by the Medicare Rights Center.

Financial advisors step it up on Social Security tech

Financial advisors have long understood the importance of Social Security in their clients’ retirement plans. Now, an increasing number are using sophisticated strategies for optimizing those benefits and turning to software for help.

The trend is evident in the substantial increase in market penetration of Social Security optimization software, which jumped to 45% of advisors last year, up from 17% in 2020, according to the T3/Inside Information Advisory Software Survey. Some of that growth reflects Social Security features bundled into mainstream financial planning software, but use of stand-alone solutions is growing as well.

Learn more in my latest column for WealthManagement.com.

What I’m reading

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