YOUR FINANCIAL TOOLKIT: Retirement


Buy a Medigap Policy to Supplement Medicare

1. Pick a letter. You have nine choices: Coverage and prices generally increase as you move through the alphabet from Plan A to Plan G; plans K and L are high-deductible policies, which can save you money on premiums but have higher out-of-pocket costs. Most popular is Plan F, which tends to offer the best balance of coverage and price (go to www.medicarerights.org for details).

2. Check the pricing method. Premiums for "attained-age" policies increase as you get older. Premiums for "issue-age" policies increase with health-care inflation but not because of your age. "Community-rated" policies are similar to issue-age policies, with everyone in the community paying the same price regardless of age.

3. Compare prices. Plans with the same letter offer exactly the same coverage. Most state insurance departments list prices for medigap policies in your area, or use the Medicare Options Compare tool at www.medicare.gov/mppf.

4. Pick the lowest-cost issue-age or community-rated policy.

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