Medicare Supplement Costs

Comparing the costs of Medicare Supplement plans

Medicare Supplement Insurance, or Medigap, helps reduce some of the costs and expenses of healthcae that would other-wise be paid out-of-pocket (like coinsurance, copayments, and deductibles). Before you decide if a Medicare Supplement Insurance plan is right for you, you should understand what they cost and what they cover. There are several different types of Medigap plans, so it’s important to find the right fit.

Your individual Medicare Supplement plan determines the costs

Each Medicare Supplement Insurance plan has its own features, benefits, and levels of coverage that dictate how much you pay.[1] Generally speaking, the fewer out-of-pocket costs, the higher premiums you can expect. And because some doctors may charge you more if they don't accept Medicare, you could be on the hook for more than you think. Finding the right Medigap plan requires weighing your specific needs and considerations.

For example, Plan F and Plan G are considered to be the most comprehensive Medigap plans you can find. Note: Plan F is no longer available for new sign-ups. While they have the most coverage of all the Medigap plan types, they also have the highest premiums.

On the other end of the spectrum, the Medigap Plan K has the least expensive premiums because this plan offers the least coverage of any Medicare Supplement plan (Plan K requires 50% coinsurance on Medicare Part B). This is not necessarily a bad thing. For many, a low-cost plan works well for their unique needs.

Plan D is a middle-of-the-scale plan, which offers more coverage than Plan K, but does not cover the Part B excess charges like the more comprehensive Medigap plans do.

While the ten different Medicare Supplement Insurance plans each have a different cost that depends on the level of additional benefits provided, it is worth noting that each plan type offers the same exact coverage no matter the carrier you choose for your Medicare Supplement plan. For example, if you decide that Plan N is the right plan for you, each carrier will offer the exact same benefits for Plan N, but the monthly premium costs will vary by carrier.

“Medigap costs” = plan premiums and your out-of-pocket costs

The right Medicare Supplement Insurance plan isn’t necessarily the one that costs you the least per month. The right option for you is the one that offers the coverage you need at a price you can afford.

When considering the total costs of filling the gaps in Medicare, consider both plan premiums and out-of-pocket responsibilities. What may be cheaper for your friend could end up being the most expensive plan for you.

Different ways to price Medigap plans

It is also important to know that the premiums associated with each plan may vary. In terms of cost, there are three ways that a Medigap issuer can price your policy. While they cannot price it based on your own particular and unique health circumstances, they instead will consider things such as age and location. Here are the different types of pricing:

  • Community-rated: everyone who has the policy pays the same regardless of their age. The only reason the premiums may increase is because of inflation or increases in health costs.
  • Issue-age rated: you are charged based on your age when you first sign up for the policy. Presumably, younger enrollees are charged less than older ones. You will not be charged more as you get older.
  • Attained-age rated: you are charged every year based on your age, meaning that your premiums go up as you age.

Even with these considerations, the cost of Medicare Supplement plans can still vary between insurance providers and in different states. That’s why it’s important to find a Licensed Insurance Agent that will go over your specifics.

Shop around for Medicare Supplement plan discounts

Prior to enrolling in a Medicare Supplement plan, it is important to know exactly how plan costs will affect you financially, both now and in the future. Because your situation today could change over time, it helps to research all of your options when pricing out plans. Even if a plan may seem more expensive today, it could save you money in the long run, especially if you are paying for an issue-age rated plan.

While cost is one factor, it should not be the only thing guiding your decision. During Medicare’s annual enrollment period, shop around to find which providers are offering discounts. For instance, you may be able to save money if you have certain good habits or if you have two policies in one household.

If you’d like some help with research or comparison shopping, United Medicare Advisors can help. We work with over 20 carriers, allowing us to compare plans and prices side-by-side so you can find a competitively priced plan quickly and easily. We save our clients an average of $581 annually. Give us a call or complete this online form to receive your plan quotes today.

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