How Much Is Medigap Insurance?
There are 10 different standardized Medigap plans. That is, each plan is set up the same regardless of which company is providing it—unless you live in Wisconsin, Massachusetts, or Minnesota, where Medigap plans are standardized differently. But while a specific plan is almost always the same, the cost of a single plan is not—in fact, it can vary widely from one provider to the next. The average cost for Medigap plans ranges from $140 to $196 per month.1
Medigap insurance, otherwise known as Medicare Supplement insurance, is a type of health insurance intended to cover costs and services that Original Medicare doesn’t. It is not a standalone health insurance like Medicare Advantage—instead, Medigap works with Medicare Part A and Part B to provide a more complete health insurance solution.
In this FAQ, we’ll discuss how much Medigap insurance costs and why.
How much are Medigap premiums?
The 10 different Medigap plans are named with letters: A, B, C, D, F, G, K, L, M, and N. Here’s a breakdown of the average monthly cost for some of the more popular Medigap plans in the nation:
|Plan Letter||National Average|
Plan F provides the most comprehensive coverage and is by far the most popular. It is also one of the most expensive plans because of how much it covers.
Although the plans remain the same regardless of provider, costs do not. Insurance companies are free to charge what they want for Medigap policies. Pricing can be different depending on location, with some states’ policies being much more expensive than others. This difference in price is primarily determined by the cost of living in various states.
Insurance companies also use a couple of other factors to determine how much Medigap premiums will be for beneficiaries.
How do insurance companies determine the prices of their Medigap plans?
There are three different ways Medigap providers price their plans.
- Community-rated. All beneficiaries pay the same monthly premiums regardless of age. Premiums can still go up, but this will be a result of inflation or other factors rather than the age of the individual.
- Issue age–rated. With this method, premiums are based on your age at the time you first enrolled in the policy. They do not increase as you get older. As a result, people who enroll at a younger age will pay lower premiums.
- Attained age–rated. With this method of determining cost, your premiums are based on your current age, and they will increase as you get older.
Do insurance companies offer discounts on Medigap?
Yes. Some providers offer discounts for non-smokers, females, or those who are married. Companies may not advertise these discounts, so make sure to ask any provider you’re considering whether they offer them.
What is Medigap SELECT?
Medigap SELECT is a type of Medigap policy offered by some insurance providers. Unlike typical Medigap plans, a Medigap SELECT plan requires you to use specific doctors and hospitals, much like a traditional health insurance plan that has a “network.” The advantage of a Medicare SELECT plan is that costs are typically lower than standard Medigap policies. The tradeoff, of course, is that if you don’t use an in-network health care provider, you’ll have to pay more than you would’ve if you kept with a typical Medigap plan.
It’s important to note that these increased costs only apply to the portion of service that Original Medicare doesn’t cover. Any health care costs that are covered by Original Medicare will still be paid.
What is high-deductible Medigap Plan F?
High-deductible Medigap is a Plan F option that offers a lower monthly premium but requires you to pay a certain amount out of pocket before the Medigap coverage kicks in. The deductible amount changes from year to year. In 2017, it is $2,200.2 There is also a deductible of $250 for foreign travel emergencies.3
High-deductible Plan F can be a good choice if you don’t typically use a lot of Medigap-covered health care services. The lower premiums can save you money in the long run. If you do end up using the policy often, though, your out-of-pocket costs can be higher.
What is medical underwriting and how can that affect my premium?
Medical underwriting is when health insurance companies evaluate applicants based on medical and health information. This evaluation is then used to determine whether the applicant should be offered coverage, and if so, how much they should pay for it. Information used may include pre-existing health conditions, whether the applicant smokes or not, and the age of the applicant.
Medical underwriting is primarily a concern for individuals who have chronic health conditions and require frequent medical care. These conditions can make it difficult for them to get insurance coverage, including Medigap. However, during the Medigap Open Enrollment Period, insurance companies are not allowed to use medical underwriting to determine your cost or eligibility for insurance. The Medigap Open Enrollment Period is the first six months after you turn 65 and buy Medicare Part B insurance.
We hope this article helps you make the right health insurance choices for you. If you have any more questions about switching, joining, or dropping plans, feel free to reach out to our licensed insurance agents today at 855-802-1206.