Medigap Insurance Cost

Medicare supplement plans also referred to as Medigap, were established to help the insured pay for medical services not covered in their general plan. On average, you are required to pay $150 every month or an equivalent of $1800 annually for a Medigap plan.

However, these prices vary from one insurance firm to another, with each company setting its price range based on multiple factors. Some of the factors influencing the price of a Medigap plan include the age and location of the insured.

A Medigap plan plays a vital role in the insurance sector, helping patients cover their out-of-pocket costs, including co-insurance, deductibles, and co-payments.

What Does a Medigap Plan Cover?

Private insurance firms offer Medigap plans to people under Medicare since they pay for services and file a claim with Medicare for reimbursement. This move causes a variation in the offers offered to each insurer, as well as the overall price of the plan.

It’s worth noting that the amount of premium paid by an insured is directly related to the offers; the more comprehensive, the higher the premiums paid. A Medigap plan offers full or partial coverage for;

  • Hospital costs and part A coinsurance for 365 days after your Medicare benefits expire
  • Coinsurance or copayment for hospice care
  • Copayment or coinsurance for Medicare Part B
  • Skilled nursing facility care
  • Limited foreign travel and emergency care.

How Do You Determine the Price of a Medigap Plan?

As mentioned, the amount of premiums paid by an insured varies depending on the nature of the plan. Each insurance company uses different parameters to set the minimum and maximum premiums paid. These prices directly influence your current and future Medigap coverage.

One of the main parameters used to determine the amount of premiums paid is the age of the insured. However, some companies don’t use age as a determining factor; the amount paid will increase every year, or they will develop a customized rate based on when you bought the policy and your current age.

Here are a few ways to price a Medigap plan:

1. Issue-Age-Rated

This approach is also referred to as ‘Entry-Age-Rated’ and is focused on how old you were when you first bought the plan. Based on Issue-Age-Rated, the monthly premiums paid are lower for the younger generation and don’t increase as you get older.

For example, if you buy a policy aged 60 years, paying $150 every month, you will be paying the same as you grow older. The price is locked in at the age you purchased the plan and is subject to changes with the growing inflation rate.

2. Community-Rated

This approach is also called No-Age-Related and doesn’t use age as a determining factor when pricing a Medigap plan. With this approach, your monthly premiums are likely to change based on the inflation rate. Companies using the Community-Rated approach charge the same amount regardless of age.

3. Attained-Age-Rated

This approach has a direct relation to your current age. Your monthly premiums increase every year as you grow old. The attained-Age-Rated plan is arguably the cheapest option during the first years, especially after qualifying for your Medicare benefits. However, over time they turn out to be expensive and can become a nightmare.

What is the Average Cost of Medigap Plans?

The benefits of a Medigap plan are standardized, meaning every plan has the same benefits regardless of the provider. However, the premiums vary based on the beneficiary, with the main determinants being location, age, and gender. Here is an average price range for Medigap Plans based on the type of plan you choose;

Average Cost for Medicare Supplement Plan F

The Medigap Plan F offers a comprehensive package, making it popular among most people who qualify. It’s also pricier compared to other options, with premiums ranging between $251and $524. You should also remember that in most states, women pay less premiums compared to men since they live a little longer. However, this doesn’t apply in every state since, in some states, everyone pays the same amount regardless of age and gender.

Average Cost of High Deductible Medicare Supplement Plan F

A high Medigap plan offers the same benefits as a regular Medigap plan; however, one needs to have reached a high deductible to qualify. Despite taking a long to achieve the deductible, the premiums paid are relatively low.

With this plan, females pay an average monthly premium of $56 while males pay an average of $84. These prices are likely to change based on the location and age of the insured.

Average cost of Medigap Plan G

Medicare Supplement Plan G is the second most popular health plan in the United States. Newly eligible beneficiaries often enroll in this plan due to its flexible and comprehensive nature, providing an affordable alternative to Plan F.

This plan offers the same benefits as Plan F, with the exception of the $233 Medicare Part B deductible. Depending on your location, you are likely to pay between $238 and $475.

Average Cost of Medigap Plan N

Medicare supplement plan N is the cheapest option compared to G and F. With this plan, you are likely to should some of the costs, including copayments. Nevertheless, it still offers ample coverage against most of the out-of-pocket medical expenses.

People under Medigap plan N are able to enjoy all the benefits offers by plan G with the exception of excess charges. This feature may turn out to be positive for people in states that prohibit excess charges. With this plan, you are likely to pay between $211 and $323, depending on your gender and location.

There are several other Medicare Supplement plans, including C, D, and K. Each of these plans offers benefits based on your type of coverage and charge different premiums. Under these plans, one can pay as low as $76 every month and as much as $475 depending on location, age, and gender.


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