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Medicare Supplement Insurance Costs

There are several variables that may affect the cost of a Medicare Supplement Insurance plan. Below, we examine some of the most common pricing factors to help you find a quality Medigap policy at a fair price.

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4 Things That Can Affect the Price of Your Medigap Policy

1. Medical underwriting

If you enroll in a Medigap plan outside of your open enrollment period, you may be subject to medical underwriting by the insurance company. This means that the cost of your Medicare Supplement Insurance plan may be based on your current health status and medical history.

Underwriting is not permitted for Medicare beneficiaries who sign up during the open enrollment period or those who have a guaranteed issue right. Your six-month Medigap open enrollment period begins as soon as you are at least age 65 and are receiving Medicare Part B benefits. There are some exceptions for people younger than 65 who have qualifying conditions or disabilities.

2. Discounts

Insurance companies that sell Medicare Supplement Insurance plans may offer discounts for non-smokers, women, married couples, patients who pay their premiums electronically and more. Any potential discounts are not standardized and will vary based on the insurance provider.

3. Location

Medigap plans sold in one particular market may be quite different from the same plans sold in another part of the country. For example, Medigap Plan F could be found in San Jose in 2016 for between $135 and $168 per month. But in New York City, the cost of the same Medicare Supplement Insurance plan offering the same basic benefits could range from $218 to $444. 

4. Plan type

There are 10 standardized Medigap plan types available in most states (Minnesota, Massachusetts and Wisconsin have different plan options), and each type of plan offers a slightly different combination of basic benefits in nine designated coverage areas. Because the amount of coverage differs from one plan to the next, so too will the cost.

Use the chart below to compare the basic benefits of each type of Medicare Supplement Insurance plan.

Medicare Supplement Benefits A B C D F1 G K2 L3 M N4
Part A co-insurance and hospital costs
Part B co-insurance or co-payment 50% 75%
First 3 pints of blood 50% 75%
Part A hospice care co-insurance or co-payment 50% 75%
Co-insurance for skilled nursing facility     50% 75%
Medicare Part A deductible   50% 75% 50%
MedicarePart B deductible                
Medicare Part B excess charges                
Foreign travel emergency     80% 80% 80% 80%     80% 80%
1. Plan F offers a high-deductible plan. This plan requires you to pay a $2,300 deductible in 2019 before it covers anything.
2. Plan K has an out-of-pocket yearly limit of $5,560 in 2019. After you pay the out-of-pocket yearly limit and yearly Part B deductible, it pays 100% of covered services for the rest of the calendar year.
3. Plan L has an out-of-pocket yearly limit of $2,780 in 2019. After you pay the out-of-pocket yearly limit and yearly Part B deductible, it pays 100% of covered services
for the rest of the calendar year.
4. Plan N pays 100% of the Part B coinsurance, except for a copayment of up to $20 for some office visits and up to a $50 copayment for emergency room visits that don’t result in an inpatient admission.

Medicare Supplement Insurance Plan Cost Structures

Another variable that may affect the cost of a Medicare Supplement Insurance plan is your age. There are three main ways in which age may be factored into the cost of a Medigap plan.

  • Community-rated
    Under community-rated Medigap plan pricing, each Medicare beneficiary is charged the same rate, regardless of their age. The cost of the plan will not increase over time as a result of the increasing age of the insured, but costs could increase as a result of inflation.

  • Issue-age-rated
    This type of Medicare Supplement Insurance plan cost structure is based on your age at the time of application. Typically, the younger you are when you purchase the Medigap plan, the less you will have to pay for the plan. Again, these plan costs will not increase due to your age but may increase due to inflation.
  • Attained-age-rated
    Attained-age rated Medigap plan costs are similar to that of an issue-age-rated plan, but the cost will increase as you age. Younger enrollees can generally expect to pay less for the plan initially but will see the costs increase over time due to their age.  

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