Understand Your Medigap Costs

Medicare Supplement Insurance (Medigap) plans help pay for certain Medicare out-of-pocket costs, like deductibles, coinsurance and copayments. But Medigap plans also come with costs of their own – namely, monthly premiums that are paid in addition to your Part B premium. 

Medigap premium amounts can vary depending on the amount of coverage you want and the market where you live.

For example:

• In 2024, the average premium for Medigap Plan F – which covers more benefit areas than any of the other standardized Medigap plans – is $202 per month.¹
  
  
  
• The average premium for Plan G – which covers the same costs as Plan F except for the Medicare Part B deductible – is $135 per month in the same year.

Medical Underwriting

Medical underwriting could affect how much you pay for your Medigap plan, but only if you enroll in Medigap outside of your Medigap Open Enrollment Period (OEP).

Your Medigap OEP is the six-month period that begins the month you are both 65 years or older and enrolled in Medicare Part B.

If you enroll in Medigap during your Medigap OEP, you are guaranteed the best rate for a Medigap policy in your area, and insurers cannot use medical underwriting to determine your premium amounts or deny you coverage.

If you enroll outside of your Medigap OEP, insurers can use the following information to determine your premium amounts:

• Age
  When you apply for coverage, insurers will want to know your birthday. They ask because your age will probably affect how often you file claims.
  
  The average Medigap cost to insure a 65-year-old is significantly lower than the average cost for a 85-year-old, and that fact is reflected in your premiums.
  
  How much of an effect age really has on your policy will also be determined by your insurer’s pricing system (more details below).
  
  
• Gender
  Another piece of personal information required is your gender. Your gender can be factored into the premium cost, but this information weighs less today than it did in the past.
  
  Generally, women cost less to insure than men.
  
  
• Tobacco use
  Tobacco use can lead to serious health risks including cancer, heart disease, and strokes, which ultimately cost the insurance company more money.
  
  To balance this cost, insurance companies usually charge higher premiums for those who smoke.

Although Medicare Supplement Insurance plans may be priced differently in different parts of the country and from one insurer to the next, the federal government regulates the basic benefits offered to each person with a certain plan.

For example, if you buy Medigap Plan F in Florida, you will receive the exact same basic benefits as a person buying Plan F in California. We have a guide that will show you the average medicare supplement cost you might be quoted.

The following chart shows the benefits of all 10 standardized Medigap plans.

Medigap Plans Comparison Chart

Medicare Supplement Insurance Plan Pricing Structures

There are three main ways that insurance companies price (or “rate”) Medigap policies. Medicare Supplement Insurance policies can either be:

• Community-rated
• Issue-age rated
• Attained-age rated

Additionally, Medigap premiums may go up over time due to inflation or other factors, regardless of which rating system was used to price your policy.

Community-Rated Medigap Plans

In community-rated policies (sometimes called no-age-rated policies), insurance companies do not take age into account, and they charge the same amount to everyone with a particular Medigap policy.

For this pricing structure, a 65-year-old applicant would be quoted the same rate as a 75-year-old. Younger and healthier enrollees would likely face higher premiums to balance out the cost of insuring unhealthy and older enrollees. 

If you have one of these policies, premiums will not go up over time based on age, but they can increase based on inflation.

Issue-Age Rated Medigap Plans

The pricing for issue-age-rated policies is based on the age you were when you acquired (or when you were “issued”) the policy.

The premium rate is fixed and does not change as you age. For these policies, the initial premium cost might be more expensive than an attained-age policy, but it might cost less in the long term.

This pricing method is less commonly used by insurers.

Attained-Age Rated Medigap Plans

Attained-age-rated policies go up as you get older because they are based on how many years you have “attained.”

In these types of Medigap policies, premiums are lowest for the youngest buyers, but they will eventually rise as you age. This is the most common pricing structure for Medigap insurance companies.

Find the Right Medigap Plan for You

Call to speak with a licensed insurance agent who can can help you compare the costs of Medicare Supplement Insurance plans that are available in your area.

¹ Internal sales data provided by TZ Insurance Solutions LLC, 2023. This data is based on the Medicare Supplement Insurance policies TZ Insurance Solutions LLC has sold. It is not a comprehensive national average of all available Medicare Supplement Insurance plan premiums.