2 things to know about comparing Medigap quotes:
- Prices for the same standardized Medigap plan will be different from different insurers.
- You should review the following 5 factors when comparing Medigap quotes: benefits, plan type, insurance company, age-related pricing structure, and price.
Comparing Medicare Supplement insurance (Medigap) health insurance rates is important to ensure that you get the benefits you need at the best price available.
Even though Medigap plans are standardized, prices vary from insurer to insurer. You need to first decide which benefits you want and which particular plan options provide those benefits. After receiving several quotes from different insurers, you can compare plans based on price and eventually buy a policy. Continue reading for a step-by-step guide to comparing Medigap plans, and request a free quote today.
Choose which Medigap benefits you want
The first step in comparing Medigap plans is deciding which costs you need your Medigap policy to cover. Medicare Supplement insurance plan options include up to 9 basic benefits that cover out-of-pocket costs not covered by Original Medicare. All plans provide the same 4 basic benefits, and there are 5 additional benefits included in only some plan options. You need to decide which optional benefits you want so that you can choose the best plan for you.
Learn more about the basic benefits that Medicare Supplement insurance plans cover.
Medicare Supplement quotes by plan
The second step of the Medigap comparison process is deciding which Medigap plan option is best for you. After deciding which benefits you want, you should match up the required benefits with the plan option that offers all of them.
There are 10 different standardized Medigap plan options currently available in most states. (Massachusetts, Minnesota, and Wisconsin have different options.) Each type of Medicare Supplement Insurance plan has different benefits, ranging from the lower coverage option such as Plan A to the higher coverage options such as Plan F and Plan G.
You can use the 2020 Medigap plan chart below to compare the benefits that are offered by each type of plan.
Scroll to the right to continue reading the chart
Medicare Supplement Benefits
Part A coinsurance and hospital coverage
Part B coinsurance or copayment
Part A hospice care coinsurance or copayment
First 3 pints of blood
Skilled nursing facility coinsurance
Part A deductible
Part B deductible
Part B excess charges
Foreign travel emergency
* Plan F and Plan C are not available to Medicare beneficiaries who became eligible for Medicare on or after January 1, 2020. If you became eligible for Medicare before 2020, you may still be able to enroll in Plan F or Plan C as long as they are available in your area.+ Read more
1 Plans F and G offer high-deductible plans that each have an annual deductible of $2,370 in 2021. Once the annual deductible is met, the plan pays 100% of covered services for the rest of the year. The high-deductible Plan F is not available to new beneficiaries who became eligible for Medicare on or after January 1, 2020.
2 Plan K has an out-of-pocket yearly limit of $6,220 in 2021. 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 $3,110 in 2021. 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 $50 copayment for emergency room visits that don’t result in an inpatient admission.- Read less
You may consider the popularity of a Medigap plan as you compare quotes. More popular plans may sometimes feature lower premiums than less popular types of plans with a similar level of benefits.
- In 2018, 53% of Medicare Supplement beneficiaries were enrolled in Plan F.
- The next most popular Medigap plan is Plan G, with 17% of all Medigap enrollees having that plan.
- The third most popular plan is Plan N, with 10% of all Medigap enrollment.1
Since Plan F is no longer offered to new Medicare beneficiaries who became eligible for Medicare after January 1, 2020, Plan G and Plan N will likely become the most popular Medigap plans in coming years.
High coverage plans
Some plans that offer more benefits can sometimes cost more than plans with fewer benefits. This may not always be the case, however, since some plans with more benefits may have a higher number of enrollees, which can affect costs.
In 2020, Plan G and Plan N offer the most benefits of any Medigap plans available to new Medicare beneficiaries.
You may decide that a plan with fewer benefits is the right choice for you. Some beneficiaries enjoy plans with more benefits because it limits the potential out-of-pocket Medicare costs they may face in a year.
Plan G offers all of the possible Medigap plan benefits except for the Part B deductible (which is $198 for the year in 2020).
Plan N offers all possible Medigap benefits except for the Part B deductible and Part B excess charges.
If you visit a doctor who doesn't accept Medicare assignment, this means they reserve the right to charge up to 15% more than the amount Medicare typically pays for the covered service. These are called Part B excess charges, and they can be avoided by asking your doctor if they accept Medicare assignment before receiving any services from them.
Once you compare Medigap quotes for the types of plans that are available where you live, you will want to decide which plan offers the best mix of coverage for your needs and the right fit for your budget.
In recent years, Plan G, Plan N and Plan B have been among the types of Medigap plans with the lowest average monthly premiums.
High-deductible Plan G and High-deductible Plan F are likely to have the lowest premiums of plans that may be available where you live. If you find that having a high deductible in exchange for much lower monthly premiums is a good fit for your coverage needs, you may want to consider one of these high-deductible plan options.
What factors impact your Medicare Supplement quote?
After receiving several quotes, the final factor to review is price. Price is typically the only difference between one insurance company’s Plan A and another insurance company’s Plan A. It's important to compare prices for the same standardized plan option to find out which insurance company is truly cheaper.
Keep in mind the premiums may increase in future years depending on the policy's age-related pricing structure. Before you choose a policy, you should know exactly how pricing will change as you age. There are three age-related pricing structures used by Medigap insurers.
Attained-age-rated Medigap plans set their premiums based on your current age. As you age, your Medigap plan premiums will gradually increase each year.
With community-rated Medigap plans, every member of the plan pays the same rate, regardless of age.
For example, an 82-year-old who enrolls in a community-rated Plan G will pay the same Medigap premiums as a 68-year-old beneficiary who has the same Plan G in the same market.
With issue-age-rated Medigap plans, premiums are based on your age at the time you enrolled in the plan.
You will typically pay less for an issue-age-rated plan if you enroll in the plan when you're younger. Your premiums also won't increase based on your age.
Medical underwriting and guaranteed issue rights
Insurers can use your personal factors in a process called “underwriting” to predict how much you'll cost them to insure. If you apply during your Medigap Open Enrollment Period, however (or during another time when you have a guaranteed issue right), insurers can't use underwriting, and your personal factors won't affect your final price.
When insurers are allowed to use underwriting, they can look at, among other things:
- Tobacco use
1. 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.
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.
The final personal factor is an applicant's ZIP code. A ZIP code is required on a Medigap policy application because health care costs vary greatly based on where you live. This is mostly because different areas have different average health care costs.
However, location doesn't usually affect prices too much. The Indiana University study found that for 90% of Medigap policies, the insurer had up to only three different prices for the same plan throughout the state.
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 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.
Purchasing a Medigap Policy
After deciding on a plan type and insurance company, it is time to buy a Medigap policy.
Call today to speak with a licensed insurance agent who can help you compare Medigap plans in your area so that you can find a plan that fits your coverage needs and your budget.
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1 AHIP. (June 2020). State of Medigap: Trends in Enrollment and Demographics. Retrieved from https://www.ahip.org/wp-content/uploads/AHIP_State_of_Medigap-2020.pdf.