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Are you turning 65 soon? Don’t overlook these guidelines when signing up for Medigap.   

How Much Does Medicare Supplement Costs?

by: admin

You need to pay a monthly premium if you get a Medigap plan. That premium is on top of the premium that you pay for your Medicare Part B. However; the Medicare Supplement cost depends on various factors such as:

♦ The kind of Medigap plan you select

♦ The  Medigap insurance company where you will get your policy

♦ The period when you apply for Medicare Supplement

What affects Medicare Supplement Costs?

Before you buy a Medicare supplement plan, it is essential to understand first how different factors affects the prices of the policies.

1.     The kind of Medicare Supplement plan that you choose

The premium that you will have to pay will depend on the type of Medigap plan that you will get.

Medicare supplement insurance plans have up to ten standardized plans that offer different levels of coverage. 

Except for Massachusetts, Minnesota, and Wisconsin, which have their own set of types of Medigap plans, the types of Medicare supplements are labelled with alphabet letters.

All the Medigap plans offer the same primary benefits, but not all of them provide 100% coverage for the said benefits. The basic benefits include:

  • Medicare Part A coinsurance and coverage for hospital services
  • Medicare Part B coinsurance or copayment
  • Blood transfusions (first three pints)
  • Hospice care coinsurance or copayment

Aside from the basic benefits, other Medigap plans offer additional benefits. Additional benefits make the plan wider and comprehensive. Some Medigap policies offer up to 100% coverage of the Part A deductible and 100% of the Part B excess charge. There are also plans that provide foreign travel coverage. The more the benefits a Medigap plan offer, the higher the premium that you have to pay.

Compare Medigap plans

2.     The Medigap insurance company provider

The private insurance companies that sell Medicare Supplemental insurance plans set their premiums. Hence, a certain type of Medigap plan can be cheaper or expensive in one insurance provider compared to other Medigap providers. You have to remember that Medigap policies are standardized, meaning that Medigap plans provide the same set of benefits no matter what insurance company provider you get it or how much it costs. Company A and company B will offer Medigap Plan G with exact same benefits though they may offer the plan at different prices.

Also, before buying a Medigap policy in your chosen private insurance company, you have to consider the premiums that you will be paying in the future. Private insurance companies use different rating systems to set Medicare Supplement cost. It means the premiums that you will be paying might increase over time. The rate how it will increase can be described as follows:

a.      Community-Rated

Policyholders, regardless of their age, are each charged the same monthly premium rate. Rates in this system will not increase as a beneficiary age. However, inflation may allow monthly premiums to increase over time.

b.     Issue-Age-Rated

Monthly premiums will be based on the age a beneficiary first enrolls for a Medigap policy. As such, the younger an applicant is, the lower the premium may be. Medicare supplement rates in this system will not increase as a beneficiary age. However, inflation may allow monthly premiums to increase over time.

c.      Attained-Age-Rated

Monthly premiums will be based on the beneficiary’s current age. As such, the younger an applicant is, the lower the premium may be. Monthly premiums are subject to increases over time.

As you shop around for a Medigap, make sure that you will compare plans of the same type in different insurance companies. For example, Compare Medigap Plan G of one insurance company with Plan G of another company. Also, don’t forget to consider how companies are setting their prices (it affects how much you will pay today and in the future). Obtain Medigap quotes to check the cost of policies from different insurance companies.

3.     The period when you apply for Medicare Supplement

The best time to buy a Medicare supplement plan is during your open enrollment period. It is the six month period that begins the first month you are enrolled in Medicare part B, and you are already age 65 or older. This period comes only ONCE in your lifetime and the time that you can’t be rejected or be charged with higher premiums because of a pre-existing condition.

If you miss your open enrollment period, you’may have to undergo medical underwriting and it is up to the insurance company provider to decide if they want to give you a policy or not. The result of medical underwriting will have an effect on the possibility of you getting a Medigap plan,  be rejected or pay a higher premium for the coverage.

Next: Use the latest Medigap comparison chart


Next: Request for Medicare Supplement Quotes Now