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How Much Does a Medicare Supplemental Insurance Plan Cost?

by: Leandro Mueller

If you are new to Medicare, you might want to consider taking a closer look at Medicare Supplemental insurance plans. Because Original Medicare only covers 80% of your health care bill, a Medicare Supplement may be very helpful in taking care of the remaining expenses.

Medicare Supplement insurance also called Medigap insurance, is a kind of insurance that works together with your Medicare. It is sold by private insurance companies and will serve as a way to minimize the out-of-pocket costs from Medicare Part A and B.

Just like other health insurance, you need to pay a monthly premium if you get a Medigap plan. That premium is on top of what you pay for your Medicare Part B premium.
 

How much does Medicare Supplemental Insurance cost?

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

Let’s tackle the factors that will determine your Medicare Supplement plan premium.
 

1.     The kind of Medicare Supplement plan that you choose

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

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

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.
 

2.     The Medigap insurance company provider

Medigap plans are sold by private insurance companies. Each of them has different ratings on how they set their monthly premiums.

Depending on the pricing structure of the company, you may have to consider your premiums not just in the present day but also the future.

You have to remember that Medigap policies are standardized, meaning that same letter Medigap plans provide the same set of benefits no matter which insurance company 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.

Premiums may increase over time due to different ratings used by insurance providers. 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. 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.

During this period, 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. The result of medical underwriting will have an effect on the possibility of getting a Medigap plan,  be rejected or pay a higher premium for the coverage.
 

How much is the average cost of Medicare Supplemental Insurance in different states?

Medicare supplement plans may be offered at different prices or monthly premiums between insurance companies.

the table below shows the average monthly premium of each Medigap:

 

 Medigap Plan

Average Monthly Premium

A$360
B$449
C$347
D$299
F$326
F (HIGH DEDUCTIBLE)$68
G$290
K$129
L$236
M$361
N$210
Source: healthmarkets.com


 

Currently, Medicare supplement plan F is still the most popular type of plan. The national average cost for Medigap plan F is $1,712 annually or $143 a month.

The table below shows the average cost of Medigap in different states in the US:

 

 

StateAverage Annual Medigap Plan CostAverage Monthly Medigap Plan Cost
Alabama$1,627$135.58
Alaska$1,851$154.25
Arizona$1,714$142.83
Arkansas$1,598$133.16
California$1,817$151.42
Colorado$1,623$135.25
Connecticut$1,861$155.08
Delaware$1,730$144.16
Florida$1,831$152.58
Georgia$1,579$131.58
Idaho$1,519$126.58
Illinois$1,788$149
Indiana$1,668$139
Iowa$1,468$122.33
Kansas$1,608$134
Kentucky$1,670$139.16
Louisiana$1,897$158.08
Maine$1,507$125.58
Maryland$1,865$155.42
Massachusetts$1,947$162.25
Michigan$1,736$144.66
Minnesota$1,584$132
Mississippi$1,790$149.16
Missouri$1,565$130.42
Montana$1,526$127.16
Nebraska$1,651$137.58
Nevada$1,904$158.66
New Hampshire$1,704$142
New Jersey$1,892$157.66
New Mexico$1,464$122
New York$1,793$149.42
North Carolina$1,574$131.16
North Dakota$1,564$130.33
Ohio$1,647$137.25
Oklahoma$1,712$142.66
Oregon$1,468$122.33
Pennsylvania$1,687$140.58
Rhode Island$1,812$151
South Carolina$1,625$135.42
South Dakota$1,611$134.25
Tennessee$1,617$134.75
Texas$1,860$155
Utah$1,596$133
Vermont$1,586$132.16
Virginia$1,558$129.83
Washington$1,589$132.41
Washington DC$1,677$139.75
West Virginia$1,596$133
Wisconsin$1,495$124.58
Wyoming$1,747$145.58
Source: businessinsider.com


 

If you are looking for a Medicare Supplement plan…

It is important to consider the premium that you are going to pay in the present and in the future. You should also consider other factors such as the coverage and benefits when choosing a plan. The cheapest type of Medigap may not be useful enough to cover your health care needs, and the most expensive of a certain letter may not be the most practical.

We’d love to help you with your questions about Medicare supplement costs and other Medigap inquiries.

Feel free to send us a Medigap quote request to learn more about the premiums in your area and download other learning materials that come with it. A licensed insurance agent may contact you when you request a quote, so you can discuss your Medigap options more.

 

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Related Links:

What is Medigap?

When to enroll?

How to compare Medigap plans (with comparison chart)?

How to buy a Medigap Plan?