How Much Does a Medicare Supplement Plan Cost?

There’s More Out There Than Medicare Advantage

Sometimes, a Medicare Advantage plan just isn’t the right fit. That’s where Medicare Supplement Plans, also known as Medigap, come into play. These plans can ‘fill the gaps’ in Original Medicare coverage, helping you cover deductibles, co-insurance, and other cost-sharing elements. However, when it comes to figuring out how much a Medicare Supplement Plan costs, things can get a little confusing.

Standardized Benefits, Varied Prices

Medigap plans are sorted by letter, which indicates the specific benefits they provide. Unlike Medicare Advantage, Medicare gap insurance plans of the same type offer identical benefits. However, pricing for these plans is not standardized. There’s a general range of costs you can expect, but nothing standardized. This is because supplemental Medicare insurance isn’t subject to the same consumer protection laws as most health insurance plans… at least not most of the time.

There are two periods where insurers are required by law to sell you a Medigap plan at the best available price:

• Medigap Open Enrollment: A period that begins the month you turn 65, provided you’re enrolled in Medicare Part B. This period lasts six months.
• Guaranteed Issue Right: Provided you are 65 or older, you have a 63-day enrollment period following the loss of qualified coverage. 

Even during these special periods, there are still variations in price based on things like geographic location, gender, and marital status, whether you smoke, and whether you pay monthly or annually. You can expect to find one of three types of pricing schemes.

• Community Rated: These plans charge a set price to all members, regardless of age, though other discounts may apply. 

• Issue Age Rated: Your plan’s premium is based on the age you were when you first enrolled, with lower premiums available for early enrollment.
• Attained Age Rated: These plans may appear to be the least expensive option at first, but increase in price based on your current age.

All of these plan types can change prices based on inflation, so choosing a community or issue-age-rated plan is preferable to an attained-age plan. 

What If I Miss My Guaranteed Issue Period?

Unlike Medicare Advantage plans, you can enroll in a Medigap plan at any time, in theory. In practice, things are a bit harder. Not all providers sell Medigap plans outside of guaranteed issue periods, so depending on your location, a plan may not be available. Even if one is available, expect some additional hurdles.

Outside of a guaranteed issue period, insurers are free to engage in practices like medical underwriting. This refers to the practice of reviewing an enrollee’s medical history and assessing their likelihood of needing a given medical service. Since the advent of the Affordable Care Act, underwriting is mostly limited to property insurance (such as auto and homeowners insurance). However, outside of these protected periods, insurers are free to deny coverage based on your medical history.

Even if your coverage is not denied, you may face a waiting period before any pre-existing conditions are covered and may have to pay a higher monthly premium. 

How Can I Save on Medigap Plans?

If you’re looking to save money on your Medigap premium, you’ve got a few options.

High Deductible Plans: A limited number of Medigap plans offer a high deductible option. Currently, only Plans F and G offer a high deductible option, and only Plan G is available to newly eligible enrollees. As the name implies, the premium is lowered in exchange for a higher deductible (roughly $2700 as of 2023). For Plan G, this is in addition to your Part B deductible. However, your Part A deductible will be covered by your plan. Generally speaking, a high deductible plan isn’t worth it if you’re planning on making heavy use of your insurance.

Medicare SELECT: A Medicare SELECT plan limits you to a specific provider network, similar to an HMO, in exchange for lower premiums. You are allowed to go out of network for emergencies. These are something of an artifact, as they defeat one of the main appeals of a Medigap plan vs Medicare Advantage: the ability to see any provider. If you’re willing to limit yourself to a network, it’s worth looking into Medicare Advantage instead, as these plans often have lower premiums. Still, for specific benefits like travel coverage, this can be a useful option.

Plan-Specific Discounts: Some plans offer discounts for things like paying upfront, enrolling in electronic payments, or taking part in certain health and fitness programs. 

If you need assistance exploring Medigap plans, our licensed insurance agents can help. Call us today at (800) 950-0608 to learn how to make the most of your Medicare plan.