Medicare Supplement (Medigap) Plan Costs

Medicare Supplement (Medigap) Plan Costs

 

A Medigap (Medicare Supplement) plan can help cover the medical and related out-of-pocket expenses that Original Medicare, Part A and Part B, doesn’t cover. For example, there’s a cost category called “Part B excess charges” that some Medigap plans cover. This is the amount that a medical provider is legally allowed to charge, in some situations, that’s higher than the Medicare-approved amount.

There are 10 different standardized Medigap available in most states. Each plan is designated by a letter (for example, Medigap Plan F), and benefits are standardized across each plan type. This means that coverage is the same for each plan letter no matter which insurance company you buy from. For example, if you buy a Medicare Supplement Plan F in Athens, GA, its benefits will be the same as a Medicare Supplement Plan F in Fargo, ND. Note that Medicare Supplement plans in Massachusetts, Minnesota, and Wisconsin are standardized differently.

It may be well worth taking the time to compare plans before enrolling in a Medigap plan. Since the benefits are exactly the same for plans of the same letter, the main difference is the cost.

Note: Medigap Plan A, Plan B, Plan C, and Plan D are different from Medicare Part A, Part B, Part C, and Part D, despite the similar-sounding names.

Learning the best time to enroll in a Medicare Supplement plan and how insurers price Medigap premiums can help make sure that you get accepted into a Medicare Supplement plan at a price that may work for your budget.

When to enroll in a Medigap plan

Enrolling when you’re first eligible can strongly affect the cost of your Medicare Supplement plan–or whether you’re even able to enroll. For most people, you’re first eligible during the Medigap Open Enrollment Period. This is the six-month period that starts when you’re 65 and covered by Medicare Part B. During this time, you have guaranteed-issue rights, meaning that insurers cannot use your health status to turn you down for a plan or charge you more. If you apply for a Medigap plan after this period, insurance companies can use medical underwriting, refuse to sell you a policy, or charge you a higher premium because of pre-existing conditions.

If you want to join a Medigap plan when you are most likely to be accepted into the plan and pay a lower premium than you might pay if you enrolled later, you may want to apply during your Medigap Open Enrollment Period.

How insurers price Medigap premiums

When comparing Medigap plans, you should pay attention to not just the current premium cost, but how the insurance company prices its premiums. Private insurers use enrollees’ ages differently to calculate Medigap premiums. The pricing method that the insurance company uses will affect how much you pay for your plan premium later on.

Companies that sell Medigap policies can set premium prices in any one of three ways.

No-age-rated or community-rated: Rates are not affected by age. Premiums can increase due to inflation.

Issue-age-rated: The rate is set at the age you are when purchasing the policy. The younger you are when you buy the policy, the lower your premiums will be. Your premiums will still increase over time because of inflation and other factors, but they cannot increase because of age.

Attained-age-rated: The initial premium cost is based on your age at the time you purchase the policy, but will increase as you get older. These policies may be expensive in the beginning, but can end up being more expensive over the long run. Premiums can increase because of inflation.

Saving on Medigap costs

To keep your Medigap premium down, you may want to purchase a policy as soon as you’re first eligible, during your Medigap Open Enrollment Period. Aside from that, it’s generally a good idea to  shop around and compare prices before getting a Medigap policy.

You can find and compare Medicare Supplement plans in your area by entering your zip code in the form on this page.

When choosing in a Medigap plan, you may want to think carefully about both your present and anticipated future health needs. If you choose to buy a less expensive plan during your Medigap Open Enrollment Period, you may not be able to change to a better plan later on. You may be in good health when you purchase your plan, but your health may decline over time. You may have trouble switching Medigap plans later if your health declines. However, there are a few situations where you can switch Medigap plans with guaranteed issue rights.

Do you have questions about Medigap plans or other Medicare coverage options? We’re here to help. You can talk to one of eHealth’s licensed insurance agents by calling the phone number below.

To learn about Medicare plans you may be eligible for, you can:

  • Contact the Medicare plan directly.
  • Call 1-800-MEDICARE (1-800-633-4227), TTY users 1-877-486-2048; 24 hours a day, 7 days a week.
  • Contact a licensed insurance agency such as Medicare Consumer Guide’s parent company, eHealth.
    • Call eHealth's licensed insurance agents at 888-391-2659, TTY users 711. We are available Mon - Fri, 8am - 8pm ET. You may receive a messaging service on weekends and holidays from February 15 through September 30. Please leave a message and your call will be returned the next business day.
    • Or enter your zip code where requested on this page to see quote.