If you have Original Medicare, you may be interested in purchasing a Medicare Supplement insurance (sometimes known as Medigap) policy to help with the costs Original Medicare may not cover.
A Medicare Supplement insurance policy is a type of supplemental insurance policy that is sold by private insurance companies.1 It is designed to cover some of the out-of-pocket expenses, like copayments, coinsurance, and deductibles that Original Medicare does not cover.1 In order to be eligible for a Medical Supplement insurance policy, you must first be enrolled in Medicare Part A and Medicare Part B.1
There are many different insurance companies that sell Medicare Supplement insurance policies, and there are several different plans to choose from.
How much can you expect to pay for a Medicare Supplement insurance policy?
Cost Determined by Insurance Company
Insurance companies determine how they price Medicare Supplement insurance policies, and prices may vary greatly.
According to Medicare.gov, Medicare Supplement insurance policies are priced – or rated – in the following ways: community-rated; issue-age-rated; and attained-age-rated.2
Community-rated policies are generally priced the same for everyone who has the policy, even customers of different ages. (Note that in New York, a community rating methodology must be applied to all policies and certificates of Medicare Supplement insurance.) Issue-age-rated policies are priced based on your age when you buy the policy. Attained-age-rated premiums are based on your current age and go up as you age.
Prices for Medicare Supplement insurance policies also vary by state. Insurance companies must submit premium rates to state insurance departments who must approve the premiums before they are implemented.
It’s important to note that Medicare Supplement insurance benefits are standardized.3 For example, Plan G generally has the same benefits regardless of which company sells it; however, the price for Plan G might vary partly because of how the policy is rated.
Medicare Supplement insurance policy premiums vary depending on how they are rated and on how much coverage you need (reflected by the plan selected). Plans with fewer benefits generally cost less than plans with more benefits.
Since each plan has a different benefit package (some fewer, with a lower cost; and some with more benefits at a higher cost), and since they are rated differently, it is difficult to determine an average, or typical cost of a Medicare Supplement insurance policy.
According to Healthline, the premium range for different plans can span from as low as about $40/month to as high as about $400/month.4 Again, a variety of factors determine pricing, including the insurance company’s rates, where you live, and which plan you choose.
What’s the Right Option for You?
Once you determine which Medicare Supplement insurance plan is right for you, it’s a good idea to shop around since premium prices vary by company.
If you want to learn more about Medicare Supplement insurance policy premiums or to find the best policy for you, contact a licensed insurance agent.
- Medicare.gov, What’s Medicare Supplement Insurance, 2020
- Medicare.gov, Costs of Medigap Policies, 2020
- Medicare.gov, How to compare Medigap policies, 2020
- Healthline, Spanning the Gap: Learning More About Medigap Plan Costs in 2020, 2021
Categories: Medicare Supplement, Insurance