Medigap Plans start around $50 a month for a High-Deductible Plan F, while a normal Plan F can start around $120 for a 65-year-old. If you smoke or have health complications, your rate may be higher. If you apply with a spouse, you may get a household discount that can give you even greater savings. Paying annually as opposed to monthly will also give you a slight savings boost. Below is some average plan pricing and explanations as to why supplements are priced this way.
How are Medigap premiums determined?
All Medigap plans are standardized by federal law, so a Plan F from one company will contain the exact same benefits as a Plan F from another company – the only difference is the price you pay for that plan. If you’re driving down the street and you see gas on the left for $2.25 a gallon and gas on the right is $1.25 – which one will you pick? Of course, the gas station on the right, right?
Now, keep in mind that the company with the lowest rate may not necessarily be the best deal; you also have to consider rate stability, which factors in how long the company’s been in business and how stable their rates have been. Is the Medigap company giving low “sucker” rates to lure you in, only to jack them up later after you enroll in the plan?
A good insurance broker will be able to tell you how long a company has been in business in your state and whether they’ve had large rate increases over that time. Armed with that information, you can choose a competitive insurance company that’s more likely to keep rates stable and low.
As with any Medigap company, regardless of whether they determine premiums by area, by age, by gender etc., by law they can only raise your rates if they raise rates for a whole class of people – so they can never cancel your coverage or single you out for rate increases.
How much does Medigap Plan F cost?
Since Medigap Plan F is the most popular plan and covers the most potential out-of-pocket costs, it will be more expensive than other supplements. Usually a Plan F will cost more than a Plan G, even if you factor in the annual Part B deductible of $185 (in 2019) that a Plan G makes you pay. A Plan F can start as low as $120 a month for a 65-year-old and cost more than $300 a month when you get to be 90 years old.
Another component to weigh when comparing Medicare Supplement Plan costs is the potential rate increases you could experience on the plan. Since Plan F usually experiences more claims and covers more out-of-pocket costs, it has higher rate increases. And since the Part B deductible keeps pace with inflation, increasing slightly every year, then it makes sense that plans covering the Part B deductible, such as Plan F and Plan C, will also go up in lock-step (some take a couple of years or more to catch up).
How much does Medigap Plan G cost?
Medigap Plan G costs less than Plan F but still more than other supplements, because it covers everything except the small annual Part B deductible of $185 (in 2019). To put that in perspective, the average deductible for under 65 health insurance is over $4,000 (single). Because Plan G doesn’t cover the Part B deductible, you won’t see Plan G raise their rates just to keep pace with it like Plan F – which means lower average rate increases.
You can expect to pay around $100 a month for Plan G if you’re 65 years old, all the way up to $200 or more a month when you’re 90 or older. But if you add up the savings in monthly premiums when choosing Plan G over Plan F, you can expect to save hundreds if not thousands of dollars over the course of several years – especially if you add up the additional savings due to lower rate increases.
How much does Medigap Plan N cost?
Medigap Plan N costs less than Plan F or G – but more than a High-Deductible Plan F. On Plan N, seniors are not only responsible for the Part B deductible as with Plan G, but they’re also responsible for doctor and ER copays ($20 and $50 respectively).
If you’re outside of Connecticut, Minnesota, Pennsylvania, Rhode Island, Vermont, Massachusetts, New York or Ohio, you also have to pay for any excess charges that doctors may balance bill (around 15%). But since 96% of all doctors in America “accept assignment,” meaning they take what Medicare pays in full without adding any excess charges, the chances of finding a doctor who balances bills are rare.
If you’re in a state that hasn’t banned it, just ask your doctor if they “accept assignment” and if they do, then you don’t have to worry about excess charges. Seniors living in Ohio have a huge opportunity to save even more money on their supplement when they enroll in a Plan N.
Plan N Medigap Plans start around $90 a month if you’re 65 years old and can go all the way up to $200 or more a month if you’re 90 or older. Since a Plan N doesn’t cover the Part B deductible, it may experience lower rate increases than a Plan F, which must raise rates to accommodate the annual increase(s) in the Part B deductible.
