A Guide to Medigap Plan Costs in 2023

Average Cost of Medigap

To help you better understand what you might pay for a Medigap policy, we’ve obtained quotes from a number of insurers. Not every plan is available from every provider, but you can expect to pay the following sums for Medigap.

Average Cost of Medigap Plan F

Average Cost of Medigap Plan G

Factors That Affect Cost

Medigap plans are standardized supplementary insurance plans, no matter what insurance company you use. In other words, Plan F from Cigna will offer the same coverage as Plan F from UnitedHealthcare.

The main difference between plans is the cost, which insurance companies determine using many key factors.

The Policy

The type of policy you buy is the most significant factor in how much your Medigap plan will cost. There are currently 12 Medigap plans, each of which is denoted by a different letter, from A to N.

Medigap Plan F offers the most benefits, but it also tends to be the most expensive at an average premium of about $230 per month. The affordable Plan K, however, averages only $77 per month, but it offers fewer benefits.

Pricing Methods

Regardless of the pricing method your insurer uses, you can expect your monthly premiums to go up each year. There are three types of pricing methods for Medigap plans:

• Community-rated plans won’t rise in cost due to your age, but they will likely increase in cost due to inflation or rising health-care costs.
• Issue-age rated plans also won’t increase as a result of your age, but this type of policy will cost less for people who buy in when they are younger.
• Attained-age rated plans are usually the least expensive, at least initially. With costs tied to your age, these policies will become more expensive the older you get.

Location

Location plays a major role in the cost of your Medigap insurance premiums due to local pricing trends set by insurance companies based on demand and the cost of medical care in that area. Medigap premiums are significantly more expensive in Florida than they are in either Texas or California, for example.

Gender

Gender is a major factor in Medigap prices because of statistical trends between genders and how they affect insurance companies’ expectations for paying out your plan.

Women tend to be healthier and live longer than men, for example, which reduces their monthly premiums with most insurance supplement plans. Some states (New York, most notably) do not take gender into account, but most insurance companies do their own calculations when quoting rates for individual plans.

Age

If you take advantage of open enrollment starting at age 65, then you can expect to receive much lower premiums and more eligibility for better plans than at age 85.

Not all plans are issue-age rated or attained-age rated. Clarify with your prospective insurance provider how it calculates its plans’ premiums and whether your age — both at the start of your plan and as you get older — will affect your rates.

Tobacco Use

As with the premiums of many types of insurance, activities known to impact your health can raise your Medigap premiums. Tobacco use, which includes not only smoking but also chewing tobacco and vaping, can raise monthly Medigap costs by as much as 10 percent in anticipation of potential health issues the habit can cause.

Household Discounts

Household discounts can lower the price of your Medigap plan if you live in the same house as someone else with a plan from the same insurance carrier. Discount eligibility is entirely up to the provider, so do some research first to determine whether it offers a discount and how much it would be. Discounts can often be as high as 15 percent.

Mutual of Omaha Medicare supplement plans, for example, provide a 12 percent discount for spouses who enroll together.

Payment Method

Most insurance providers prefer that you pay every month with electronic payments — preferably automatic ones.

Instead, some buyers prefer to pay quarterly or even annually with a check or credit card. Since these transactions are more expensive and time-consuming to process than electronic payments, providers sometimes offer discounts for paying the way they prefer.

Time of Enrollment

The start date of your plan plays a role in its price relative to your Medicare plan. The open-enrollment period, which in this case is the six months after your Part B effective date, is the best time to enroll in Medigap.

During this period, providers cannot require medical tests, charge higher premiums for health issues, or deny you Medigap coverage based on pre-existing conditions. As a result, the plans are priced more competitively.

Bottom Line

Medigap offers supplementary insurance on top of your Medicare plan to cover additional costs, such as co-insurance and deductibles. Insurance companies dictate the premiums of these plans based on many factors, including when you sign up, how old you are, and in which state you live.

The best time to enroll in a Medigap plan is at the start of your Part B effective date, which is displayed in the lower-right corner of your Medicare card. During this time, providers must offer a plan without taking pre-existing conditions into account. They usually offer their lowest premiums during this period.

It’s important to shop around to compare individual premiums. All plans of the same letter offer the same coverage, but not all insurance companies offer the same prices.

To learn more about Medigap and our favorite providers, check out our helpful guides.

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• Best Medigap for a Healthy Person
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