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What Does A Medicare Supplement Cost?

Explore Medicare supplement cost before writing supplemental coverage off as too expensive

Man Holding Question Mark in Front of FaceToo many people make decisions about their Medicare coverage based on misconceptions and second opinions from others. Some Medicare plans have been dismissed outright without doing the proper research.

If you are new to Medicare or are considering making a change during the Medicare Annual Enrollment Period don’t dismiss Medicare supplemental insurance because of second hand information or preconceived ideas about Medicare supplement cost.

Although there are several factors that determine Medicare supplement premiums this article will give a general idea about premiums for Medigap insurance policies (aka Medicare supplemental).

More important than that you will learn how to compare the cost of a Medicare supplement to the real cost of a Medicare Advantage plan and to original Medicare.

How much are Medigap premiums?

Medicare supplement premiums can vary widely and there are several factors that can effect your premium including:

  • Your age when the policy becomes effective
  • Where you live
  • Your gender
  • Whether or not you use tobacco
  • Your health condition in some cases

One of the biggest factors that can effect the cost of Medicare supplement insurance is which of the standardized plans you choose. Medigap plans include plans: A, B, C, D, F, G, K, L, M, and N.

Medicare supplement Plan F is by far the most popular but does come with the highest premium as well.

Not all plans may be available where you live and Massachusetts, Minnesota and Wisconsin have their own standardized versions that differ from those listed above.

To give you a general point of reference  Plan A (the least expensive) can be as low as $70-$90 per month for a female non-tobacco user at age 65. Conversely a male in his late age 80+ who uses tobacco may find the premium for Plan F (most comprehensive) to be well over $300 per month.

But when you compare out-of-pocket costs to original Medicare and to Medicare Advantage plans you start to get the whole story.

To get a good idea of how much different plans will cost head over to the eHealthInsurance website where you can compare Medigap, Medicare Advantage and Part D.

Comparing the potential costs of original Medicare and Medicare Advantage plans to a Medigap policy

A Medigap policy will generally, to one degree to another, pick up your hospital deductible and the 20% out-patient expense that is associated with original Medicare.

Medicare only

The Part A (hospital) deductible is $1316. That can be amortized over 12 months to equal $109.66 per month. Medicare deductibles and premiums will probably continue to increase each year. You are still responsible for 20% of all out-patient costs. How much is 20% of an emergency room visit or a CAT scan or two? Hundreds? Thousands? Medicare supplement Plan F for example would have paid all your costs.

 Medicare Advantage plan

Some Medicare Advantage plans have $0 monthly premiums and some have premiums over $100. One plan with a $0 monthly premium is AARP MedicareComplete.  If you have a premium, after it is paid you are still responsible for cost-sharing amounts for services in the form of co-payments, coinsurance and deductibles.

That inexpensive Medicare Advantage plan could actually cost you more that a Medicare supplement policy. Although to be fair you should add the cost of a Part D plan to your Medigap premium since Medigap does not offer Medicare drug coverage. But still… you do the math.

Another cost associated with a Medicare Advantage plan may not be apparently financial at all. That is your possible lack of freedom to use any provider that accepts Medicare assignment. Believe me if you are enrolled in a HMO and develop a condition that requires a specialist or a hospital specializing in the treatment of that condition and you can’t use there services, you will consider that a cost of having an Advantage plan.


Bottom line on Medicare supplement cost

Everyone’s needs and budgets are different. Medicare supplement premiums vary widely. While you have the opportunity check into Medicare supplement plans to determine if they are a viable alternative to either Medicare only or a Medicare Advantage plan.

If after exploring your Medicare plan options you find that a supplemental policy is out of reach, at least you have the peace of mind that you took the time to explore all options.

For more information read the government publication, “Choosing a Medigap Policy: A Guide to Health Insurance for People with Medicare“.

One comment

  1. Thank you for sending this, I am beginning to learn something about Medicare and all the in’s and out’s, especially since I am on Social Security Disability, and now eligible for Medicare

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