What Does Medigap Insurance Cost?Posted by Medicare Made Clear
Original Medicare (Medicare Parts A and B) covers a lot, but it doesn’t pay all your medical expenses. For the benefits you receive, for example, there are also deductibles, copays and coinsurance to pay. Private insurance called Medicare Supplement Insurance (also known as Medigap) plans enable Original Medicare beneficiaries to buy additional insurance to help pay deductibles, copays and coinsurance, but also to pay for things like blood transfusions, additional hospital days beyond what Original Medicare will cover, and more.
Here’s how it works:
- There are 10 Medicare Supplement Insurance plans named “A” through “N.”
- The plans are standardized by the federal government so each company offering a Medicare Supplement Insurance plan offers the same benefits as the next company for the same plan. For example, all plans named “A” will offer the same benefits no matter what company offers them.
- Some plans include more benefits than others, with Plan F including the most and Plan A, the fewest. Not all plans are available in all states.
Premiums vary widely for Medicare Supplement Insurance plans. There are three different ways that companies decide how much their premiums will cost:
- Community rated – these plans are available to everyone in a specific community for the same price. While prices may still increase, they will do so consistently for everyone in the community.
- Issue-age rated – the younger you are when you buy the plan, the lower your premium price will be.
- Attained-age rated – your premium price is based on your current age. As you get older, your premium price increases.
Other factors may affect the premium cost, including discounts provided to certain groups—such as non-smokers—medical underwriting for pre-existing conditions and unique pricing for high-deductible plans.
Comparing Plan Benefits
Each plan reduces costs in specific areas. The example below compares plans A, C and F. Plan A covers the fewest costs, while Plan F offers the most benefits. Premiums are shown in ranges and may vary based on the price rating method or other factors.
In this table, the cost sharing (deductible, copay and/or coinsurance) owed by the insured under Original Medicare is $1,471. Under Medicare Supplement Insurance Plan A, those costs are reduced to $1,439; under Plan C, the costs are reduced to $24; and under Plan F, the cost sharing is reduced to $0.
Because a Medicare Supplement Insurance plan can require a substantial monthly premium, you should balance the premium price against your expected use of benefits. For example, Medicare Supplement Insurance plans may offer a good solution to ease the financial burden for those with heavy medical expenses.
Choosing a Plan
By now you might be asking, which plans are best? A general rule with Medicare Supplement Insurance plans is that the higher the cost of the plan, the more generous the benefits covered will be. But see for yourself. Using the table on this page, consider the kind of medical expenses you expect to incur. If you expect to incur a lot of Part B (doctor) charges, Plan F may be a good choice. If, instead, you need less coverage, Plan A may offer a better fit.
When you’ve found a plan you are interested in, use the Medicare.gov Medigap Policy Search plan finder to research and compare various Medicare Supplement Insurance plans. Since each company has freedom to price plans as they wish, you may find that for a given plan, premiums can vary widely from company to company. For help with Medicare Supplement Insurance plans in your state, contact your State Health Insurance Assistance Program.
For more information contact the Medicare helpline 24 hours a day, seven days a week at 1-800-MEDICARE (1-800-633-4227), TTY 1-877-486-2048. You can also contact UnitedHealthcare® Medicare Made Clear to learn more at 1-877-619-5582, TTY 711, 8 a.m. – 8 p.m. local time, seven days a week.
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