Medicare Supplement Insurance (Medigap) Costs

Original Medicare (Parts A and B) covers the majority of your healthcare needs, but it’s not intended to cover everything. If you rely on Original Medicare alone, you risk “gaps,” which may lead to significant expenses from medical treatments and extended hospital stays.

Supplement Insurance (Medigap) is health insurance sold by private companies to cover costs in these gaps.

Also known as letter plans, Medigap policies range from essential coverage, Plan A, and increases alphabetically to the most comprehensive Plan J (although this plan is no longer available to new beneficiaries). Plans K and L also cover a portion of the Part A and B deductibles A deductible is an amount you pay out of pocket before your insurance company covers its portion of your medical bills. For example: If your deductible is $1,000, your insurance company will not cover any costs until you pay the first $1,000 yourself. . In contrast, Plan N focuses on Plan A deductibles. For more information on each plan, check out our Medigap coverage guide.

It’s important to know that all Medigap policies are standardized ^[i]  by the federal government, which means each plan must be the same in each state. For example, a Plan “A” policy sold by “Company 1” must provide the same coverage as the Plan “A” policy sold by “Company 2.”

Aside from which plans are available in your state, one of the things you’ll want to figure out before buying Medigap is how the insurance company calculates its rates ^[i] . We put together a breakdown to help answer, “How much does Medicare supplemental insurance cost?”

To be eligible Some health plans require you to meet minimum requirements before you can enroll. for a Medigap plan, first, you must be enrolled in Original Medicare (Parts A and B). When you combine Medicare Part A Medicare Part A, also called "hospital insurance," covers the care you receive while admitted to the hospital, skilled nursing facility or other inpatient services. Medicare Part A is part of Original Medicare. and Medicare Part B Medicare Part B is the portion of Medicare that covers your medical expenses. Sometimes called "medical insurance," Part B helps pay for the Medicare-approved services you receive. with a Medigap plan, you pay a monthly premium A premium is a fee you pay to your insurance company for health plan coverage. This is usually a monthly cost. for Medigap, as well as any Original Medicare premiums.

How is the cost of a Medicare supplement policy determined?

Insurance companies use one of three formulas, or rating systems, to determine the supplemental insurance cost.

Some states offer a low-cost version of their Medigap plans, which is called Medicare SELECT. The low cost comes from the limited network of healthcare providers A healthcare provider is a person or organization that is licensed to give healthcare (i.e. a doctor or a hospital). and hospitals that are covered. If you must receive care that’s out-of-network Out-of-network refers to doctors, hospitals and other providers that do not have an agreement to treat your health insurance company's clients. Visiting an out-of-network provider typically means more out-of-pocket costs and less coverage. , you’ll be responsible for all the costs not included in your coverage.

Insurance companies and providers must give a clear description of Medigap costs, including coverage limitations Limitations are restrictions on your health insurance coverage. Either your plan won't cover a service, or there may be cost limits on the coverage. . Your Medigap costs will be higher if you put off enrolling when you’re first eligible.

Your open enrollment period includes guaranteed issue If you have guaranteed issue rights, insurance companies are required to sell you a Medigap (Medicare Supplement) policy without any additional conditions. rights, which means you cannot be denied coverage because of your medical history.

If you wait to sign up for Medigap after your OEP, you may not have the same rates or coverage levels.

At GoHealth, we have teams of licensed insurance agents to evaluate Medigap plans and shop each state’s best rates. Of course, there are also several resources to do it yourself. If you’re ready to purchase Medigap insurance, or if you have any questions about what it costs or what it covers, contact us. Our licensed insurance agents can evaluate your needs, medical history and current Medicare status to make sure you get the coverage you need, when you need it.

Refer to our Medigap enrollment guide for further information.