What a Medicare Supplement costs, and why

What changes a Medigap premium

Medigap premiums vary widely depending on the insurance company, the plan and where you live, and each company decides how it sets the price of its policies. That choice can change what you pay now and in later years.

The plan letter sets the benefits, not the price. Medigap policies are standardized: policies with the same letter offer the same basic benefits wherever you live and whichever company sells them, and there are ten lettered plans in most states. So when you shop, compare the same letter across companies: one company's Plan G with another company's Plan G, for example.

Other things that change the price

• Discounts. Some companies offer discounts for women, non-smokers or married people, for paying yearly or by automatic payment, or for buying more than one policy.
• Health questions. A company may use medical underwriting, or charge a different premium, when you are outside your Medigap Open Enrollment Period and have no legal right to buy that policy.
• Medicare SELECT. These policies may require you to use certain hospitals, and in some cases doctors, and their premium may be lower.
• A high-deductible option. Some plans are sold with a high deductible that you pay before the policy pays anything, which changes the premium.

Premium amounts typically go up each year. Medicare doesn't pay any part of a Medigap premium, and you keep paying your Part B premium as well.

Three ways a company prices a policy

Every Medigap policy is priced, or rated, in one of three ways, and Medicare.gov calls it important to ask which one a company uses. The method decides whether your age raises the premium.

1. Community-rated

   also called no-age-rated

   Generally the same premium for everyone, whatever their age or sex. Premiums may go up because of inflation and other factors, but not because of your age.

   Bought younger

   Bought older

2. Issue-age-rated

   also called entry-age-rated

   Based on your age when you buy the policy. The premium is lower for people who buy younger and doesn't change as you get older, though it may go up because of inflation and other factors.

   Bought younger

   Bought older

3. Attained-age-rated

   priced on your current age

   Based on your current age, so the premium goes up as you get older. It may cost the least at first and can eventually cost the most. Inflation and other factors may raise it too.

   Bought younger

   Bought older

Each bar is a year of premium for someone who bought younger and someone who bought older. The drawings show how the premium moves, not a price.

Ask each company which method it uses before you compare its price with another company's.

When you buy can change what you pay

Your Medigap Open Enrollment Period lasts six months. It starts the first month you have Medicare Part B and are 65 or older. During it you can buy any Medigap policy sold in your state, and the company can't turn you down because of health problems; Florida law adds that it can't charge you more for them.

It happens once. It doesn't repeat every year the way the Medicare Open Enrollment Period does, which runs from October 15 to December 7 each year.

After it ends, federal law doesn't require a company to sell you a policy. If one will, it may cost more because of past or present health problems. In a few limited situations, a company must sell you certain policies without charging more for your health, such as when your Medicare Advantage Plan stops covering where you live.

If you sign up for Part B while you still have job coverage, your six months start then anyway. Employer coverage often gives coverage similar to Medigap.

If you are under 65 and have Medicare because of a disability or end-stage renal disease, Florida law gives you a six-month window too, once you are enrolled in Part B.

Sources: Medicare.gov, Get Medigap Basics, When can I buy a Medigap policy? and Florida Statutes 627.6741.

How to get a real number

Medicare.gov shows estimated costs for the Medigap plans in your area, but for a more accurate price you contact the insurance company. Before you ask for one:

1. Pick the letter first. Medicare.gov's chart shows what each letter pays, and you can see Plan G and Plan N side by side.
2. Ask how the company prices the policy: community-rated, issue-age-rated or attained-age-rated.
3. Ask which discounts apply to you.
4. Ask whether the price assumes you are in your Medigap Open Enrollment Period, and what changes if you are not.
5. Get the price from the insurance company itself.

Once you buy, you keep the policy as long as you pay the premium. Standardized Medigap policies renew automatically every year, even if you have health problems; the company can drop you only if you stop paying, weren't truthful on the application, or the company goes bankrupt or out of business.

A Medigap policy covers one person, so a married couple who both want one buy two policies.

To see what a Medicare Supplement actually pays for, visit the Medicare Supplement page.

Questions people ask

Have a different Medicare question, about costs or enrollment periods? Start at the Answers page.