Average Cost of Medicare Supplement Plans

Summary: The average cost of Medicare Supplement plans can be hard to pinpoint because monthly premiums are based on a variety of factors different for each person. They can be based on age, gender, location, and more. Here, we’ll share what goes into the pricing of a Medicare Supplement plan, how much an average top-rated plan will cost, and how you can determine the right Medicare Supplement plan for your budget. Estimated Read Time: 16 mins

Table of Contents:

1. What is the Average Cost of a Medicare Supplement Plan?
2. How Are Medigap Premiums Determined?
3. Examples of Average Costs of Medigap Plans
4. Average Cost of Medicare Supplement Plan F
5. Average Cost of Medicare Supplement High Deductible Plan F
6. Average Cost of Medicare Supplement Plan G
7. Average Cost of Medicare Supplement High Deductible Plan G
8. Average Cost of Medicare Supplement Plan N
9. Average Medicare Supplement Costs for Other Plans
10. When Do Medicare Supplement Rates Change?
11. Other Options if Your Medigap Rates Change

If you are shopping around for Medicare Supplement coverage, you may be thinking: What is the average cost of a Medicare Supplement plan?  It’s an important question, but pinpointing the cost of a Medicare Supplement plan can be a complex task.

Medicare Supplement (also called Medigap) plan costs can range from person to person based on a variety of factors. These factors can include your age, the plan you choose, tobacco usage, location, and more. Therefore, while it’s difficult to determine a ballpark for what you will pay exactly for Medigap coverage, you’ll notice that premiums average between $50-$500+.

Read more below about how much some of the top-rated Medicare Supplement plans cost, what goes into determining the cost of Medicare Supplement plans, and how you can gain benefits that cut costs while keeping you protected.

What is the Average Cost of a Medicare Supplement Plan?

The average cost of Medicare Supplement plans depends on a variety of personal factors. However, four significant factors affect your Medicare Supplement plan’s cost. These determinants are your location, age, gender, and tobacco use.

It’s important to remember that all Medigap plans are standardized by the government so that the same plan will have identical benefits across carriers. For example, the benefits will be identical if you go with Medicare Supplement Plan G through Aetna or Cigna; the only difference will be the premium you pay.

Even if your neighbor has the same Medigap letter plan through the same carrier as you, their premium will not be the same as yours. This is due to the several factors that impact Medigap premium rates mentioned beforehand

How Are Medigap Premiums Determined?

As mentioned above, the main factors that determine your Medicare Supplement rates (age, gender, location, and tobacco use) are generally taken into consideration by each insurance company. However, there are other lesser-known factors that insurers will take into account when charging your monthly premiums.

The following nine factors impact your personal rate quotes for Medicare Supplement plans.

1. Your age
2. Your location
3. Your gender
4. Tobacco use
5. Household discounts
6. How you pay
7. Rate increase history
8. When you enroll
9. Rate locks

Age

A common question is “Do Medicare Supplement premiums increase with age?” The answer is: It depends.  Specifically, it depends on the rating method used by your Medigap carrier.

There are three rating methods that carriers use to determine Medigap premiums in each state. They are the following:

• Attained age rating: This is the most common Medigap rating method amongst insurance companies in each state. Under this rating, premiums are based on how old you are when you enroll in your Medigap plan. The younger you are, the lower your premium. However, your premium does increase as you get older, and these rate increases are dependent on age.
• Issue age rating: This rating method is based on how old you are at the time your carrier issues your Medigap policy. Like with the attained age method, premiums will be lower if you enroll as soon as you’re eligible at 65. However, even though premiums under the issue age method still go up every year, the rate increases are not age dependent like with attained age plans.
• Community rating: Community-rated Medigap plans are based on location. Everybody within a certain area (such as within the same zip code) pays the same premium regardless of age. Community-rated plans do not have age-related premium increases.

Additionally, if you’re eligible for Medicare due to having a disability and collecting SSDI for 24 months, your premiums could be three to four times higher than those of beneficiaries who aged into Medicare.

Location

The amount you pay for a Medigap plan might be very different if you live in another state. For example, a 65-year-old woman living in Florida pays an average of $195 in monthly premiums for Medicare Supplement Plan F.

If she were living in Texas, the same woman would only be paying around $123 in monthly premiums for the same plan. However, in New York, she would be paying about $306 for the same Medicare Supplement Plan F as in the other two states. As you can see, your location is a significant factor in determining what you’ll pay in monthly premiums for a Medigap plan.

Gender

You might have been unaware that your gender can be a determining factor in your Medigap rates. Since women are often healthier than men on average, female beneficiaries pay about $10-30 less in monthly premiums.

For example, a 65-year-old man from Palm Harbor, Florida, will receive quotes for Medicare Supplement Plan G that average about $176 per month. Meanwhile, the cost of Medigap Plan G in Florida for a woman who is the same age and lives in the same ZIP Code will reflect quotes for an average of roughly $169 per month.

Texas follows the same pattern, with the 65-year-old man paying $112 on average for Plan G and the 65-year-old woman paying around $98. Not all states use your sex/gender to determine your Medigap premiums. For example, in New York, the man and woman can both expect to pay $268 or more per month for their Plan G.

Tobacco Use

Those who smoke, chew, or use vaping products can expect to pay up to 10% more in monthly premiums. This is because those who use tobacco tend to incur more medical conditions.

Household Discounts

Some carriers offer discounts to those living in the same household. If, for example, your spouse enrolls in a plan with the same carrier you use, you both might be eligible for a discount. Discounts vary and depend on the carrier with which you choose to enroll. If your carrier offers a household discount, you can expect to pay 5-15% less for your policies.

How You Pay

Some carriers charge more if you choose to pay quarterly, semiannually, or annually. This is because they prefer you to pay monthly. Also, it’s more cost-effective for carriers to process payments electronically versus by check or credit card. Because of this, some carriers will discount your premiums if you pay electronically.

Rate Increase History

You’ll want to ensure the carrier you enroll in has a financial rating of A or better. You want to ask your agent about the carrier rate increase history. Also, it’s best to choose a carrier that has been in the market for at least five years.

When You Enroll

One of the most significant factors determining your Medigap premium rate is when you enroll in your plan. The optimal time to enroll is during your Open Enrollment Period. This timeframe may only happen once in your lifetime. Your Medicare Supplement Open Enrollment Period takes place during the six-month window that begins the first day of the month of your Part B effective date.

During this time, a carrier can’t deny you coverage or charge you higher monthly premiums due to any health conditions or medication you take. Carriers may require you to go through Medicare Supplement underwriting questions outside your Open Enrollment Period. You may then be denied coverage due to pre-existing conditions or need to pay more in monthly premiums.

Rate Locks

Some carriers offer a 12-month rate lock. In this case, even if your effective date isn’t for a few months, you can benefit from enrolling as soon as possible to prevent any rate increases.

Examples of Average Costs of Medigap Plans

To help you understand how the cost of Medicare Supplement plans varies per individual, we include examples of Medigap rate quotes from three ZIP Codes across the United States for people of different ages and genders.

Please note that all of our examples are for non-tobacco users. If you use tobacco, you can expect the cost of your supplemental health insurance to be higher than the sample prices on this page.

Average Cost of Medicare Supplement Plan F

The average cost of Medicare Supplement Plan F premiums is a bit higher than those of other plans, ranging from $251 to $524 per month, in our sample tables below. However, Medicare Supplement Plan F offers the most comprehensive coverage of all the Medigap plans, making it the most popular plan for those who qualify. In order to enroll in Medigap Plan F, you must have been eligible for Medicare benefits before 01/01/2020.

As you can see, Medigap premium rates vary by location. In most states, women pay lower premiums than men, as women tend to live longer on average.

However, not every state follows this pattern. You may notice that New York is one of the states that deviates. Because New York is a guaranteed issue state, most of their plans are community-rated. Thus, monthly premium Medigap costs are the same, regardless of gender.

You’ll also see it’s best to enroll in a Medicare Supplement plan when aging in at 65 rather than waiting. You can see from the table above that your Medicare Supplement cost may be higher at age 75 compared to 65 years old.

The increase in Medigap plan costs continues every year, but it is likely that the older you are when you enroll, the higher your Medicare Supplement premiums will start.

Average Cost of Medicare Supplement High Deductible Plan F

High Deductible Medicare Supplement Plan F offers the same benefits as standard Medicare Supplement Plan F, but you must reach a higher deductible before receiving coverage. While it may take a while to reach the deductible, the average monthly premium for your High Deductible Medicare Supplement Plan F is lower than for the standard Plan F. Just like Medigap Plan F; you cannot enroll in a High Deductible Plan F unless you were eligible for Medicare benefits before 01/01/2020.

Below, we show an example of how the cost of Medicare Supplement benefits is lower on this plan for the same people in Nevada as the example above for standard Medicare Supplement Plan F.

Average Cost of Medicare Supplement Plan G

Like with any other Medigap coverage option, the average cost of Medicare Supplement Plan G can vary due to your age, location, gender, and tobacco usage. Yet, when we look at how much the Plan G Medicare Supplement cost averages, it’s important to keep things in perspective.

Medicare Supplement Plan G is the most popular option for newly eligible beneficiaries. Because people new to Medicare cannot enroll in Medicare Supplement Plan F, Medigap Plan G has become a new favorite. Boasting the second-most comprehensive collection of benefits, this Medicare Supplement plan covers everything that Medigap Plan F does, except for the Medicare Part B deductible.

Average Cost of Medicare Supplement High Deductible Plan G

The average premium for your Medicare Supplement Plan G High Deductible works similarly to other high-deductible benefits. Because you have a higher deductible, while you enjoy the same benefits as a standard Medicare Supplement Plan G, you pay lower premiums.

However, High Deductible Medicare Supplement Plan G has higher costs as it requires a higher deductible in exchange for lower monthly premiums. This plan is similar to Medicare Supplement Plan F’s high-deductible option before it. Below, you’ll see that the average cost of High Deductible Medicare Supplement Plan G premiums for the same people in New York are lower than they were on standard Plan G.

Average Cost of Medicare Supplement Plan N

The average cost of Medicare Supplement Plan N premiums skews lower than the other two of the top three Medigap plan options. The cost of Medicare Supplement Plan N means you’ll be responsible for some additional expenses, including copayments.

Aside from the copays, however, it covers everything Medigap Plan G does, except for Medicare Part B excess charges. Yet, this is not a downside if you live in a state that doesn’t allow excess charges to begin with.

Average Medicare Supplement Costs for Other Plans

The letter plan itself affects your Medicare Supplement costs and premium rates. With a total of 12 lettered Medigap plan options, less popular plans have different price ranges than the top three because they offer fewer benefits.

Like Medicare Supplement Plan F, Medicare Supplement Plan C is considered first-dollar coverage and is not available to those newly eligible for Medicare. First-dollar coverage means that the plan begins to pay from the first dollar Medicare does not cover. Thus, you pay no out-of-pocket costs.

To learn more about the costs you can expect to pay when enrolling in some less popular Medicare Supplement policies, look below at sample rates for such benefits, beginning with Plan C:

Medigap Plan D doesn’t cover Medicare Part B excess charges, and while similar to Plan C, it also doesn’t your Part B deductible. Again, if the Medicare Supplement cost for Plan D is attractive to you and your state doesn’t allow excess charges, then this isn’t a concern, and these benefits could be right for you.

Medigap Plan K comes with 50% cost-sharing, making the average cost of the monthly premiums for this Medicare Supplement plans lower than most. It also doesn’t cover your Medicare Part B deductible or excess charges.

When Do Medicare Supplement Rates Change?

Unfortunately, Medigap premium increases typically happen every year. They usually go up on your birthday month or your policy anniversary.

The average Medigap rate increases are between 5% and 8% each year, depending on the plan and state, but they could be more or less. As mentioned earlier, Medicare Supplement premiums generally increase based on the age of the Medicare beneficiary due to the rating method their insurance company uses.

Monthly premiums also typically increase annually because of inflation. Furthermore, since Medicare usually increases medical costs and Medigap plans generally cover these costs, insurance companies have to increase premiums to keep covering them.

Other Options if Your Medigap Rates Change

If you can’t keep paying your monthly Medicare Supplement plan premium due to rising costs, you do have a few options.

Your first is to shop around for a new Medigap plan carrier. Because Medicare Supplement plans have standardized benefits, even if you switch to another insurance company, your benefits will be the exact same. A different carrier may have lower monthly premiums or even use a different rating method, though finding a company using a different rating method would be less common.

You could also switch Medicare Supplement plans. A different plan may have fewer benefits but lower monthly premiums.

Another option is to ask your current carrier about discounts for the Medigap plan you’re enrolled in. Some companies will offer household discounts for spouses who enroll in the same Medigap plan with the same carrier.

Lastly, if your current Medicare Supplement plan is unaffordable and none of the other Medigap plans are much cheaper, then you can look into a Medicare Advantage plan (also called Medicare Part C). Medicare Advantage plans offer comprehensive coverage that includes the benefits from Original Medicare Part A and Part B, and many offer prescription drug coverage. Many of these plans offer a low monthly premium, but you will have other cost-sharing expenses that may be higher than a Medigap premium, so it’s important to do your due diligence by speaking with a licensed agent.

It’s important to note that the first time you join a Medicare Advantage plan, you can always switch back to a Medicare Supplement plan within 12 months without having to go through medical underwriting.

How To Save On Medicare Supplement Plans

The monthly averages for what any Medicare Supplement plans cost are simply examples. Medigap plans across the country may have similar premiums, but they can range higher or lower depending on the previously mentioned factors.

To understand how much you’ll pay, it’s a good idea to get an accurate, personalized Medicare Supplement quote from a licensed insurance agent. Our team is here to help you find the right Medicare coverage for your healthcare needs.

Working with top-rated Medigap insurance companies, we provide you with a personalized look at the benefits that help cover your healthcare needs and fit your budget.

Call us today for a Medicare Supplement plan cost comparison. We will give you a free, no-obligation quote for your benefits. If you are unable to call now, you can complete our online rates form, and we'll produce a personalized rate comparison suited for you.

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