Medicare Supplement Pricing and Quotes on Medigap

Just like Medicare Advantage plans and private health insurance, costs for a Medigap policy vary based on what kind of plan you need. But, you can draw some clarity as to what your prospective plan may cost based on various factors such as region, health, marital status, and age.

Medigap plans are offered by private insurance companies, and while federal and state regulations monitor many of their features (such as what kind of plans can be offered and with what benefits), cost is set by the individual company. For that reason, it is important to understand how your individual situation can impact the cost, and use that information to smartly shop around before settling for a plan.

How Age Impacts the Cost of Medigap Plans

Age is one of the largest factors in determining the monthly cost of your Medigap plan. While an insurance company cannot change your benefits based on your age or health condition, it can use that number to determine how much you will pay for supplemental insurance. Private insurance companies that offer Medigap plans use three kinds of age-related formulas to help determine the cost of this additional health insurance coverage: no-age rates, issue-age rates and attained-age rates.

No-Age Rated Policies

No-age rated Medigap plans, also called community-rated policies, do not factor your age into the overall cost of your plan. With this setup, everyone with a particular plan pays the same monthly premium regardless of age. As you get older, your premium may increase or decrease based on inflation or other factors, but never because of age. For example, if Betty and Joyce an enrolled in a community-rated policy, they will pay the same cost for the same plan, even if Betty is 10 years older. In the future, they may pay more due to rising healthcare costs, but not because of aging.

Issue-Age Rated Policies

With issue-age rated policies, the timing of your enrollment impacts how much you will pay over the span of your lifetime. In some sense, issue-age related policies reward you for signing up for a plan at a younger age because the premium is based on the age you enroll and remains at that cost. Younger enrollees will have lower monthly premiums than older enrollees, but no one’s monthly expense will change due to age. Overtime, your premium may increase or decrease due to economic factors like changing healthcare costs, but not due to aging. For example, George buys a policy at age 65 and pays a monthly premium of $120. His premium may increase over time, but never because of his age. Conversely, Jim buys the same policy at age 70 and pays a monthly premium of $155. Jim’s policy costs more simply because he was older when he enrolled, and like George’s premium, it will not increase due to aging.

Attained-Age Rated Policies

With attained-age rated policies, you will pay more over time for your supplemental coverage simply due to your age. Monthly premiums are based on the age you have “attained,” and increase as you get older. Initially, attained-age policies offer low premiums for younger enrollees, but can rapidly become expensive for older buyers. For example, Margaret purchases an attained-age policy at 65-years-old. The first year, she pays $120, but at age 67, she pays $125. By age 70, Margaret pays $150 simply because she has gotten older.  Plus, attained-age policies still fluctuate based on healthcare costs, inflation and other factors.

Other Factors in Estimating Supplemental Plan Pricing

While age is a major factor in Medigap plan pricing, there are other aspects that affect how much you will pay per month.

  • Gender: In many cases, women get discounts for healthcare coverage while men pay more.
  • Smoking: Non-smokers may receive discounts since smoking is associated with health issues that would require an insurance provider to contribute more to your healthcare expenses.
  • Marital Status: Many private insurance providers believe that married couples are more likely to have healthier lifestyles, and therefore offer discounts to married individuals looking to enroll in a plan. Remember — Medigap plans are for one person only, and every person must have their own. Couples cannot share a policy.
  • High-deductible options: Some Medigap plans offer lower premiums based on a high deductible. In these cases, you will be required to pay all of your policy deductible before your Medigap plan kicks in.
  • Medicare SELECT policies: Medicare SELECT plans offer less expensive premiums for supplemental coverage because they limit you to visiting healthcare practitioners within a network. These networks allow doctor’s offices and hospitals to offer their services for less, helping to keep your premium low.
  • Economic factors: Rising healthcare costs and inflation can impact your monthly premium and are usually noticeable over a long period of time. As the cost for medical services increases, insurance companies may pass along some of the expense to you by increasing your monthly premium.

Where Can I Get a Medigap Plan Quote?

If you are comparing the same plan with several different insurance companies, it is important to be sure you are comparing the same plan. Medigap plans are regulated by state and federal guidelines, making it easier for you to determine what benefits you will get and ensure you are getting a fair rate. But, you should know that some states offer different standards for Medigap plans; Massachusetts, Wisconsin and Minnesota have slightly different setups for Medigap plans, and if you live in one of these states, it is important to understand the differences between plan options.

The biggest step to finding the Medigap plan that works best with your health needs and budget is the quote process — that is comparing the costs for your best-fit plan among different insurance providers. There is nothing wrong with shopping around to find the best deal and it is possible to contact individual providers for an estimated cost without the obligation of enrolling. Getting quotes for Medigap plans can be time consuming, but PolicyZip’s Medicare Specialists can help you narrow down your options with the best cost-savings. To find out more about getting the Medigap plan that suits your needs, fill out the form below or call (844) 205-7510.