Medicare Supplemental Insurance Premiums Vary Widely by Plan and Location

Medicare Supplemental Insurance (also called Medigap) costs between roughly $100 and $300 per month for most people, but the actual amount depends on which plan you choose, where you live, your age, and your health history. There is no single "Medicare Supplemental Insurance cost" — the same plan costs different amounts in different states, and some plans cost two or three times more than others even in the same county.

The price you pay also depends on how the insurance company sets rates. Some use age-based pricing, which means your premium goes up each birthday. Others use community rating, where everyone in your area pays the same price regardless of age. A few use issue-age rating, where the price is locked to your age when you first buy the plan and stays the same as you age — though the company can still raise rates for everyone on that plan.

The best way to find out what you will actually pay is to get quotes from multiple insurers in your area. Prices change, and a plan that costs $120 in one county might cost $180 in another 30 miles away.

Key Takeaways

  • Medicare Supplemental Insurance premiums typically range from $100 to $300 per month, but vary by plan type, location, age, and the insurance company's pricing method.
  • Plan F and Plan G are the most comprehensive and usually cost more than Plan N or Plan D, which cover fewer out-of-pocket costs.
  • You pay the lowest rates during the first six months after you turn 65 and enroll in Medicare Part B, a period called the open enrollment window.
  • Getting quotes from at least three insurers in your area is the only way to know what you will actually pay, since prices vary significantly by company and location.
  • Your premium may increase each year due to age, inflation, or changes in the insurance company's rates for your plan.

How Plan Type Affects Your Monthly Cost

The plan letter you choose — Plan A, Plan B, Plan D, Plan F, Plan G, or Plan N — directly determines your premium. Plan F and Plan G cover the most out-of-pocket costs and cost the most. Plan A and Plan B cover less and usually cost less per month. Plan N and Plan D fall in the middle.

Plan F is no longer sold to people newly enrolled in Medicare after December 31, 2019, but people who had it before that date can keep it. For new enrollees, Plan G is the most comprehensive option available. Plan G typically costs $150 to $250 per month depending on your location and age, while Plan N might cost $100 to $180 per month.

The trade-off is that Plan N requires you to pay a copay at the doctor's office (usually $20) and a copay for emergency room visits (usually $50, waived if admitted). Plan G has no copays. If you see doctors frequently, Plan G's higher premium might cost less overall than Plan N's lower premium plus copays.

Age and the First Six Months After Turning 65

Your age affects your premium in two ways. First, if your insurance company uses age-based pricing, your monthly cost rises each year. Second, the six months after you turn 65 and enroll in Medicare Part B are called the Medigap open enrollment period, and during this window you can buy any plan without being denied or charged more because of health problems.

Insurance companies offer their lowest rates during this six-month window because they know they cannot turn you down or charge you extra. Once the window closes, some companies will deny you coverage if you have a pre-existing condition, or charge you a higher premium based on your health history. If you miss this window, you may have to wait until the next calendar year to enroll, and you could pay more.

If you enroll in Medicare Part B at 65 and buy Medigap during the open enrollment period, you lock in rates that are typically 20 to 40 percent lower than what you would pay if you waited and enrolled later.

Location and State Regulation

The same Medigap plan costs different amounts in different states because each state sets its own rules about how insurance companies can price plans. Some states allow companies to charge older people significantly more than younger people. Other states cap how much more an older person can be charged.

Within a state, prices also vary by county and sometimes by ZIP code. Plan G in rural areas often costs less than Plan G in cities, but the difference is not always predictable. A plan that costs $160 in one county might cost $210 in a neighboring county.

You cannot buy a Medigap plan in a state where you do not live, even if it costs less there. You must buy from a company licensed to sell in your state of residence.

What Happens to Your Premium Over Time

Your Medigap premium will likely increase each year. The increase comes from three sources: your age (if the company uses age-based pricing), inflation and rising healthcare costs, and the company's decision to raise rates for everyone on your plan.

Companies must notify you before raising your rate, usually 30 to 45 days in advance. When you receive a rate increase notice, you have the right to switch to a different plan or a different company during a limited window, usually 30 days. You do not have to stay with the same plan or company for life.

Some people find that switching to a less comprehensive plan (for example, from Plan G to Plan N) saves money even after paying the new higher rate. Others find that a different company's Plan G costs less than their current company's Plan G, even after the rate increase.

Getting Quotes and Comparing Costs

To find out what you will actually pay, contact at least three insurance companies that sell Medigap in your state. You can find a list of licensed insurers on your state's insurance commissioner's website or by calling 1-800-MEDICARE.

When you get a quote, have the company tell you the premium for the specific plan you are interested in, the rate-setting method (age-based, community, or issue-age), and whether the company has raised rates in the past three years. Ask what the premium will be in five years if rates increase by the average amount they have increased in the past.

Do not choose based on price alone. A company with a history of large rate increases may seem cheap now but cost more in the long run. Read reviews from current customers about how the company handles claims and customer service.

Frequently Asked Questions

Can I change my Medigap plan to a cheaper one if my premium goes up?

Yes. When your insurance company raises your rate, you have a limited window (usually 30 days) to switch to a different plan or company without being denied coverage or charged more for health reasons. You can switch from Plan G to Plan N, for example, or move to a different company's Plan G if it costs less.

Do I have to pay Medigap premiums forever, or can I stop?

You can stop paying and cancel your Medigap plan at any time. However, if you cancel and later want to re-enroll, you may be denied coverage or charged more if you have developed health problems since you cancelled. Cancellation is permanent in most cases.

What if I cannot afford the monthly premium?

Some states offer programs that help low-income seniors pay Medigap premiums. Contact your state's Medicaid office or call 1-800-MEDICARE to ask whether your state has a premium information program. You can also compare plans to find a less comprehensive option that costs less.

Does Medicare cover the cost of Medigap insurance?

No. Medicare does not pay Medigap premiums. You pay the full premium yourself. Some employers offer Medigap coverage as a retiree benefit, but Medicare itself does not cover the cost.

Will my Medigap premium increase every year?

Most likely, yes. Insurance companies raise rates annually due to age, inflation, and claims experience. The amount of increase varies by company and plan. Some years the increase is small; other years it is larger. You will receive notice before any rate increase takes effect.