Medicare beneficiaries are familiar with many of the out-of-pocket costs associated with their coverage. They must pay their Medicare Part B premium each month, and they also need to pay deductibles, copayments, and coinsurance when they receive services from a healthcare provider.
Many people turn to Medicare supplement insurance or Medigap plans to help cover some of these out-of-pocket expenses. As you might expect, these Medigap plans have a cost.
So, how much do they cost? We’ll tell you everything you need to know about the cost of Medicare supplement insurance and provide some additional details about what they cover.
Medicare Supplemental Insurance Costs For 2024
In 2024, a Medicare supplement insurance (Medigap) plan will cost an average of $50 to $300 monthly, with most paying around $150. You might wonder why this cost range is so wide. To fully understand the cost of Medicare supplement insurance, it helps to understand precisely how it works.
First, Medigap policies are administered and sold by private insurance companies. While these are standardized plans in most states, these companies can set prices based on age, gender, location, tobacco use, medical history, and other factors.
In addition, there are ten different types of Medigap plans available. Each provides different coverage details, which means they all have different costs. Here is more information about the various costs you can expect with Medigap.
Premiums Costs
The Medigap monthly premium is typically the highest plan cost associated with your Medigap policy. Your premium depends on factors like age, gender, location, medical history, and whether or not your plan has an annual deductible.
Some Medigap plans provide more comprehensive coverage than others, and those plans also come with higher premiums. Here, we will look at average premium prices for each type of Medicare plan.
- Plan A – $184
- Plan B – $297
- Plan C – $322
- Plan D – $177
- Plan F – $168
- Plan G – $1183
- Plan K – $102
- Plan L – $171
- Plan M – $107
- Plan N – $1230
It should be noted, however, that Plan F policies are no longer available to new Medicare enrollees as of January 2020.
Deductibles
Most Medigap plans do not have an annual deductible you need to meet before the plan begins to pay for things. However, a couple of high-deductible plan options require a yearly deductible to be met. In exchange, your plan premiums will be lower.
- The only two plans offering a high-deductible option are Medicare Plan F and Plan G. Remember that Plan F is no longer available to new enrollees. Medicare Plan G is the only plan you can purchase new that includes a deductible.
For 2024, the Plan G deductible is $2,800. The deductible for Plan F is the same amount. This means that you must pay this amount out of your pocket before your Medigap begins to pay for qualified medical expenses.
Copayments
One of the great things about a Medigap plan is that there are no copayments associated with the plan. The plans even pay for your Medicare copayment that might otherwise be required.
So, suppose you visit the doctor and have a Medicare Part B copayment of $20. Your Medigap plan might pay the $20 copay depending on your Medigap coverage. This helps lower your out-of-pocket expenses associated with Medicare, meaning your total healthcare expenses will generally be lower.
What Medicare Supplemental Plans Cover
Now that you know how much a Medicare supplement plan costs, you are likely wondering what these plans cover. The coverage details vary based on the specific plan that you choose. Let’s start by looking at what your Medicare Part A coverage covers.
Remember that Medicare Part A is hospital insurance that covers inpatient care and hospital stays.
- All Medigap plans cover your Part A coinsurance amount and
- Provide up to 365 additional days of hospital coverage once your Medicare benefits are used up.
- Most plans also cover the first three pints of blood used in a transfusion since Medicare only covers the amount after the first three.
- All Medigap plans cover Part A hospice care copayments or coinsurance amounts; most plans pay 100% of this amount.
- A couple of plans only provide 50% or 75% coverage.
- Several plans cover your coinsurance amount for care in a skilled nursing facility, and
- Most all Medigap plans will cover your Part A deductible.
Now, let’s explore what Medicare supplement plans cover regarding your Medicare Part B coverage. Remember that Medicare Part B is traditional health insurance. It covers doctor visits, lab tests, and preventive care services.
New Medigap policies can no longer cover your Medicare Part B deductible. Medigap Plan C and Plan F can no longer be sold to new Medicare enrollees because both of these plans cover the Part B deductible. If you already have one of these plans, you can keep it. However, new plans can no longer be sold.
- All Medigap policies cover your Part B coinsurance amounts and copayments, most of which cover these amounts at 100%.
- Some plans — Plan G and F — cover your Part B excess charges.
Remember that Medicare Part B typically pays 80% of the Medicare-approved amount for outpatient services. If your provider charges more than the Medicare-approved amount, you might be stuck with the bill for the excess. However, these two Medigap plans will cover the excess amount, so you do not have to pay for it out of your pocket.
- Finally, about half of Medigap insurance plans pay for healthcare costs related to foreign travel emergencies.
Suppose you need emergency treatment while out of the country; some Medigap plans will cover it. Remember that Original Medicare typically only covers services received in the United States. So, without the proper Medigap plan, you might be stuck with a hefty bill if you need to receive treatment while out of the country.
KEY TAKEAWAYS
- Medigap, or supplemental insurance, comes with a cost. You will be required to pay a monthly premium, and with a few select plans, you’ll have a deductible. However, you won’t have any copays.
- New Medigap plans do not cover Medicare Part B deductibles, and no plan covers prescription drugs or assisted living facilities.
- To be eligible for Medigap, you must be enrolled in Original Medicare, which means, in most cases, you’ll need to be 65 or older.
Services Not Covered By Medicare Supplemental Plans
Even though Medigap plans provide a wide range of covered services, they do not cover a few things.
- One of the most significant items no longer covered by new Medigap plans is your Medicare Part B deductible. The law no longer allows new policies to cover this amount. So, since Plan C and Plan F cover the Part B deductible, they can no longer be sold to new enrollees.
- Another item not provided by Medicare supplement insurance is prescription drug coverage.
Your Medigap policy will not provide any payments for prescription drugs. If you need this coverage, consider enrolling in a Medicare Part D prescription drug plan. Part D plans offer coverage for prescription drugs and typically require just a copay for most generic medications.
- In addition, Medigap does not cover stays in assisted living facilities. Your Medicare health plan does not cover these expenses either, so you will be forced to pay out-of-pocket for those charges.
Some charges related to skilled nursing facilities are covered, but the facility must strictly meet the definition of a skilled nursing facility. Assisted living homes are not covered under that definition.
- Finally, Medigap does not provide coverage for dental or vision expenses.
Original Medicare does not cover these expenses, as it does not provide any dental or vision coverage. Some Medicare Advantage plans provide dental and vision benefits; however, you cannot be enrolled in a Medicare Advantage plan and a Medigap policy. You are limited to selecting either one of the other.
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Do You Really Need Medicare Supplemental Insurance?
The answer to this question depends on your specific situation. If you typically visit the doctor often and are required to pay numerous copays throughout the year, then Medicare Supplemental insurance might be a good idea.
Similarly, a Medigap policy might be right for you if you receive regular medical treatments requiring out-of-pocket costs like coinsurance amounts. However, if you rarely visit the doctor, the monthly premiums associated with a Medigap plan might cost you more than your regular medical expenses.
You can always check with a licensed insurance agent in your local area who can help you explore plan options and determine whether this coverage is right for you. Remember that you might also enroll in a Part C Medicare Advantage plan instead.
Many of these plans have low or no premiums and an out-of-pocket limit for your medical insurance. Private insurance companies also manage advantage plans, so they can set their own rules for costs and coverage as long as they provide at least the same coverage as Original Medicare.
TIP
You can switch between Medigap and Medicare Advantage plans during the open enrollment periods. However, if you don’t select Medigap during your initial enrollment, you will need to undergo a complete underwriting process. This evaluation may lead to higher costs or coverage denial.
Eligibility & Enrollment For Medicare Supplemental Insurance Plans
So, who is eligible for a Medicare supplement plan, and how do you enroll? You need to be enrolled in Original Medicare to be eligible for Medigap.
Eligibility
- You must be at least 65 years old, and your eligibility starts when you first enroll in Medicare Part B.
- Younger individuals can also receive Medicare once they have been on Social Security disability benefits for 24 months or are diagnosed with ALS or ESRD.
These younger individuals are also eligible for Medigap.
Enrollment
Signing up for a Medigap insurance policy is easy. First, not all Medigap policies are available everywhere. The ones available to you will depend on your ZIP code. You can use the Medicare plan locator tool to find a plan in your area.
- If you enroll in Medigap coverage, you should do so during the general enrollment period. This period begins when you turn 65 and first sign up for Medicare Part B and lasts six months.
- During this time, your Medigap policy is a guaranteed issue policy. This means you will be guaranteed coverage and pay the same premium regardless of your medical history.
If you wait and sign up after this period, your policy will need to undergo full medical underwriting. Based on your issue age and medical history, you might pay a higher premium, or you could even be denied coverage completely.
- Even if you don’t get signed up during general enrollment, you can still sign up during the annual Medicare open enrollment period. This period runs from January 1 through March 31 each year.
Many people with a Medicare Advantage plan might wonder whether they can switch to a Medigap policy. The answer is yes. You can switch to Medigap during the Medicare Advantage selection period each year. To enroll, contact the insurance company that offers the plan you wish to enroll in. They can get you signed up for coverage.
The Bottom Line
Medicare supplemental insurance plans are not officially part of the Medicare program. These plans are run by private insurance companies, although the plans are standardized in 47 states.
The average Medigap plan in 2024 will cost you about $175 per month, although the costs can vary widely depending on your specific coverage plan.
Medigap plans help pay for out-of-pocket expenses like copays and deductibles, and they can save you a lot of money in the long run in some cases.
Frequently Asked Questions
The least expensive supplement plan is the high-deductible Plan G. While Plan G provides some of the most comprehensive coverage of any Medigap plan, the high-deductible plan results in a lower monthly premium.
The tradeoff is the fact that you will need to meet a deductible of $2,800 before your plan begins to pay for any of your expenses.
Outside of the high-deductible plans, Plan K or Plan N will typically be the next least expensive plan.
Medicare supplement Plan F is usually the most expensive plan because it provides the most comprehensive coverage. Remember that Plan F can no longer be sold to new Medicare enrollees since Medigap can no longer provide coverage for your Part B deductible.
Medigap Plan G is typically the most expensive new plan available. The coverage for Plan G is the same as Plan F, with the exception of the Part B deductible.
Medicare Advantage rolls all your Medicare coverage into a single plan. These plans are managed by private insurance companies, and they often provide additional benefits, like vision and dental coverage plus prescription drug coverage.
Medicare supplement insurance, on the other hand, is only available for enrollees of Original Medicare. These plans help pay for out-of-pocket expenses associated with your Medicare coverage, such as copays and coinsurance amounts.
You can find a Social Security Administration office near you by using our SSA office locator and searching for your closest location.
