Miranda Brumbaugh

The Highs and Lows of Medigap

July 6, 2016

When you sign up for Medicare coverage you’ll soon discover that you might need to also purchase Medigap. In fact, you have to have Medicare, Part A or B, in order to sign up for Medigap health insurance. Your Medicare Supplement Insurance cost covers healthcare expenses, such as deductibles, coinsurance and copayments. For example, if you have to pay $45 for a doctor’s visit when on Medicare, your Medigap plan will pay for that deductible fee. Before you choose a Medigap plan, consider how much Medicare Supplement Insurance cost in general.

How Much Do Medicare Supplement Health Insurance Plans Cost?

The first thing to note here is that Medicare Supplement Health Insurance plans cost ranges extensively from state to state, and company to company. When asking how much do Medicare Supplement Plans cost in your state, do your research so you don’t overpay. There is not a set number or percentage that Medicare holders have to pay for Medigap coverage. However, you can take a look at how much Medicare Supplement plans cost in terms of how much it costs initially and how much it will cost over the years. Also, Medigap plans serve as coinsurance only when you’ve paid up your deductible, unless you have Medigap coverage for the deductible as well.

Before you decide which type of supplement plan to choose for your Medicare coverage, look at what they all offer:

  • Community-rated (also known as no-age-rated pricing) Medigap plans cost the same for everyone no matter how old they are. Instead of rising rates with age, premium costs go up to inflation, etc.
  • Issue-age-related policies do charge you depending on how old you are at the time you purchase a policy. If you are younger you pay less now and over time. However, as with community-related plans your premium costs can increase due to inflation, financial circumstances or the market.
  • Attained-age-related policies increase as you age. If you buy a plan when you’re young, it won’t cost you too much upfront. However, over time as you get older your plan premium will increase in cost.

The way to save money with Medicare supplement coverage is to look at your personal budget. Do you have a set budget for covering expenses every month? If so, then you want supplemental insurance for Medicare that will stay the same for the rest of your life. Community-rated and issue-age-rated policies stay the same. If you are young go for issue-age-related policies to get the best rate. Community-rated policies can be low, if they are low for the entire group.

If you are still working or you have a retirement fund that increases over the years, the attained-age-rated policies can best serve you. This type of plan is also ideal for individuals who are later on in life and perhaps in bad health. Since your costs increase with age, there’s a chance you won’t have to pay the higher premiums.

What are the Lowest Costs for Medicare Supplement Plans?

According to the pricing costs for Medicare supplement plans varies across the board. Insurance companies set premiums to Medigap policies, so what Company A is charging will not likely be the same as Company D. Therefore you need to shop around to see what companies are charging to get the best deal. Also, compare prices within the same type of Medigap policies, i.e. community-rated, issue-age-rated, or attained-age-rated policies.

If You Choose a Low Cost Medicare Supplement Health Insurance Plan, Will the Benefits Still be Worth It?

In order to answer this question, take a look at the extensive Medicare Supplement health insurance plan. It includes 10 different Medigap plans with 10 specific benefits for each plan.

  • Note that if you live in Massachusetts, Minnesota or Wisconsin you won’t have these same options. Your plans are standardized across the state in a different manner.

For these plans, since the cost varies by state, you have to look at which plans offer the most benefits. Those plans include:

  • All of the plans, Medigap Plans A to N, include Part A coinsurance to cover hospital expenses for an extra year post-Medicare.
  • The plans that include Part B coinsurance or copayment include plans A to G, M and N that pays for 100 percent except for $20 office visits and $50 copay for ER visits. Plan K will pay 50 percent of Part B, while Plan L will pay 75 percent.
  • Three other plans also follow the same pay structure as plans A to G, K to N: blood including first 3 pints, Part A hospice care coinsurance/copayment, and skilled nursing facility care coinsurance.
  • Other benefits for plans with various coverage include Part A deductible, Part B deductible, Part B excess charge, foreign travel exchange, and out of pocket limits.

You want to start by choosing which Medigap benefits are most important to you. Then cut out those that don’t offer them at the best rates. Next look at the low cost Medicare Supplement plan that provides the benefits you need. You’ll save money and get the coverage you need, nothing more…

How High Can the Average Cost of Medicare Supplement Plans Go?

Medicare supplement insurance cost depends on the market first and foremost. Since Medicare is a program that is part of a government-run agency there is a lot of red tape involved. Therefore the average cost of Medicare Supplement plans cannot be excessive due to capitalism. All 10 of the Medigap plans come with a set list of benefits offered by all companies providing this type of insurance.

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