What Is the Average Cost of Medicare Supplement Insurance?
Compare the average cost of each standardized type of Medicare Supplement Insurance plan (Medigap). Find out what affects these costs and compare plans in your area.
The average premium a Medicare Supplement Insurance (Medigap) plan beneficiary paid in 2018 was $125.93.1 But the average cost of each type of Medigap plan can vary quite a bit from one plan type to another.
It’s important to note that each type of Medigap plan offers a different combination of standardized benefits. Plans with fewer benefits may offer lower premiums.
Other factors such as age, gender, smoking status, health and where you live can also affect Medigap plan rates.
The average Medigap premium cost across all plans in 2018 was $152 per month, but some types of Medigap plans have far fewer enrollees than other types of plans. This difference in enrollment affects the average monthly premium that is actually paid by Medigap beneficiaries.
That's why the weighted average Medigap plan premium paid by a beneficiary in 2018 was $125.93 per month.
(Data excludes Plan K and Plan L, which have a combined enrollment of fewer than 1.5% of all Medigap beneficiaries as of 2017).2
Medicare Supplement Insurance Plan
Average monthly premium
High deductible F
* Medigap Plan J was discontinued for new enrollees in 2010. Only beneficiaries who enrolled in the plan prior to that time may be currently enrolled in Plan J.
What affects the cost of Medicare Supplement Insurance?
There are several factors that affect the price of a Medigap plan, such as the plan benefits, the Medicare Supplement Insurance company selling the plan, the company’s age-related pricing system and when you buy your Medigap plan.
While there are certainly exceptions to the rule, Medigap plans with more benefits will typically cost more than plans offering fewer benefits.
There are nine potential benefits that can be covered by the 10 standardized Medicare Supplement Insurance plans sold in most states (Massachusetts, Minnesota, and Wisconsin have different standards). Each type of plan offers partial or full coverage for a different combination of these benefits.
You can use the chart below to compare the benefits offered by each type of standardized Medigap plan.
* Plan F and Plan C are not available to Medicare beneficiaries who became eligible for Medicare on or after January 1, 2020. If you became eligible for Medicare before 2020,... you may still be able to enroll in Plan F or Plan C as long as they are available in your area.
1 Plans F and G offer high-deductible plans that each have an annual deductible of $2,370 in 2021. Once the annual deductible is met, the plan pays 100% of covered services for the rest of the year. The high-deductible Plan F is not available to new beneficiaries who became eligible for Medicare on or after January 1, 2020.
2 Plan K has an out-of-pocket yearly limit of $6,220 in 2021. After you pay the out-of-pocket yearly limit and yearly Part B deductible, it pays 100% of covered services for the rest of the calendar year.
3 Plan L has an out-of-pocket yearly limit of $3,110 in 2021. After you pay the out-of-pocket yearly limit and yearly Part B deductible, it pays 100% of covered services for the rest of the calendar year.
4 Plan N pays 100% of the Part B coinsurance, except for a copayment of up to $20 for some office visits and up to $50 copayment for emergency room visits that don’t result in an inpatient admission.+ Read more
Medicare Supplement Insurance companies
Medicare Supplement Insurance plans are sold by private insurance companies who are free to set their own prices.
Medigap Plan C sold by one carrier might cost slightly more or less than Plan C sold by another carrier, though the two plans offer the same benefits.
Where you live plays a part in determining the price of Medicare Supplement Insurance plans available to you. In the same way that a gallon of milk might cost more in one city than another, so too can a Medigap plan.
In fact, the average cost of Medigap Plan F in New York was $334.92 per month in 2018. The average cost for Medigap Plan F in Iowa was $141.04 per month in 2018.1
Medigap pricing models
There are three different age-related pricing models that Medicare Supplement Insurance companies use to determine their Medigap plan rates. Each type of cost model can affect the average price of a given plan.
Community-rated With community-rated Medigap plans, every member of the plan pays the same rate, regardless of age.
For example, an 82-year-old who enrolls in a community-rated Plan G will pay the same Medigap premiums as a 68-year-old beneficiary who has the same Plan G in the same market.
Issue-age-rated With issue-age-rated Medigap plans, premiums are based on your age at the time you enrolled in the plan.
You will typically pay less for an issue-age-rated plan if you enroll in the plan when you’re younger. Your premiums also won’t increase based on your age.
Medigap premiums can increase over time due to inflation and other factors, regardless of the pricing model your insurance company uses.
Underwriting and Medigap guaranteed issue rights
Depending on when you sign up for a Medicare Supplement Insurance plan, you may be subject to medical underwriting.
Underwriting is the process by which an insurance company assesses your current health and your health history to determine your Medigap plan costs. If you are in poor health, the insurance company may deem you to be a higher risk, and they may charge you more for your Medigap plan. If your health history is too high risk for the insurance company, they may choose to deny you coverage.
Your Medigap Open Enrollment Period is a six-month period that begins when you are at least 65 and enrolled in Medicare Part B. If you enroll in a Medigap plan after your Medigap Open Enrollment Period, insurance companies reserve the right to utilize medical underwriting to determine your plan premium or if they will offer you coverage at all.
The ability to enroll in a Medigap plan without medical underwriting is called a Medigap guaranteed issue right. In addition to your Medigap OEP, there are several Medigap guaranteed issue rights that allow you to sign up for a Medigap plan without medical underwriting.
Some Medigap insurance companies may offer discounts to women, non-smokers, married couples and for other reasons.
Be sure to ask a licensed insurance agent about any possible discounts that may be available for Medigap plans available near you.
Depending on the average cost of Medicare Supplement Insurance plans in your area, you may wonder if the benefits are worth the premium costs.
When deciding whether or not to enroll in a Medigap plan, consider some of the potential costs that you may face without the protection of a Medigap plan.
Medicare Part A coinsurance for inpatient hospital stays can reach $352per day on the 61st day of your stay, and $704 per day beyond day 90 in 2020.
Even though it’s unlikely to encounter Part A coinsurance because it’s associated with lengthy hospital stays, just a single days-worth of Part A coinsurance payments would cost more than the average Medicare Supplement Insurance plan cost per month.
Each type of Medigap plan covers Medicare Part A coinsurance and hospital costs.
Medicare Part B typically requires a 20 percent coinsurance for medical services and items you receive after you meet your Part B deductible (which is $198 per year in 2020).
The 20 percent coinsurance payment required for a single $760 medical bill would equal the average monthly cost of a Medicare Supplement Insurance plan in 2018 ($152).
Each type of Medigap plan provides at least partial coverage for Part B coinsurance/copayments, and two Medigap plans (Plan C and Plan F) also cover the Part B deductible.
The Medicare Part A deductible is $1,408 per benefit period in 2020. You could possibly encounter multiple benefit periods within the same calendar year. A single Part A benefit period deductible is nearly equal to the average annual cost of a Medicare Supplement Insurance plan ($1,824).
Each type of Medigap plan except for Plan A provides at least partial coverage for the Medicare Part A deductible.
The cost of emergency care received in a foreign country can be highly unpredictable. Original Medicare does not typically cover medical care you receive abroad.
Six types of Medigap plans provide coverage for 80 percent of the costs for qualified foreign emergency medical care.
Health care costs can be unpredictable and unexpected. Having a Medicare Supplement Insurance plan can make your health care spending more predictable, which can help you better budget for your care.
Can I buy a Medicare Supplement Insurance plan at any time?
You can enroll in a Medigap plan or change Medigap plans at any time of the year. However, you may be subject to medical underwriting as part of the application process.
The best time to buy a Medigap plan, however, is during your Medigap Open Enrollment period or during another time when you have a Medigap guaranteed issue right. This can help protect you from potentially paying higher Medicare Supplement Insurance costs due to your health.
Read additional medicare costs guides to learn more about Medicare costs and how they will affect you.
Compare your Medicare Supplement Insurance plan options
A licensed insurance agent can help you compare the average cost of Medicare Supplement Insurance plans in your area and find a plan that works for you.
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