How Much Does Supplemental Insurance for Medicare Cost on Average?

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Medicare is the federal health insurance program that covers some medical expenses for people age 65 or older and younger people with disabilities. Yet, the program doesn’t cover all medical costs of most long-term care.

Medicare has four main federal components that offer healthcare benefits to retired people or people with disabilities, including Part A, B, C, and D. What’s more, the program also has the Medicare Supplement option, which is private insurance, meant to help with covering out-of-pocket costs such as copays, coinsurance, and deductibles.

Now, if you’re enrolled in Medicare, or you’ve just found out that you’ll soon be eligible for the program, you may be considering buying a Medicare Supplement Insurance plan as well to help cover your major healthcare costs alongside your Part A and B coverage.

Naturally, you want to find out more about Medicare Supplement insurance and how much you should expect to pay for it. Keep reading below to find out more!

Medicare supplement plan explained

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First things first, before we dig deeper into the costs associated with the Medicare Supplement plan, let’s make sure we’re on the same page with what this plan is.

Medicare Supplement Insurance, commonly known as Medigap, can be bought from private insurance companies to complement your Medicare policies. Simply put, the Medicare Supplement insurance plan covers your healthcare costs that are not covered by other policies included in Medicare.

Now, an essential thing to know about Medigap coverage is the fact that it is only available for people who already take part in Medicare Parts A and B. That’s because, as mentioned above, Medigap plans are designed to supplement Parts A and B, not replace them. So, note that you need to pay the private insurance company a monthly premium for a Medicare Supplement plan in addition to the monthly premiums you pay for Medicare Part A and B.

One more thing to know about getting a Medicare Supplement is that you can buy it from any insurance company that is licensed in your state to sell such policies. What’s more, a private Medigap insurance provider can not refuse to renew your Medicare Supplement insurance plan even if you have health problems. So, as long as you pay your monthly premium, the insurance company can’t cancel your Medigap policy.

Why should you get Medicare supplement insurance?

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Medicare supplement insurance plans bring plenty of benefits to people aged 65 or those with disabilities. And, it all comes down to efficiently tackling increasing healthcare costs. So, if you’re wondering whether or not Medicare Supplement Plans are worth it, find out that the answer is, “Absolutely!”

Here’s the deal: Healthcare costs in the US have been increasing over the last decade and are expected to keep on rising, leaving seniors or people struggling with specific disabilities with immense financial struggles when it comes to paying for their medical needs. Why are healthcare costs rising? Experts often name the exact five causes:

  • A growing population
  • Aging seniors
  • Disease prevalence or incidence
  • Medical-service utilization
  • Service price and intensity

Now, with this in mind, it may make more sense to you to invest in a Medigap to be prepared financially for healthcare costs that can quickly add up and become overwhelming, especially if you have an emergency.

So, as noted above, Medicare isn’t a blanket insurance policy, and it has some holes in it in terms of covered medical costs. While the Original Medicare pays for most medical expenses, you’ll start noticing its holes in case you may become seriously ill or get injured. So, you could say that Original Medicare only pays for about 80% of your medical costs. If you can’t afford to pay the rest 20% out of your pocket, this is where Medigap steps in to cover these holes. Simply put, Medigap offers more complete coverage.

How much does Medigap policy cost on average?

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Now, let’s get to the main question that probably everybody interested in getting Medigap has on their minds, “what is the average cost of supplemental insurance from MedicareWire?”. The average Medicare Supplement policy premium cost $154.50 per month in 2020.

But, there’s no easy answer on how much you should expect to pay on the monthly premium on your Medicare Supplement plan. That’s because there are a few factors that can affect premiums, including:

  • How much cover you want with your plan.
  • The insurance company you buy from.
  • Your location.
  • Your age.

Let’s explore these four factors more and see how they influence Medigap insurance plan costs:

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Coverage

In most states across the US, there are ten standardized Medicare Supplement plans. These plans are identified by the letters A, B, C, D, F, G, K, L, M, and N.

Now, plan A and B, for example, don’t cover the exact same things that plans F and G cover. Yet, no matter the state or insurance company you buy from, all policies with the same letter offer the same health benefits.

So, when you go shopping for Medicare Supplement plans, expect plans that cover more medical costs also to cost you more.

Insurance company

The insurance company you purchase your Medigap insurance policy from will also determine how much you pay for your monthly premiums. More precisely, insurance companies that have a larger, younger pool of people typically have lower rates for their Medigap policies. We’ll discuss the age-rate relationship more next time.

Location

Where you live also impacts how much you’ll pay for your Medicare Supplement insurance plan. More precisely, if you live in a high cost of living area, expect insurance companies to also charge more for monthly premiums for their Medigap plans.

Age

As mentioned above, the age of the person shopping for a Medigap policy also determines the prices offered by insurance companies. Why? Because with age comes more precarious health conditions, which, for insurance companies, translates into increased risk.

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