How much does a medicare supplement cost

Need help  budgeting  for your new plan, or just wondering how much a Medicare Supplement costs?

Let’s jump right in.

Here’s the three points I’ll be covering:

1.)  First you need to get clear on the type of plan we’re discussing – Medicare Supplements vs Medicare Advantage (They are not the same thing).

2.) What causes variations in price?  (Plus actual examples of pricing for 2016).

3.) Where can YOU go to get an accurate price?

1.) Getting clear on the type of plan we’re actually talking about.

medicare information overload

Medicare Advantage Plans and Medicare Supplements are not the same thing.

Last  year I helped a client that had been on Medicare for a year and had no idea Medicare Supplements existed.

It’s beyond my comprehension how this can even happen.

It’s incumbent upon an agent selling ANY type of plan to make sure the customer understands all options before the enrollment takes place.

It’s like going to a doctor to get a cure and the doctor only mentions half the options available to you.

Medicare Supplements (AKA Medigap)

Medicare Supplements are also known as Medigap plans because they are an add-on gap plan that covers the gaps in Original Medicare.

You typically end up with little to no additional out of pocket costs for medical care, so it only makes sense you’d pay a monthly premium for this.

Medicare Advantage Plans

Medicare Advantage plans are less expensive monthly (commonly zero premium), but  you are signing a contract with a private insurance company to take over your Medicare benefits.

You pay little to no monthly premium in exchange for your freedom.

You must abide by the plan rules, such as sticking to network providers and hospitals, and requiring a referral to see a specialist.

What No One is talking about

The thing no one talks about is that after your first year on a Medicare Advantage Plan, you may never again qualify for a Medicare Supplement (Medigap policy).

If you get very sick down the road and decide you want better coverage and more freedom, you are out of luck because you won’t be able to pass medical underwriting.

Medigap Freedom

I encourage you to consider more than just price when deciding on your healthcare.

2.) What causes variations in price?

Again, Medicare Advantage plans are typically zero premium.

The topic we’re covering in this article is Medicare Supplement pricing.

If you’re interested in finding out more about Medicare Advantage pricing you can use the plan finder on and get specific plan pricing, plus a breakdown of benefits for every plan in your zip code.

How are Medigap plans priced?

Plans are standardized, which means every plan letter has the exact same benefits regardless of the carrier.   A plan G with one carrier has the identical benefits as plan G with another carrier.

[source – Choosing A Medigap Policy]

An insurance company is allowed to charge more than another company for the exact same benefits.

Prices are also determined by:

  • age
  • plan letter
  • zip code
  • sometimes gender
  • sometimes smoker vs. non-smoker

Price increases over time are affected by the “rate type:”

  • community
  •  issue age
  • attained age

The Medigap Plans are lettered A-N.

medigap chart choosing a medigap policy

The most popular plans are F, G, and N.

Plan F is the most expensive.  Plan F is also going away by 2020.  This will leave you in a closed risk pool (people getting sicker with no new healthier enrollees equals a recipe for rising costs).

I recommend plan G, plan N, or high deductible F for those financially savvy and good at saving (you must understand the math and how the high deductible plan F works for it to be a fit).

Plan G is the best value, and best overall fit for most.

Plan N with slightly less benefits, is a good value when you need more savings on your premium.

This might seem obvious, but the more coverage you get, the higher your premium.

Plan F is more expensive than Plan G, Plan G is more expensive than plan N.  

Different pricing according to Zip Code

To get an accurate price, you must get a quote within your zip code.

Community,  Issue  Age, and Attained Age Ratings

Community Rated is also known as “no age-rated.” Everyone is charged the same price regardless of age.  Price increases still occur due to inflation and other factors.

Issue Age means that the pricing is based on the age you are when the policy is issued.  Beyond that, increases are not based on age.  Only inflation and other factors affect price increases.

Attained Age pricing is based on the age you are when you purchase the policy, and increases over time according to your “attained” age.

Looking at Real 2016 Prices: How much does a Medicare Supplement Cost in 2 States (Florida and California)

The two main states I sell in right now are Florida and California, so I’m quoting Tampa FL and San Diego CA.

Tampa FL,  Female age 65 Plan F

Screen Shot 2016-02-26 at 10.57.01 AM

Lets compare that to the opposite coast – California.

San Diego CA, Female age 65 Plan F

Screen Shot 2016-02-26 at 11.01.22 AM

When you look at the above quotes, notice how the plans are labeled community rated, issue age rated, and attained age.

Why the differences?

First, UnitedHealthcare, to the best of my knowledge, is always priced as community rated.

Aside from UnitedHealthcare, most companies in the state of Florida are priced as Issue age.

Again,  issue age means your policy is priced according to the age you are when you buy it, but doesn’t continue to increase based on age (it will increase for due to other factors).

Most companies in the state of California are priced according to attained age.  This means your policy is priced by age when you buy it and continues to adjust the price as you age.

As you can see, the pricing can vary greatly based on where you live.

3.) How can YOU get accurate pricing for your zip code?

First the bad news –  it’s not easy to get instant Medigap plan pricing.

first the bad news

I don’t recommend trying to get an instant online quote from just any website, unless you know for sure that the website belongs to an independent agent, or agency.

Many insurance websites are looking to get your information to sell to lead companies.  The lead companies sell each name and number to 7-10 agents, in real time.  They respond to your request for a quote.

This can be a problem if you weren’t expecting to get bombarded by calls.

I’d recommend requesting a quote via email only or calling the agent or agency directly.

Contact an independent agent directly to get comparison pricing.

find an online medigap quote

Finding a local or online agent and calling direct enables you to bypass the sharing of personal information, and bombardment from many agents.

Independent agents should have access to quoting software that enables them to search all the current pricing of companies by zip code.

This allows you to receive pricing from many different companies.

Any independent agent should help you for free without asking for your personal information.  Date of birth is NOT necessary.  Age and zip code and gender are all that is required to get accurate pricing.  If you are outside of a guaranteed issue period you’ll be asked if you use tobacco.

Contact the insurance companies directly

You can call an insurance company directly, but since there can be as many as 30-40 companies offering plans in each zip code it’s hard to know where to start.

Try your State Department of Insurance

Your State Department of Insurance might have pricing available on their website. This might be a good way to narrow down your choices.

Google the name of your state plus “department of insurance.”  This will direct you to your state’s department of insurance website.

All of the Medicare Supplement companies in your zip code should be listed there.

Typically they will quote the annual premium, so you’ll have to figure out the monthly premium.  It may not be super accurate, but it can give you an idea which companies are on the lower end of the spectrum, then you may call the companies direct to get more accurate quotes.

If you are already aware of some of the companies in your area, and know which ones you are considering,  call the carrier directly for a quote,  or complete a quote request on the carrier website.

Direct VS. Agent

Are there benefits of purchasing insurance direct from the carrier?

There is usually not a benefit to purchasing direct from the insurance carrier, as opposed to using an agent (unless you prefer to do everything yourself).

There are a small number of companies that offer Medicare Supplements “direct to consumer” which means an agent cannot sell you this plan.  You may be required to meet certain criteria (military, religious, or a member of an organization).

When carriers offer this type of arrangement you call the company directly and you represent yourself.

The majority of Medicare Supplement Carriers (including all major carriers such as Blue Cross, Aetna, UnitedHealthcare, Mutual of Omaha, etc.) cost the same whether you use an agent or not.

Benefits of Using an Agent

An independent insurance agent’s services are always free.

You should be able to find an agent that offers unbiased help, and educates you on your choices.

This can be invaluable for someone that is confused or just doesn’t know where to begin.

If an agent is pressuring you, move on.

A good insurance agent will always be available for questions, will offer to shop the rates for you each year, and will inform you of important changes to Medicare.

In Conclusion:

  1. Medicare Supplements and Medicare Advantage Plans are not the same thing.  This article only discussed Medicare Supplement pricing.
  2. Medicare Supplements have the most freedom and will cost you a monthly premium.
  3. Pricing varies by age & zip code.
  4. Price increases over time are affected by the rate type: Community, Issue Age or Attained Age Rated
  5. Companies are allowed to charge different prices for the exact same plan letter.
  6. The lowest cost Plan F for a 65 year old female was quoted in two cities: San Diego, CA $135/Tampa, FL $184
  7. Although it’s not easy to find Medicare Supplement pricing online, you can contact an agent or an insurance company directly to request a quote.
  8. Your State’s department of insurance website may offer Medicare Supplement pricing.
  9. It does not cost anything to use an agent. The premiums are identical whether you use an agent or purchase direct from the carrier.

Have you been able to find Medicare Supplement pricing online?  What have your experiences been?  We’d love to hear your feedback in the comments below.