There is no such thing as perfect insurance. When unexpected health concerns arise, even the best insurance plans may not be enough to cover all the costs. For individuals with Medicare, knowing what Medicare supplemental insurance options are available can be extremely helpful. But what is the average cost of supplemental insurance for Medicare?
Medicare supplemental insurance (also known as Medigap) refers to extra insurance that can be added to your regular medical coverage plan. Users can purchase Medigap through a private insurance company, helping them pay out-of-pocket costs. Medigap plans aren’t like normal insurance plans. Their purpose is to cover the costs that you may be responsible for your Original Medicare plan.
This article will focus on what supplemental insurance is and why you need it. It will also answer questions like, what is the average cost of a Medicare supplement? And, what is the average cost of medicare part B supplemental insurance?
What is Supplemental Insurance for Medicare, and Why Do You Need It?
Before answering the question, “What is the average cost of supplemental insurance for Medicare?” it's helpful to understand the value of supplemental coverage. If you are wondering if you are eligible for Medicare and Medicare supplemental coverage, explore this article.
The main purpose of supplemental medical coverage is to assist Original Medicare by filling in the gaps. Essentially, it is meant to pay for health care supplies and services that Medicare does not. These costs include coinsurance, deductibles, and copayments. Other out-of-pocket costs that may be covered by a Medigap plan include at least half of the Medicare Part B coinsurance. This is 20 percent of the Medicare-approved amount for covered services.
Important Things About Supplemental Insurance For Medicare
Before enrolling in a Medicare supplement plan, it is helpful to educate yourself about the details. Here are some facts you should know before enrolling.
You are only eligible if you have Medicare Part A and B
You must be able to pay a monthly premium for Medigap as well as the monthly premium for Medicare Part B
Medigap is different from a Medicare Advantage Plan. A Medicare Advantage Plan has its own unique Medicare Benefits. Meanwhile, Medigap only works to supplement Original Medicare benefits
You must buy a Medigap plan from the state you live in but maybe portable when you move
Medigap is not a family plan. Each person in your family must individually buy separate policies
As long as you pay your premium monthly, your Medigap policy will not be canceled. It is guaranteed to be renewable even if your health gets worse
How much is the average Medicare supplement cost? Unfortunately, there isn’t a clear answer to that question. Costs vary between different insurance companies and prices tend to rise as you get older. This means the average cost of supplemental Medicare insurance tends to be cheaper when you are younger
You are only allowed to have a Medigap policy with Original Medicare. It is illegal to have Medigap alongside a Medicare Advantage Plan
If you buy a Medicare drug plan and Medigap from the same company, you may have to pay two separate premiums. Be sure to speak with an insurance representative before doing this
Understanding the Average Cost of Supplemental Insurance for Medicare
How much is the average Medicare Supplement cost? Typical Medicare supplement costs can vary based on multiple factors. The average cost of supplemental Medicare insurance is impacted by the specific insurance company, a person's age, health status, and more.
The typical Medicare supplement cost on average in the United States is around $150 per month with premiums averaging between $50 and $450. This is essentially the average cost of Medicare Part B supplemental insurance. Part A tends to be free (but not always).
For those that have Medicare Plan G, the average cost of supplemental coverage is $135.17 per month. Additionally, Plan G has 27% of the market, making it the most popular choice for those who are newly eligible for Medicare
People with Medicare Supplement Plan F pay around $185.42 per month. Plan F is only available to those who qualified for Medicare before 2020. However, because of its comprehensive benefits, about 46% of Medicare Supplement insurance enrollees have chosen this plan.
If you’d like to compare the costs of different plans, you can explore this online. Unfortunately, answering the question, “What is the average cost of a Medicare supplement?” isn’t as easy as it sounds. When considering Medicare Supplement plans A through N, the cost can vary between $50 and $500 per month.
6 Factors that Affect the Average Cost of Supplemental Insurance for Medicare
Age, health status, location, and specific insurance companies all play a role in typical Medicare supplement costs. Here are 6 factors that affect the average cost of supplemental insurance for Medicare. Consider these factors when comparing plans.
Monthly Premiums
Insurance companies can differ in their approach to monthly premiums. Some insurers use community-rated pricing. This means that premiums cost the same no matter a person’s age. An attained-age pricing strategy links your monthly premium to your age, making premiums cost more as you get older. The issue-age approach sets the price based on when you purchase and how old you are when you first buy it.
Coinsurance and Copays
Not all insurers are the same when it comes to coinsurance and copays. Some policies don’t cover them at all, leaving you to pay a chunk of the costs.
Deductibles
Your Medigap plan must cover Medicare Part A and/or Part B. Otherwise, you will be liable for all out-of-pocket costs. That’s why Part A and Part B are necessary when considering Medigap.
Out-of-Pocket Costs
Essentially, Medigap is married to your Original Medicare plan. That means that it will only pay for services that are connected to Medicare. Therefore, Medigap will not cover vision, hearing, dental services, and prescription drugs. You will need to enroll in a Medicare Part D plan to support drug costs.
Out-of-Pocket Limit
Not all plans have a maximum out-of-pocket limit. Plans L ($3,310) and Plan K ($6,620) do.
Medigap Discounts
When considering supplemental coverage, research which insurers offer discounts that can lower your costs. Some insurers will offer discounts if several people within your household use the same plan. You could also get a discount for signing up for automatic payments or enrolling online.
If you are unsure if you are eligible for Medicare or Medigap, explore our website today.
How to Save Money on Medicare Supplemental Insurance
Now that we have an answer to the question, “What is the average cost of a Medicare supplement?” it's time to learn the best ways to save money. Comparing plans and seeking help from a licensed insurance agent can optimize your Medicare and Medigap plans.
Use the Discounts for Households
Medigap insurers offer financial incentives to family members that decide to purchase the same plan. Individuals can save up to 5%, which makes a significant impact over time. Connect with a licensed agent or broker to get a comprehensive explanation of each plan and what they offer.
Plan G
Using plan G can be of great financial benefit. Plan G can ultimately save you money because you are only responsible for the Part B annual deductible.
Research for Less Popular Companies
The insurer you choose has a huge impact on how much you pay. It may seem smart to choose the bigger name companies, but that may not always be the wisest choice. Taking time to explore other options may lead you to more affordable options. For advice and inside information about how to save money on your plan, explore our website today.
Consider a High Deductible Plan
The advantage of many high deductible plans is that they have lower premiums, such as high deductible Plan G. This plan pays its share first, then after you hit the deductible, they pay the rest for the remainder of the year. This could end up saving you hundreds of dollars each year.
Free Annual Physical Exams
With Medicare, you get one free annual physical. This is a smart way to save money and get the services you need. Also, Medicare pays for preventive services such as bone mass measurements, vaccines, and more.
Understand the Differences in Medigap Depending on the State
Research which states have cheaper Medigap plans. It’s common for older people to settle in warmer places during the winter and then head back north for the summer. Therefore, consider getting a plan in the state that offers cheaper coverage.
Review Your Medigap Plan Every Price Increase
When it comes to Medigap, you can change your plan each year. At the end of the year, reassess your plan. Did prices increase? And does your plan still feel worth the price? If not, explore other options. However, you may be denied by another carrier depending on your health.
Work With an Insurance Agent That Checks on You Annually
Finding the right health insurance plans for you can be difficult. Most people don’t understand the fine print and find themselves stuck with massive unexpected medical bills. That’s why it’s crucial to find an insurance agent that can guide you through the process. Insurance agents not only help you find the insurance that’s best for you, but they also check on you regularly with updates and insightful information. Having someone on your side to guide you through the ever-changing health insurance landscape can be a huge benefit.
If you need help enrolling in Medicare or a Medicare supplement plan in the state of North Carolina, Health Plans of NC can help. Explore our website today.
FAQs about Supplement Insurance for Medicare
How much should a Medicare Supplement cost?
Typical Medicare supplement cost varies by state, a person's age, health status, and more. On average, it may cost $50 to $500 per month.
Is there a Medicare Supplement that covers everything?
Medicare Supplement Insurance Plan F offers the most coverage.
What is the best secondary insurance if you have Medicare?
The best secondary insurance will depend on your specific needs and financial situation.
What state has the cheapest Medicare Supplement plans?
Hawaii has the cheapest Medigap plans.
What is the Average Cost of Supplemental Insurance for Medicare?
Supplemental insurance can help to fill in the gaps when combined with Medicare. It is designed to help with deductibles, copays, coinsurance, and out-of-pocket costs. The average cost of supplemental insurance may vary based on different factors. And Medigap usually costs anywhere from $50 to $500 per month.
If you need help selecting a supplemental insurance plan that fits your needs, talk to one of our qualified health insurance agents today.