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Medigap Costs in 2021

There are a few things that you should keep in mind when considering enrolling in a Medigap policy to supplement your Original Medicare coverage. Of course, you will be responsible for paying your Medigap monthly premium, but there are additional Medigap costs you will have to cover each month. 

Medigap insurance enrollees must also pay their Medicare Part A (if applicable) and Part B premiums on top of their Medigap policy premium. Plus, if you choose to enroll in a Medicare Part D drug plan to help with the costs of your prescription drug, you will have to pay that premium as well. 

How high your Medigap plan costs end up being will depend on a variety of factors, and each person’s unique situation impacts the rate that his or her monthly premium will be set at.

What determines the cost of your Medicare Supplement monthly premium?

Monthly premiums are one of the most significant Medigap costs. Each Medicare Supplemental Insurance plan’s monthly price varies depending on how many benefits it offers. However, there are a number of other factors that can impact what your Medigap policy premium is set at. 

Medigap premiums can be based on your age, your gender, where you live, your tobacco use, and the insurance company that you purchase your Medigap policy through. In certain situations, your health can also play a role. How you choose to pay your premium can even impact how much you end up paying a month for your Medigap plan. 

Medigap premium rates are not federally regulated, so insurance companies can choose how they want to set the monthly premiums for their Medigap policies. There are three types of ways that Medigap insurers can price their plans’ premiums:  

  • Attained-Age-Rated: These premiums depend on your current age and will likely increase as you get older.
  • Issue-Age-Rated: These premiums depend on what your age was when you enrolled in your Medigap plan.
  • Community-Rated: These premiums are typically the same for everyone in an area, regardless of age.

Just be aware that Medigap insurance companies have the right to adjust premium rates to inflation, so regardless of what type of pricing your insurance company uses, insurers will still find a way to increase your monthly premium year after year. 

Because Medigap premiums rely on so many factors, location perhaps being the most significant, it is hard to give a number for what an average Medigap premium costs. For example, a Plan N monthly premium for a 65-year-old female in Austin, TX could be as low as $69. In California, a Plan N for the same person can cost around $111.

Therefore, we suggest contacting an experienced agent like one of our team member’s here at Medicare Plans Direct to get a better idea of the potential Medigap costs associated with any given policy.


Cost-Sharing Plans

Medigap insurance companies can offer three cost-sharing Medicare Supplement plans: Plan K, Plan L, and Plan M. With these plans, certain health care benefits are only partially covered by your Medigap plan. This implies that you will be responsible for picking up the remaining costs. 

However, if you have, for example, Plan C, F, G, or N, you do not have to worry about any cost-sharing. Plus, these Medigap plans’ premiums don’t tend to be too much higher than those of cost-sharing plans. Just something to keep in mind.

Out-of-Pocket Limits

Plan K and Plan L both have out-of-pocket maximums (MOOP), or out-of-pocket limits. This puts a cap on how much spending you can do while covered by one of these Medicare Supplemental Insurance plans. Once you reach the plan’s limit, your Medigap policy will cover the Medicare expenses that you incur over the remainder of the year. 

The MOOP for Plan K is set at $6,220 for 2021, and Plan L has a limit of $3,110. 

Because not all of your health insurance benefits are fully covered with these two plans, the out-of-pocket limits can help to control your Medicare spending. This is especially helpful should you fall especially ill, have a severe accident, or require extensive hospitalization.

High-Deductible Plans

Plan F and Plan G are the two Medigap policies that offer high-deductible versions. This means you can pay a lower monthly premium while receiving the extensive coverage options that these two plans offer. 

In 2021, the annual deductibles for both High Deductible Plan F and High Deductible Plan G have been set at $2,370. While high-deductible plans do lower your monthly costs, the policy’s benefits won’t fully come into effect until you reach your deductible. 

However, before letting yourself be enticed by the low monthly premiums offered by high-deductible plans, it is best to explore all of your options.

Which Medigap plan offers the greatest value?

The Medigap plan that offers you the most coverage at an ideal price varies from person to person. There are, however, certain plans that are more popular among beneficiaries thanks to the fact that they offer broad coverage at an affordable price. 

One of the most popular Medigap plans is Plan N. It offers almost all of the benefits that a Medicare Supplement can offer, only leaving out the Part B deductible (which is set at $203 in 2021) and Part B excess charges. 

If you have Plan N, you will probably have to pay a small copay with doctor’s (up to $20) and emergency room ($50) visits. Nevertheless, its ample coverage and reasonable premium make it an excellent and affordable option for many Medicare beneficiaries. 

Another plan that comes at a great value is Plan G. It includes every benefit that a Medigap plan can cover except for your Part B deductible. With Plan G, the vast majority of your health care expenses, including coinsurance, copayments, deductibles, and foreign travel emergency expenses, are taken care of.

While there are certainly some Medigap policies that offer better value than others, choosing the right one for you is a process that is best done with the advice of an expert. Contact us today to speak with an experienced insurance agent at no cost to you.

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