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Medicare, for all its excellent benefits, sometimes isn’t enough. Times have changed since the dawn of Medicare, and healthcare expenses have skyrocketed in every way imaginable.
If you are on Medicare and you don’t have a gap policy, you’re likely underinsured. And in difficult times like these, you want all the medical coverage you can get.
Are you trying to learn more about the average cost of Medicare supplement plans? If yes, you should check out our guide right here.
What Does a Supplement Plan Cover?
A Medicare supplement plan, also known as Medigap, will cover costs that the Original Medicare Parts A and B often leave out. The expenses a Medigap plan covers are not trivial.
Supplement plans can cover significant—and sometimes unanticipated—medical expenses, such as coinsurance, copayments, and deductibles.
The following information comes from the Medicare.gov website. For questions, information, and updates regarding Medicare and its supplement plans, please refer to the official website.
After you’ve paid your deductible, which is around $1,400 for Medicare Plan A, you still have to cover copayments for vital health care services like hospital visits and diagnostic tests. Copayments can get costly, especially if you are in a medical situation that requires regular, timely visits.
Coinsurance is similar to copayments in that it’s a shared cost, meaning it’s the cost you generally have to pay out of pocket as a Medicare recipient. With a Medicare Part A plan (a “hospital” plan), you don’t have to pay coinsurance for the first sixty days of a hospital stay.
But after that sixty days, watch out! The coinsurance rate can skyrocket to the tune of over $300 per day. It’s conceivable for someone to rack up the first sixty days in just a few visits. This is just one scenario where a supplement plan can be a real lifesaver.
The deductibles for the Original Medicare Plans A and B are standardized—around $1400 for Plan A and $200 for plan B. Most supplement plans will pay for themselves based on the Medicare deductibles alone.
Additionally, some Medicare supplement plans cover expenses such as blood. All Medigap plans cover anywhere from 50%-100% of the first three pints.
Another perk if you purchase specific Medigap policies? Over half of the supplement plans cover emergency medical care when traveling abroad.
Medicap Cost Factors
You can’t sign up for a supplement plan without already having Medicare. Despite being connected at the hip to one of the most popular government social safety net programs in history, there’s one thing you should know.
Only private insurers offer Medicare supplement plans.
A little research will show you just how standardized the costs are for Medicare. With the supplemental plans, not so much.
Medicare supplement prices are all over the place, and this is the first thing you should understand when shopping around. So how much do Medicare supplement plans cost? The answer depends on several factors:
1) The Amount of Coverage
How much coverage you choose is the single most significant factor affecting the rate of your gap coverage.
There are ten different Medicare gap plans (plans A, B, C, D, F, G, K, L, M, and N), each offering varying degrees of coverage. While there are some standard expenses that the government requires each plan to offer, there are areas where you can beef up your coverage.
For example, each Medicare supplemental plan covers:
- Coinsurance for Medicare Parts A and B
- Part A Hospice Coinsurance or Copayment
- Medicare Part A Deductible
However, not all plans cover Medicare Part B deductible, coinsurance for skilled nursing facilities, or travel abroad medical expenses.
What all of this means is that you can purchase multiple plans to get the broadest coverage possible. This has the most significant impact on the cost of your supplement plan.
Much of the insurance cost for a supplement plan depends on the insurance provider you choose. Most people will shop around for Medicare supplement plans like they would any other type of insurance. Who you purchase your supplement plan from is the second biggest factor that affects cost.
3) Other Factors
From here, much of the remaining cost comes from risk factors, like age, gender, and whether you are a smoker. The way each insurance company rates these factors may translate to different monthly premium costs.
Geography is another factor that can affect how much you pay for your supplement plan. Rates often pair up with the average cost of living in an area; the higher the cost of living, the higher your supplement premium rate.
The Average Cost of Medicare Supplement Plans
Now, without further ado, the answer you’ve been waiting for. Medicare supplement prices, as we know, can vary. Since Medigap Plan F tends to carry the most coverage of any individual supplement plan, it tends to be the most popular.
As a result, Plan F is an excellent plan to use for calculating averages. Here is a sample of the average monthly cost you can expect based on a few different scenarios.
Plan F in Florida
A 65-year-old female in Palm Harbor can expect to pay around $195 a month, compared to $206 for a male of the same age. For a woman aged 75, that monthly price goes up to $240, and $276 for a male aged 75.
Plan F in New York
In New York City, all of the same demographics as listed above can expect to pay a similar rate of just over $300 per month. Notice the higher rate thanks to living in New York!
Plan F in Texas
In Austin, a 65-year-old woman will pay an average of $120 per month, while her age-peered male will pay just under $140. A woman aged 75 will pay about $148, while a male of the same age will pay $170.
The average of these monthly costs comes out to around $226.
No Single Average
As you can see, there are so many factors to consider when figuring the average cost of Medicare supplement plans. However, if you aim for the mid-$200 range, you will be in the ballpark.
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