Medigap Plans Cost: What to Expect & How to Save

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If you’ve started shopping for a Medigap plan, you’ve probably noticed something strange. You might see a Plan G from one company priced at $130 a month, while another company offers the exact same Plan G for $190. It’s the same coverage, mandated by the government to be identical, so why the huge difference in price? This is the most common point of confusion, and it’s a valid one. The truth is that while the benefits are standardized, the prices are not. Understanding what factors influence how Medigap plans cost is the key to not overpaying. This guide will break down exactly what goes into that monthly premium so you can find the right plan at the best price.

Key Takeaways

Focus on Price, Not Benefits, When Comparing Companies: Medigap plans are standardized, meaning a Plan G from one insurer is identical to a Plan G from another. This lets you compare companies based on what truly differs: the monthly premium and their history of rate increases.
Your Initial Enrollment Window Is Your Golden Ticket: The six-month Medigap Open Enrollment Period when you first get Part B is your best chance to buy any plan without answering health questions. Missing this window can lead to higher costs or even being denied coverage.
Look Beyond the Base Premium to Find True Value: The lowest initial quote isn’t always the best deal long-term. To lower your costs, ask about household discounts, consider a plan with some cost-sharing like Plan N, and work with an independent agent to compare rate histories.

What Is a Medigap Plan?

Think of a Medigap plan, also known as a Medicare Supplement plan, as a helper for your Original Medicare (Part A and Part B). While Original Medicare covers a lot of your healthcare costs, it doesn’t cover everything. You’re still responsible for things like deductibles, copayments, and coinsurance, which can add up quickly. That’s where Medigap comes in. These plans are sold by private insurance companies and are designed to help pay for those out-of-pocket costs, filling in the financial “gaps” left by Original Medicare.

It’s important to know that Medigap is different from a Medicare Advantage plan. A Medigap policy only supplements your Original Medicare benefits; it doesn’t replace them. You must be enrolled in Medicare Part A and Part B to buy a Medigap plan. With a Medigap plan, you’ll continue to pay your monthly Part B premium to the government, plus a separate monthly premium to the private insurance company for your Medigap policy. Essentially, you keep your Original Medicare and add a Medigap plan to get more predictable healthcare costs. This can provide peace of mind, knowing you have a safety net in place for unexpected medical expenses and can budget more effectively for your healthcare.

How Medigap Works with Original Medicare

When you have Original Medicare and a Medigap plan, they work together seamlessly. First, Medicare pays its share of the approved amount for your covered healthcare costs. Then, your Medigap policy steps in and pays its share. For example, Medigap plans can help pay for things like your Part A hospital deductible or the 20% coinsurance for doctor visits that Part B doesn’t cover. This partnership means you can see any doctor or visit any hospital in the U.S. that accepts Medicare. You don’t have to worry about network restrictions, which is a common feature of many other types of health plans. The primary purpose of a Medigap plan is to cover the out-of-pocket costs associated with services that Original Medicare provides, making your healthcare budget much more predictable.

Why Plan G Is the Same, No Matter the Company

One of the most helpful things to understand about Medigap is that the plans are standardized. This means that all plans with the same letter offer the exact same basic benefits, regardless of which insurance company sells them. For instance, a Medigap Plan G from Company X provides the same coverage as a Plan G from Company Y. This standardization is mandated by the federal government, which makes comparing plans much simpler. Because the Medigap benefits are identical for each plan letter, the main differences you’ll find between companies are cost and customer service. This is why it’s so important to compare prices. You could pay significantly more for the exact same Plan G coverage from one insurer compared to another. Your focus should be on finding a reputable company that offers the plan you need at the most competitive price.

What Determines the Price of a Medigap Plan?

One of the most common questions we hear is, “If a Plan G from one company has the exact same benefits as a Plan G from another, why are the prices so different?” It’s a great question, and the answer is that while the government standardizes the coverage of each Medigap plan, it doesn’t regulate the price. Insurance companies are free to set their own premiums, which is why you could see two identical plans with prices that are hundreds of dollars apart over the course of a year.

Understanding what goes into these calculations is the first step to finding the right plan at the best possible price. Several key factors come into play. Your age and when you enroll are critical; signing up during your initial enrollment window often secures you a lower rate. Where you live also plays a huge role, as local healthcare costs and market competition can cause premiums to vary significantly from one zip code to the next. And, of course, the insurance company itself is the biggest variable. Each one has its own pricing model and history of rate increases. Finally, your health status and whether you use tobacco can impact your costs, especially if you apply outside of a protected enrollment period. We’ll break down each of these factors so you can see how they work together to determine your final premium.

Your Age and When You Enroll

Your age is a significant factor in what you’ll pay for a Medigap plan. Generally, the younger you are when you first enroll, the lower your premium will be. This is why your six-month Medigap Open Enrollment Period, which starts the month you’re 65 or older and enrolled in Medicare Part B, is so important. It’s your one-time opportunity to buy any Medigap policy sold in your state at the best available rate for your age, regardless of your health. Waiting to enroll can mean facing higher starting premiums.

Where You Live

Just like the cost of housing, Medigap prices can vary dramatically depending on your zip code. Premiums are not set on a national level; they differ from state to state and even between counties. This is because local competition among insurance companies and the underlying cost of healthcare services in your area directly impact pricing. A Medigap plan in a major metropolitan area like New York City will likely have a different premium than the same exact plan in a rural part of Ohio. This is a key reason why it’s so helpful to compare costs specific to your location.

How Insurance Companies Set Prices

This is the biggest variable of all. Each insurance company decides for itself how much to charge for the same standardized plan. One company might price its Plan G at $130 per month, while a competitor across the street offers the identical plan for $180 per month. They also use different methods to set prices over time. Some may offer a lower premium to start but have larger increases each year as you age, while others might have a more stable, predictable rate history. This is why simply picking the cheapest plan today without looking at the company’s history of rate increases can be a costly mistake.

Your Health and Tobacco Use

If you apply for Medigap during your Open Enrollment Period, insurance companies cannot use your health history against you. They can’t ask you medical questions, charge you more for pre-existing conditions, or deny you coverage. This is a powerful protection. However, if you apply outside of this protected window and don’t have a guaranteed issue right, companies can and will put you through medical underwriting. They will review your health history, and if you have certain conditions, they can charge you a higher premium or deny your application altogether. Using tobacco will also almost always result in a higher monthly premium.

How Much Should You Expect to Pay for Medigap?

Asking about the cost of a Medigap plan is a lot like asking about the cost of a car—the answer is always, “it depends.” While that might not be the straightforward number you were hoping for, understanding what it depends on is the key to finding a plan that fits your budget. The monthly premium you pay is influenced by a handful of key factors, from the plan you select to the company that offers it. Let’s look at some average costs and explore why two people can pay very different prices for the exact same coverage.

A Look at Average Monthly Premiums

Generally, you can expect Medigap monthly premiums to fall somewhere between $100 and $300. Some studies show a wider range, from as low as $32 to over $600 per month, which really highlights how much prices can differ based on your circumstances. For a bit of perspective, the average Medigap premium in 2023 was around $217 per month. Remember, these are just ballpark figures. Your actual premium will be specific to you, your location, and the plan you choose.

Why Prices Vary Between Companies

Here’s one of the most important things to understand about Medigap: while the plans are standardized, the prices are not. A Plan G from Company A offers the exact same medical benefits as a Plan G from Company B. However, Company A might charge $150 a month while Company B charges $220. As Medicare itself points out, different insurance companies can set very different prices for identical coverage. This is why shopping around is so critical. The price you’re quoted is based on the specific company, the plan letter you choose, and where you live.

Comparing Medigap Plans: Coverage vs. Cost

Choosing a Medigap plan often comes down to a simple trade-off: would you rather pay more each month for predictable, low costs when you need care, or pay a lower monthly premium and cover more costs yourself when you visit the doctor? There’s no single right answer—it’s about finding the balance that fits your health needs and your budget. Let’s look at how the plans stack up.

The Most Comprehensive Plans: F & G

Think of Plans F and G as the premium options. They offer the most extensive coverage, which is why they typically have higher monthly premiums. In return, you’ll face very few out-of-pocket costs when you receive medical services. This can provide incredible peace of mind, especially if you anticipate needing frequent care. If you became eligible for Medicare before January 1, 2020, you can still purchase Plan F, which covers the Part B deductible. For everyone else, Plan G is the most comprehensive Medigap plan available, offering the same benefits as F except for that one deductible.

The Balanced Options: A, B, & N

If you’re looking for a middle ground, Plans A, B, and N are worth a look. These plans generally come with lower monthly premiums than F or G, but you’ll pay more out-of-pocket when you use your benefits. Plan N is a particularly popular choice that offers a great balance of coverage and cost. Its benefits are very similar to Plan G’s, but with a couple of key differences: you’ll have small copays for some doctor and emergency room visits, and it doesn’t cover Part B excess charges. For many, these trade-offs are well worth the lower monthly premium, making it a balanced option for moderate coverage.

The Cost-Sharing Plans: K, L, & M

For those who are generally healthy and want the lowest possible monthly premium, the cost-sharing plans might be a good fit. With Plans K and L, you pay a percentage of your medical bills—50% for Plan K and 25% for Plan L—until you hit a yearly out-of-pocket limit. Once you reach that limit, the plan covers 100% of your costs for the rest of the year. Plan M is another option that helps lower your premium by having you pay for half of the Medicare Part A deductible. These plans require you to take on more direct financial responsibility for your healthcare, but they provide a strong safety net against catastrophic expenses.

How to Find the Best Medigap Price

Finding the right price for a Medigap plan can feel like searching for a needle in a haystack, but it doesn’t have to be. The key thing to remember is that while Medigap benefits are standardized by the government, the prices are not. This is actually great news for you. It means that once you’ve decided which plan letter fits your needs (like Plan G or Plan N), you can shop for that exact plan among different insurance companies to find the best possible price without sacrificing a single bit of coverage.

A little bit of strategic shopping can save you a significant amount of money, not just this year, but for many years to come. The price difference between two companies for the exact same plan can be surprising. Instead of getting overwhelmed by the options, think of it as an opportunity. By following a few simple steps, you can feel confident that you’re not overpaying for your coverage and have found a plan that fits comfortably within your budget. Let’s walk through how to do it.

Compare Apples to Apples

Think of it this way: a Plan G from Company A offers the exact same medical benefits as a Plan G from Company B. This is because Medigap plans are standardized by the federal government. This rule makes your life so much easier. You don’t have to worry that one company’s Plan G is secretly “better” or has more coverage than another’s. They are identical. This allows you to make a true apples-to-apples comparison, focusing on the two things that do differ: the monthly premium and the insurance company’s customer service and reputation. You can get Medigap costs from different companies knowing the core product is the same.

Look at a Company’s Rate History

The monthly premium you’re quoted today is just the starting point. It’s also important to consider how that premium might change over time. Every insurance company has a history of rate increases, and they aren’t all the same. Some companies are known for having stable, predictable increases year after year, while others might offer a lower introductory rate only to implement steeper hikes down the road. A plan that seems like a bargain now could become expensive in five years. Asking about a company’s rate increase history is a smart move for long-term planning and budget stability.

Get Quotes from Several Insurers

Since the benefits for each lettered plan are identical across companies, the single biggest factor in your decision will likely be the price. And prices can be all over the map. One insurer might charge $130 a month for a Plan G, while another in the same zip code charges $190 for the exact same coverage. This is why you should never settle for the first quote you receive. To make sure you’re getting a competitive price, compare prices from different insurance companies for the same plan. Getting quotes from at least three to five different insurers will give you a clear picture of what you should be paying.

Common Myths About Medigap Costs

When it comes to Medigap, a few common misunderstandings about cost and coverage can cause a lot of confusion. It’s easy to get tripped up by misinformation, which can lead to costly mistakes. Let’s clear the air and tackle some of the biggest myths head-on so you can make decisions with confidence. Understanding the truth about how these plans work is the first step toward finding the right fit for your budget and your health needs.

Myth: “I can’t afford Medigap.”

This is one of the most common concerns I hear, and it’s completely understandable. When you’re managing your finances in retirement, every dollar counts. While Medigap plans have a monthly premium, many people find the cost is manageable and well worth the peace of mind. A predictable monthly premium can protect you from the unpredictable—and often very high—out-of-pocket costs that can come with Original Medicare. There are many different types of Medigap plans, each with a different price point, so you can find one that fits your budget.

Myth: “I can sign up whenever I want.”

This is a dangerous misconception. While you can apply for a Medigap plan at any time, the best time to enroll is during your one-time Medigap Open Enrollment Period. This six-month window starts the month you turn 65 and are enrolled in Medicare Part B. During this period, insurance companies cannot deny you coverage or charge you more based on your health history. If you miss this window, insurers can—and often do—use medical underwriting. This means they can review your health records, charge you a higher premium, or even deny your application altogether. Waiting can seriously limit your options.

Myth: “Medigap covers everything.”

It’s easy to assume a “supplement” plan will cover every medical expense, but that’s not quite how it works. Medigap plans are designed to fill the “gaps” in Original Medicare, helping pay for things like your Part A and Part B deductibles, coinsurance, and copayments. However, they don’t cover everything. Most Medigap policies do not include coverage for long-term care, vision, or dental services. Most importantly, they do not cover prescription drugs. For that, you will need to enroll in a separate Medicare Part D plan. Understanding these limitations helps you build a complete healthcare strategy.

When Is the Best Time to Enroll in Medigap?

Timing is everything when it comes to getting a Medigap plan. Enrolling at the right moment gives you the most options and protects you from being denied coverage or charged higher rates due to your health history. There are two key periods when you have special rights to buy a policy. Missing these windows can make it much more difficult and expensive to get the coverage you need later on. Understanding these enrollment periods is the first step to making a smart, confident decision about your health care.

Your One-Time Medigap Open Enrollment Period

The absolute best time to buy a Medigap plan is during your Medigap Open Enrollment Period. This is a one-time, six-month window that starts on the first day of the month that you’re both 65 or older and enrolled in Medicare Part B. During this protected time, insurance companies can’t use your health history against you. That means they must sell you any Medigap policy they offer, can’t charge you more because of pre-existing conditions, and can’t make you wait for coverage to begin. This is your golden ticket to getting the plan you want at the best possible price. You can find more details on when you can buy Medigap on the official Medicare website.

Understanding Guaranteed Issue Rights

What happens if you miss your Open Enrollment Period? You might have another chance. In certain situations, you have what are called guaranteed issue rights, sometimes called “Medigap protections.” These rights mean an insurance company must sell you a Medigap policy, regardless of your health. These situations are specific, such as losing your employer health coverage or moving out of your current plan’s service area. Outside of your Open Enrollment Period or a guaranteed issue situation, insurers can use medical underwriting. This means they can review your health history and potentially charge you a higher premium or even deny your application. This is why acting during these key windows is so critical.

Smart Ways to Lower Your Medigap Costs

Finding ways to save money on your Medigap plan doesn’t mean you have to settle for less coverage or a subpar insurance company. It’s about being a savvy shopper and knowing where to look for value. With a few smart strategies, you can find a plan that fits your budget without compromising on the financial protection you need. The first step is understanding that while Medigap plans are standardized, their prices are not. A Plan G from one company is identical in coverage to a Plan G from another, but the monthly premium can differ by a significant amount. This is where your power as a consumer comes in. One of the simplest ways to save is by asking about discounts. Many insurance companies offer price breaks for things like being married, not smoking, or paying your premium annually. These Medigap discounts aren’t always advertised, so you have to ask. Another key strategy is choosing the right level of coverage for your specific needs. It can be tempting to buy the most comprehensive plan, but that isn’t always the most cost-effective choice. Think about your health and how often you anticipate needing medical care. A plan with a lower premium and some cost-sharing, like Plan N, might be a better fit than a higher-premium plan if you’re in good health. Finally, partnering with an independent agent is one of the most effective ways to ensure you’re not overpaying. An independent agent can shop the market for you, comparing prices from multiple carriers to find the best deal. They can also provide insight into a company’s rate increase history, which is crucial for long-term savings. Using an agent to purchase a plan will likely save you money and a lot of hassle.

Ask About Available Discounts

One of the simplest ways to save is to ask for discounts. Many insurance companies offer price breaks, but they aren’t always advertised. It’s always worth asking your agent or the insurance company directly about what they offer, as you might be surprised by what’s available. Common discounts include a household discount for married couples or partners living in the same home who both enroll with the same company. You might also find savings for being a non-smoker, setting up automatic payments from your bank account, or paying your entire annual premium at once. These small discounts can add up to significant savings over the year.

Pick the Right Level of Coverage

It can be tempting to buy the most comprehensive plan available, but that isn’t always the most cost-effective choice. The key is to find a balance between your monthly premium and your potential out-of-pocket costs. Plans with higher premiums, like Plan G, typically cover more of your costs when you see a doctor. Plans with lower premiums, like Plan N, require you to pay some copays for doctor visits. Think about your health and how often you anticipate needing medical care. If you’re in good health and don’t visit the doctor often, a plan with some cost-sharing might save you money on premiums. The goal is to choose a plan that aligns with both your health needs and your financial comfort level.

Partner with an Independent Agent

Working with an independent agent is one of the most effective ways to ensure you’re not overpaying. Unlike a “captive” agent who only works for one company, an independent agent represents multiple insurance carriers. This means they can shop the market on your behalf to find the best rate for the exact same standardized plan. Their services are free to you, as they are compensated by the insurance company you choose. An experienced agent can also provide valuable insight into a company’s rate increase history, helping you choose a carrier with stable pricing. They do the heavy lifting of gathering quotes and comparing the fine print, so you can feel confident you’re making a sound financial decision.

Don’t Forget These Other Potential Costs

When you’re budgeting for a Medigap plan, it’s easy to focus solely on that monthly premium. But to get a true sense of your total healthcare spending, you need to look beyond that single number. The premium is just one piece of the puzzle.

Depending on the plan you choose, you might still have some out-of-pocket expenses. On top of that, premiums can change over time, and it’s important to remember what Medigap doesn’t cover. Thinking about these factors now will help you avoid surprises later and ensure you have a plan that truly fits your financial picture for the long haul. Let’s walk through what else you should keep on your radar.

Plan-Specific Deductibles and Copays

While many Medigap plans are designed to cover nearly all of your out-of-pocket costs, some plans require you to share in the cost. This is how they keep their monthly premiums lower. For example, Medigap Plan N is a popular choice because of its budget-friendly premium, but it requires you to pay a small copay of up to $20 for some doctor’s office visits and up to $50 for emergency room visits. Other plans, like the high-deductible versions of Plan G or F, require you to pay a significant annual deductible before the plan begins to pay for anything. It’s a trade-off: a lower monthly bill in exchange for paying more when you receive care.

Yearly Premium Increases

It’s a common misconception that your Medigap premium will stay the same year after year. In reality, you should expect your premium to increase annually. These rate adjustments happen for a few reasons, including inflation and the rising cost of healthcare overall. How much your premium increases also depends on how the insurance company prices its policies. Some companies base rates on your current age, meaning the price goes up as you get older. Others base it on the age you were when you first bought the policy. Understanding this from the start helps you budget for the future and not be caught off guard by a higher bill.

Services Medigap Doesn’t Cover

Medigap plans are fantastic for filling the “gaps” in Original Medicare Parts A and B, but they don’t cover everything. It’s crucial to remember that Medigap policies sold today do not include prescription drug coverage. For that, you will need to enroll in a separate Medicare Part D plan. Additionally, Medigap generally doesn’t pay for services that Original Medicare doesn’t cover, such as long-term care, routine dental or vision exams, and hearing aids. When planning your healthcare budget, make sure you account for these other essential services separately from what your Medigap plan will cover.

Frequently Asked Questions

Why is the same Medigap plan so much cheaper from one company than another? This is the most important thing to understand about Medigap. While the government requires that every Plan G (or any other lettered plan) offer the exact same medical benefits, it doesn’t regulate the price. Each insurance company sets its own premiums based on its own business model and projections. This is why you can find two identical plans with wildly different price tags. Your job is to find the company that offers the plan you want at the most competitive price.

What’s the difference between a Medigap plan and a Medicare Advantage plan? Think of it this way: a Medigap plan works with your Original Medicare (Part A and Part B), while a Medicare Advantage plan is a way to get your Medicare benefits instead of Original Medicare. Medigap pays for the costs that Original Medicare leaves behind, like deductibles and coinsurance. With Medigap, you can see any doctor in the country that accepts Medicare. Medicare Advantage plans are more like traditional HMOs or PPOs, with specific networks of doctors and hospitals. You can’t have both at the same time.

Will my Medigap premium go up every year? Yes, you should expect your premium to increase over time. These rate adjustments are normal and happen for a few reasons, including overall healthcare inflation. How much it increases depends on the company and how they price their plans. Some companies have a history of smaller, more predictable increases, while others might have larger jumps. This is why it’s smart to look at a company’s rate history, not just the price they offer you today.

Did I really miss my chance to get a good rate if I’m already over 65? Not necessarily. Your one-time, six-month Medigap Open Enrollment Period is definitely the best time to enroll because you can’t be turned down or charged more for your health. However, if you’ve missed that window, you may still have options. Certain situations, like losing employer coverage, can grant you a “guaranteed issue right” to buy a plan. If you don’t have one of those rights, you can still apply, but you will likely have to answer health questions.

Do I really need an agent to help me find a plan? You don’t have to use an agent, but it can make the process much easier and save you a lot of money. A good independent agent can quickly compare prices from dozens of companies in your area for the exact same plan. They can also give you insight into a company’s reputation for customer service and their history of rate increases. Their service is free to you, and they can help you find the best value without you having to make dozens of phone calls yourself.