The Plan You Purchase
One of the biggest factors that affect the cost of your supplement plan is the amount of coverage included in it. The more coverage you purchase, the more it will cost.
There are 10 different supplements to choose from—A, B, C, D, F, G, K, L, M, and N. Of these 10 options, plans A, B, K, and L cost the least, plans C, F, and G offer the most coverage at the highest cost, and plans D, M, and N fall somewhere in the middle.
Who You Purchase it From
Because supplements are offered privately, their costs will also vary based on the provider you purchase it from. Common companies include:
- Aetna
- Cigna
- Mutual of Omaha
- Blue Cross Blue Shield
The types of plans you can choose from also depend on the company—most companies only offer 3-7 plans.
How the Plan is Rated
When you purchase a Medigap plan, your company will have a specific way in which they determine your monthly premium:
- Community-Rated (No-Age Rated): Everyone in the plan receives the same premium regardless of age or health. It may be higher overall due to the “assumed risk” of older applicants, but it will still be reasonable and fair. This will also be greatly affected by the plan you purchase itself.
- Issue-Age Rated (Entry-Age Rated): Your premium is set by the age you apply and does not change as you age. So, if you enroll when first eligible at age 65, your premium will be lower than if you enrolled 10 years later at age 75.
- Attained-Age Rated: Your premium is set by your current age, meaning that it increases as you age. Say, for instance, you enroll at age 65. The company will establish the amount it will increase over time. Your premium then will increase by a few dollars each year. This is not necessarily the greatest rating system if you are a younger applicant, but it can be helpful if you are slightly older.
Other Factors
There are a few other factors that can also affect the cost of your supplement:
- Whether or not the company offers discounts: Most companies have some appealing discount that works for certain individuals. For example, many companies offer discounts for multiple people enrolling in a household at once (if you and your spouse both enroll, for example), for non-smokers, and more.
- If you enroll outside of your Medigap Open Enrollment Period (which takes place during the 6 months following your 65th birthday), your costs will likely be higher.
- Some providers offer a high-deductible option for Plans F and G. If you purchase one of these plans over the typical plan, you will pay a significantly higher yearly fee, but a much lower monthly premium.