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 When you reach retirement age, Medicare insurance offers basic medical insurance protection for your health needs. However, this coverage is basic and does not cover all of the costs for covered medical services and supplies. Medicare supplemental insurance policies are known as “Medigap insurance” and they fill in the gaps in Medicare coverage. A financial advisor could also help you create or adjust a financial plan for your medical care needs in retirement. Let’s break down the average cost of Medicare supplemental insurance. What Is Medicare Supplemental Insurance?Medicare supplemental insurance plans cover the costs that you’re responsible for with Original Medicare. These policies are offered by private insurance companies and are on top of your Part A and Part B benefits. Supplement insurance policies offer a predictable monthly expense versus the unknown cost of visiting a doctor or going into the hospital. Original Medicare insurance policies are offered by the government to provide medical insurance for senior citizens through Part A and Part B policies. Unfortunately, these policies do not pay for all of the costs of covered medical services and supplies. Medicare supplemental insurance (aka Medigap insurance) fills in these gaps to help pay for some of the remaining health care costs. Medigap insurance policies help pay for co-payments, co-insurance amounts and deductibles. Additionally, some Medigap policies cover medical care when you travel outside the U.S. Traditional Medicare policies (Part A and Part B) do not cover international medical care. Medicare Supplemental Insurance ExclusionsSome Medigap policies include prescription drug benefits as part of their plan. When a plan does not include prescription drug coverage, then you can buy a standalone Medicare Part D insurance policy. Medicare supplemental insurance provides additional benefits and reduces your out-of-pocket expense for covered services. However, some services are excluded from these policies, including:
Medigap vs. Medicare AdvantageNo, these are two different options that seniors have for their healthcare needs. Medigap policies take care of the unpaid costs of Original Medicare. By comparison, Medicare Advantage policies are an alternative to Original Medicare and offer different levels of benefits that Medigap policies do not. Advantage Plans also help pay uncovered medical expenses that Original Medicare doesn’t. With a Medigap policy, you’ll have multiple insurance policies and insurance cards for your care, but you can see any doctor that accepts Medicare. Medicare Advantage is more like insurance that you had during your working years. You pay one company for your insurance and many Advantage Plans include extra benefits like dental, vision and prescription drug coverage. However, many Advantage plans require you to see “in-network” doctors and may not cover out-of-network care. Costs of Medicare Supplemental InsuranceInsurance companies often charge different premiums for the same Medicare Supplemental insurance policy. It pays to shop around to find the best price. Medigap policies are standardized and must follow federal and state laws to offer the same basic benefits. Price strategies vary by state and are determined in one of three ways:
The average cost of Medigap supplemental insurance depends on your age, where you live, if you use tobacco and which Medigap Plan you are purchasing. The chart below shows 12 different Medigap policy options for a 70-year-old woman. It includes the range of premiums for someone living in Tennessee who does not use tobacco.
*These policy options are available at Medicare.gov. Plans C and F are not available for people who turned 65 on or after Jan. 1, 2020. Bottom LineMedicare supplement insurance is an important tool to control your healthcare costs in retirement. It turns the unknown into a fixed monthly expense, which makes it easier to budget for. There are numerous Medicare Plans to consider and premiums vary based on your age, gender, state and tobacco use. It helps to consult with a professional to determine which plan is right for you. Tips for Insurance in Retirement
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How much a month is Medicare Supplement?In 2022, the premium is either $274 or $499 each month ($278 or $506 in 2023), depending on how long you or your spouse worked and paid Medicare taxes. You also have to sign up for Part B to buy Part A. If you don't buy Part A when you're first eligible for Medicare (usually when you turn 65), you might pay a penalty.
How much is the average Medicare supplemental insurance cost?The average cost of Medicare Supplement Plan G in 2022 was $135.17 per month, while the average Medicare Plan F premium was $185.42 per month. You can compare cost of Medicare Supplement plans and how much they cost online for free.
Why is my Medicare Supplement so expensive?The premium is based on the age you are when you buy (when you're "issued") the Medigap policy. Premiums are lower for people who buy at a younger age and won't change as you get older. Premiums may go up because of inflation and other factors, but not because of your age.
What is the Medicare Part B premium for 2022?Most people pay the standard Part B monthly premium amount ($170.10 in 2022). Social Security will tell you the exact amount you'll pay for Part B in 2022.
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Average monthly cost of medicare supplemental insurance
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