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Many factors can impact your Medicare Supplement rates. Because of this, Medigap premiums are unique for each beneficiary. When trying to find Medigap premium quotes, you first turn to the Internet. You complete a form on a website in order to see quotes. Before you see anything else, however, your phone number is requested. An agent will call you soon with your rate quotes, the site promises. Below, we’ll explain what factors impact your Medicare Supplement rates.
Medigap Premium Rates Are Impacted by Multiple Factors
Even if your neighbor has the same Medigap letter plan through the same carrier as you, their premium will not be the same as yours. This is due to several factors that impact premium rates. It’s important to remember that all Medigap plans are standardized by the government. This means that each letter plan has a set of benefits that will stay the same regardless of the carrier. The benefits will be identical if you go with a Plan G through Aetna or Cigna; the only difference will be the premium you pay.
9 Factors That Impact Your Medicare Supplement Rates
- Your location
- Your gender
- Your age
- Tobacco use
- Household discounts
- How you pay
- Rate increase history
- When you enroll
- Rate locks
We’ll discuss each factor in more detail below.
Your Location
The amount you pay for a Medigap plan might be very different if you lived in another state. For example, a 65-year-old woman living in Florida pays an average of $195 in monthly premiums for Plan F.
If she were living in Texas, the same woman would only be paying around $123 in monthly premiums for the same plan. However, in New York, she would be paying about $306 for the same Plan F as in the other two states. As you can see, your location is a significant factor in determining what you’ll pay in monthly premiums for a Medigap plan.
Your Gender
You might have been unaware that your gender can be a determining factor in your Medigap rates. Since women are often healthier than men on average, female beneficiaries pay about $10-30 less in monthly premiums.
For example, a 65-year-old man from Palm Harbor, Florida will receive quotes for Plan G that average about $176 per month. Meanwhile, the cost of Medigap Plan G in Florida for a woman who is the same age and lives in the same ZIP Code will reflect quotes for an average of roughly $169 per month.
Texas follows the same pattern, with the 65-year-old man paying $112 on average for Plan G and the 65-year-old woman paying around $98. Not all states use your sex/gender to determine your Medigap premiums. For example, in New York, the man and woman can both expect to pay $268 or more per month for their Plan G.
Your Age
Depending on the rating method used by your Medigap carrier, your age may be used to determine your rates. You’ll pay less when you enroll at age 65 compared to if you enrolled at age 75. Additionally, if you’re eligible for Medicare due to collecting SSDI for 24 months, your premiums could be three to four times higher than those of beneficiaries who aged into Medicare.
Tobacco Use
Those who smoke, chew, or use vaping products can expect to pay up to 10% more in monthly premiums. This is because those who use tobacco tend to incur more medical conditions.
Household Discounts
Some carriers offer discounts to those living in the same household. If, for example, your spouse enrolls in a plan with the same carrier you use, you both might be eligible for a discount. Discounts vary and depend on the carrier with which you choose to enroll. If your carrier offers a household discount, you can expect to pay 5-15% less for your policies.
How You Pay
Some carriers charge more if you choose to pay quarterly, semiannually, or annually. This is because they prefer you to pay monthly. Also, it’s more cost-effective for carriers to process your payments electronically versus by check or credit card. Because of this, some carriers will discount your premiums if you pay electronically.
Rate Increase History
You’ll want to ensure the carrier you enroll with has a financial rating of A or better. You want to ask your agent about the carrier rate increase history. Also, it’s best to choose a carrier that has been in the market for at least five years.
When You Enroll
One of the most significant factors determining your Medigap premium rate is when you enroll in your plan. The optimal time to enroll is during your Open Enrollment Period. This timeframe may only happen once in your lifetime. Your Medicare Supplement Open Enrollment Period takes place during the six-month window that begins the first day of the month of your Part B effective date.
During this time, a carrier can’t deny you coverage or charge you higher monthly premiums due to any health conditions or medication you take. Outside of your Open Enrollment Period, carriers may require you to go through medical underwriting. You may then be denied coverage due to pre-existing conditions or need to pay more in monthly premiums.
Rate Locks
Some carriers offer a 12-month rate lock. In this case, even if your effective date isn’t for a few months, you can benefit from enrolling as soon as possible to prevent any rate increases.
How Much is Medigap Per Month
A Medigap plan can cost anywhere between $50 to $350 per month depending on the letter plan.