Your Medigap insurance cost is determined by a number of factors. Medicare supplement carriers will consider your age, gender, zip code, tobacco use and the standardized plan you pick.
All plans with the same letter are identical in every way, except the Medigap insurance cost or premium. Finding an affordable Medicare supplement plan isn’t difficult if you know where to look.
Donna’s Search for Affordable Medigap Insurance
Donna called and was in a tizzy. She would be turning 65 soon and was ready to sign up for Medicare but was totally confused by all the literature that came in the mail plus the incessant phone calls from salespeople who wanted to come to her home and SELL her a plan.
Years earlier I had helped her find health insurance when she was in between jobs. She remembered how I had taken the time to listen to her concerns and then spent time explaining her options. Now that she was ready to enroll in Medicare she wanted my help again.
Donna had information on Medicare Advantage as well as Medicare supplement plans, and like most seniors, she was on a fixed budget and needed to make sure she made the right choice.
All my clients get the same treatment. I first ask what they know and understand about Medicare, Advantage plans and Medigap and then go from there. It usually doesn’t take long for them to get off track.
Then I explain how the various parts of Medicare work, especially Part A and Part B. We talk about the differences in an Advantage plan and original Medicare plus a supplement plan.
Medicare Advantage plan premiums range from $0 to $100 or so. Medigap plans have higher premiums but lower costs.
What Does Medigap Insurance Cost?
The answer is, it can cost a lot or not much at all.
The true cost of Medicare insurance is not just the monthly premium, but also how much you have to budget for expected and unexpected medical costs.
With Advantage plans you never know how much to budget. Even though the plan may have a stated limit on out of pocket costs (typically $3500 – $6000) those figures do not include claims denied by the carrier or out of network penalties and charges.
Estimating your Medigap insurance cost is much easier, especially with the more popular plans. Most of my clients know their maximum at risk for hospital and outpatient charges are limited to the Medicare Part B annual deductible ($147 in 2013).
Like most seniors today, Donna was going to continue working past age 65 and did not need any financial surprises. It was easier for her to budget for a monthly premium knowing that her out of pocket was limited to $147 than trying to set aside several thousand dollars each year in case her health takes a turn for the worse.
She also liked the ability to keep her current doctors rather than picking blindly from a list provided by an Advantage plan carrier.
So what did Donna decide?
She picked Medigap plan G and saved more than $60 per month (over $700 per year) vs. the plan F that is heavily promoted by AARP, Blue Cross and Mutual of Omaha.
Donna was so pleased she referred two of her friends to me.
Thank you Donna! Satisfied clients are the best reward.