Medicare Supplements (Medigap)

Medicare Supplements (Medigap)

Medigap is Medicare Supplement Insurance that helps fill "gaps" in Original Medicare and is sold by private companies.

These plans cover some or most of the additional health care expenses that Original Medicare does not cover, such as co-pays, co-insurance and deductibles.

Medicare Supplement Plans do not come with “Creditable Drug Coverage”. You will need to sign up for a Medicare Part “D” Stand alone prescription drug plan. Click on the “Part D – Prescription Drug” tab to learn more.

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Medigap

Original Medicare + Medigap Supplement

Higher premiums but no co-pays.

Freedom to choose doctors.

No referrals necessary.

Some routine services not covered (vision, hearing).

Covered anywhere in US.

Higher premiums but no co-pays.

Freedom to choose doctors.

No referrals necessary.

Some routine services not covered (vision, hearing).

Covered anywhere in US.

Medicare Advantage

Medicare Advantage Plan

Generally lower premiums but has co-pays.

May be restricted to network.

May need referrals for specialists.

May include extra benefits (vision, hearing, fitness).

Emergency services only outside the area.

Generally lower premiums but has co-pays.

May be restricted to network.

May need referrals for specialists.

May include extra benefits (vision, hearing, fitness).

Emergency services only outside the area.

How Costs of Medigap policies are determined

Each insurance company decides how it will set the price, or premium, for its Medigap policies. It’s important to ask how an insurance company prices its policies. The way they set the price affects how much you pay now and in the future. Medigap policies can be priced or "rated" in 3 ways:

How it’s priced Generally the same monthly premium is charged to  everyone who has the Medigap policy, regardless of age. What this pricing may mean for you Your premium isn’t based on your age. Premiums may go up because of inflation and other factors,  but not because of your age.
Example
Mr. Smith is 65. He buys a Medigap policy and pays a $165 monthly premium. Mrs. Perez is 72. She buys the same Medigap policy as Mr. Smith. She also pays a $165 monthly premium because, with this type of Medigap policy, everyone pays the same price regardless of age.

How it’s priced

The premium is based on the age you are when you buy (when you’re “issued”) the Medigap policy.

What this pricing may mean for you

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.

Example

Mr. Han is 65. He buys a Medigap policy and pays a $145 monthly premium.

Mrs. Wright is 72. She buys the same Medigap policy as Mr. Han. Since she’s older when she buys it, her monthly premium is $175.

How it’s priced

The premium is based on your current age (the age you have “attained”), so your premium goes up as you get older.

What this pricing may mean for you

Premiums are low for younger buyers, but go up as you get older. They may be the least expensive at first, but they can eventually become the most expensive. Premiums may also go up because of inflation and other factors.

Example

Mrs. Anderson is 65. She buys a Medigap policy and pays a $120 monthly premium. Her premium will go up each year. 

  • At 66, her premium goes up to $126.
  • At 67, her premium goes up to $132.
  • At 72, her premium goes up to $165.


Mr. Dodd is 72. He buys the same Medigap policy as Mrs. Anderson. He pays a $165 monthly premium. His premium is higher than Mrs. Anderson’s because it’s based on his current age. Mr. Dodd’s premium will go up every year.

  • At 73, his premium goes up to $171.
  • At 74, his premium goes up to $177.
The cost of Medigap policies can vary widely. There can be big differences in the premiums that different insurance companies charge for exactly the same coverage.

As you shop for a Medigap policy, be sure to compare the same type of Medigap policy, and consider the type of pricing used. For example, compare a Medigap Plan G from one insurance company with a Medigap Plan G from another insurance company.

The cost of your Medigap policy may also depend on whether the insurance company:

  • Offers discounts (like discounts for women, non-smokers, or people who are married; discounts for paying yearly; discounts for paying your premiums using electronic funds transfer; or discounts for multiple policies).
  • Uses medical underwriting, or applies a different premium when you don’t have a guaranteed issue right (also called “Medigap protections”), or aren’t in a Medigap Open Enrollment Period .
  • Sells Medicare Select policies that may require you to use certain providers. If you buy this type of Medigap policy, your premium may be less.
  • Offers a “high-deductible option” for Plans F or G. If you buy Plans F or G with a high-deductible option, you must pay the first $2,340 of deductibles, copayments, and coinsurance not paid by Medicare before the Medigap policy pays anything. You must also pay a separate deductible ($250 per year) for foreign travel emergency services.
  • If you bought your Medigap Plan J before January 1, 2006, and it still covers prescription drugs, you would also pay a separate deductible ($250 per year) for prescription drugs covered by the Medigap policy. And, if you have a Plan J with a high deductible option, you must pay the first $2,340 before the policy pays anything.

2022

The standard Part B premium amount in 2022 is $170.10. Most people pay the standard Part B premium amount. If your modified adjusted gross income as reported on your IRS tax return from 2 years ago is above a certain amount, you'll pay the standard premium amount and an Income Related Monthly Adjustment Amount (IRMAA). IRMAA is an extra charge added to your premium.

If your yearly income in 2020 (for what you pay in 2022) was

File Individual Tax Return File Joint Tax Return File Married & Separate Tax Return You Pay Each Month (In 2022)
$91,000 or less
$182,000 or less
$91,000 or less
$170.10
Above $91,000 up to $114,000
Above $182,000 up to $228,000
N/A
$238.10
Above $114,000 up to $142,000
Above $228,000 up to $284,000
N/A
$340.20
Above $142,000 up to $170,000
Above $284,000 up to $340,000
N/A
$442.30
Above $170,000 and less than $500,000
Above $340,000 and less than $750,000
Above $91,000 and less than $409,000
$544.30
$5000,000 or above
$750,000 and above
$409,000 and above
$578.30

Late enrollment penalty:

In most cases, if you don't sign up for Part B when you're first eligible, you'll have to pay a late enrollment penalty. You'll have to pay this penalty for as long as you have Part B. Your monthly premium for Part B may go up 10% of the standard premium for each full 12-month period that you could have had Part B, but didn't sign up for it. Also, you may have to wait until the General Enrollment Period (from January 1 to March 31) to enroll in Part B. Coverage will start July 1 of that year.

Part B deductible & coinsurance

In 2021, you pay $203 ($233 in 2022) for your Part B deductible. After you meet your deductible for the year, you typically pay 20% of the Medicare-Approved Amount for these:

  • Most doctor services (including most doctor services while you're a hospital inpatient)
  • Outpatient therapy
  • Durable Medical Equipment (DME)

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