Understanding the average cost for Medicare supplemental insurance
Medicare supplemental insurance, also known as Medigap, is a set of standardized policies offered by private insurance companies to help cover the costs that Original Medicare (Part A and Part B) doesn't pay. While the benefits for each lettered plan (like Plan G or Plan N) are standardized across the country, the premiums can differ significantly based on several factors. This guide breaks down the key components that influence the average cost, providing a clearer picture of what you can expect to pay for your Medigap policy.
Factors that influence Medigap premiums
Your monthly premium for a Medigap policy is not a fixed national rate. It is determined by several variables that insurers use to calculate their costs and risks. Understanding these can help you better anticipate your potential expenses.
Your plan type and coverage level
- Higher coverage, higher cost: The more comprehensive the coverage, the higher the premium. For example, popular plans like Plan G generally have higher premiums than plans with more out-of-pocket costs, such as Plan K or Plan N.
- High-deductible options: Many plans offer a high-deductible version, which comes with a significantly lower premium but requires you to pay more out-of-pocket before the plan begins to cover costs. For 2025, the deductible for high-deductible Plan G is $2,870.
Your geographic location
- State-by-state variation: Where you live is a major factor in determining your premium. Insurance regulations, healthcare costs, and market competition differ by state, causing average premiums to fluctuate widely. For instance, a policy in New York may cost significantly more than an identical policy in a state with lower healthcare costs.
- ZIP code impact: Even within the same state, premiums can vary by ZIP code. Urban areas with higher healthcare costs may have more expensive premiums than rural areas.
The insurer's pricing method
Insurance companies use one of three main methods to set their Medigap premiums:
- Community-rated (or no-age-rated): The same premium is charged to everyone regardless of age. Premiums may still increase due to inflation but not because you are getting older.
- Issue-age-rated: The premium is based on your age when you first purchase the policy. It is locked in at that rate and will not increase due to age, but it may still rise over time due to inflation and other factors.
- Attained-age-rated: The premium is based on your current age and increases as you get older. This can lead to lower initial premiums but can become the most expensive option over time.
Individual factors
- Age: For issue-age-rated and attained-age-rated policies, your age at the time of purchase or your current age, respectively, will directly impact your premium.
- Health status and medical underwriting: If you enroll during your Medigap Open Enrollment Period, you cannot be denied coverage or charged a higher premium due to health conditions. If you apply outside this period, insurers in many states can use medical underwriting, and you may be charged a higher premium or denied coverage based on your health.
- Tobacco use: Many insurers charge higher premiums for smokers.
Comparing popular Medigap plan costs for 2025
While premiums are individualized, here is a general comparison of average monthly costs for some of the most popular Medigap plans in 2025. These are based on sample data for a 65-year-old nonsmoker and serve as a guide, not a guarantee.
| Medigap Plan | Average Cost Range (monthly) | Key Coverage Features |
|---|---|---|
| Plan G | $120 – $180 | Most comprehensive plan for new enrollees; covers everything Original Medicare doesn't, except the Part B deductible. |
| High-Deductible Plan G | $44 – $84 | Lower premium, but you pay a high deductible ($2,870 in 2025) before benefits kick in. |
| Plan N | $90 – $150 | Lower premiums than Plan G, but requires small copays for some doctor's office visits and emergency room visits. |
| Plan F | $150 – $220 | Not available to new enrollees since 2020, but provides the most comprehensive coverage, including the Part B deductible. |
| High-Deductible Plan F | $44 – $81 | Not available to new enrollees since 2020; similar to High-Deductible Plan G but covers the Part B deductible. |
How to get the best value for your Medigap policy
To ensure you are getting the best value, consider these steps:
- Compare quotes from multiple companies. Since the benefits for each lettered plan are standardized, your focus should be on comparing prices and customer service. Use online tools and work with an independent insurance agent to find the most affordable option in your area.
- Enroll during your Medigap Open Enrollment Period. This 6-month window begins when you are 65 and enrolled in Medicare Part B. During this time, insurers must offer you a Medigap policy at the best available rate, and they cannot deny you coverage or charge higher premiums based on pre-existing health issues.
- Evaluate pricing methods carefully. If you are healthy and prefer a steady rate, an issue-age-rated policy might be a good choice. If you prefer the lowest initial premium, an attained-age-rated plan could work, but be prepared for premiums to increase over time. Community-rated plans can offer stability, as premiums are not tied to age.
- Consider high-deductible options. If you are in good health and want to keep monthly costs low, a high-deductible plan could be a cost-effective option, acting as a safety net for major medical events.
- Look for discounts. Some insurers offer household discounts if two people in the same home purchase a policy, and others may offer discounts for non-smokers or other criteria.
Choosing the right Medigap plan requires balancing your budget with your health needs. While the average cost provides a starting point, a personalized quote will give you the most accurate figure. For more official information, visit the Medicare website at https://www.medicare.gov/.
Conclusion
While there is no single answer to what's the average cost for Medicare supplemental insurance, general figures for 2025 suggest a range of $90 to $300 per month for mid-level plans, with prices varying significantly based on the plan type, your location, the insurance company's pricing method, and individual factors like your age. By comparing different plan types, understanding how insurers set their rates, and enrolling during your open enrollment period, you can make an informed decision that balances your budget with your healthcare needs.
