When it comes to choosing a Medicare Supplement (Medigap) Insurance policy and determining how much it will cost you, there is no one-size-fits-all method. Although one company that offers a Policy A must offer the same benefits as another company’s Policy A, there is no requirement that the policies have to be priced the same.

There are no federal regulations controlling the costs, so insurance companies are free to price their Medicare Supplement policies however they choose. There are some factors for you to look for when comparing costs and deciding on a Medigap policy that works for you.

What are Medigap Costs Based On?

Monthly premiums for your Medigap Insurance depend on many different factors. Some of those are:

  • Your geographical location. For example, monthly premiums in California are generally significantly higher than monthly premiums in Texas.
  • Your age. The older you are when you first take out your policy, the higher your premium will be.
  • Your gender.
  • Whether you use tobacco.
  • The insurance company itself.
  • In some situations, your overall health.

How Do Medigap Insurers Determine the Premiums?

There are three ways that Medigap Plan premiums are priced.

  • Issue-Age-Related. This refers to the age you are at the time you first enroll in the Medigap plan. The younger you are when you first purchase your Medigap policy, the lower your premium will be. The premium will increase due to inflation, but not due to you growing older.
  • Attained-Age-Rated. Premiums depend on your current age and generally increase as you get older. Premiums may also increase due to inflation. The premium may be low when you first purchase the Medigap policy, but over your lifetime, these premiums will likely turn out to be the most expensive.
  • Community-Rated. These are the same for everyone in a specific geographical location no matter what age they are. These premiums are generally the least expensive. They may increase due to inflation, but not because of your age.

What Should I Look for When Shopping for a Medigap Insurance?

Be careful when you shop for Medigap policies. The price for the exact same coverage often varies widely. The Medicare official website offers some helpful hints on how to find the best Medicare Supplement to meet your needs.

Compare the same type of policy: For example, if you are looking at a Plan G from one company, be sure to compare it with another company’s Plan G. Look carefully at the pricing. Although companies are required to offer the same benefits for Plan G, they are not required to offer you the same price.

Look for discounts:  Competitive insurance companies often offer discounts. There may be discounts for:

  • Women.
  • Non-smokers.
  • Married people.
  • For paying your premium by automatic withdrawal.
  • For paying your premium annually instead of monthly.
  • Discounts for multiple policies with the same company.

Whether it is guarantee issue or uses medical underwriting: If you have to undergo medical underwriting, you could be denied coverage if you have a pre-existing condition or medical problem for which the company does not want to cover you. If you are purchasing the policy during your initial Medicare Open Enrollment period, a Medigap policy is guarantee issue, which means the company cannot deny you coverage based on your medical history.

Medicare select policy: This limits you to certain providers within the insurance company’s network. These types of policies have a lower premium.

A high deductible option: This type of policy, for Plans F and G, requires you, in 2022, to pay the first $2,490 of deductibles, including copayments and coinsurance, that are not paid by Medicare before your Medigap policy will pay anything at all. Premiums are lower, but there is generally a separate annual premium if you want coverage for foreign travel.

Check benefits offered by all plans: Some plans offer a limit to out-of-pocket spending. Others offer cost-sharing plans, which means certain benefits may only be partially covered, and you agree to pay the rest of the costs yourself.


  1. Costs of Medigap Policies, Medicare.