Medicare Supplement Insurance Costs

How much you pay for Medicare supplement insurance depends on two main things: what the plan covers and which company you choose. These plans help fill the gaps in Original Medicare, but you can’t use them with Medicare Advantage plans. You can choose from 10 different standardized Medicare supplement plans. While the price for each lettered plan will differ, all plans with the same letter offer the same coverage and benefits. 

Key Takeaways

• A Medicare supplement plan fills the gaps by helping you pay for out-of-pocket costs Original Medicare doesn’t cover. 
• Medicare supplement plans cover Parts A (hospitalization) and B (medical services) but not C (Medicare Advantage) and D (drug coverage).
• You can choose from 10 Medicare supplement plans and choose the insurance company you want to use.

Understanding Medicare Supplement Plan Costs and Benefits

You can buy Medicare supplement plans, also known as Medigap, from private insurance companies. These plans pay for the costs Original Medicare doesn’t cover, like deductibles, copays, and coinsurance.

The 10 standard Medicare supplement plans are designated by the letters A–D, F, G, or K–N. All carriers offer the same coverage for the same letter plans, but the premiums can vary. Plans E, H, I, and J are unavailable for new beneficiaries. Plans C and F are only available if you were eligible for Medicare before Jan. 1, 2020.

Medicare Premium Costs

Most working people pay nothing for Medicare Part A (hospitalization). If you don’t qualify for premium-free Part A, you may be able to buy the coverage. Those who qualify for Medicare Part B (medical services) typically pay $185 per month. Higher-income earners pay more.

Medicare Parts C, D, and supplement premiums vary based on the plan you choose. 

Important

For Original Medicare, you need to enroll in Part A and Part B. You get extra coverage by adding a Medicare supplement plan and Part D drug coverage.

Potential Medicare Out-of-Pocket Costs

Your coinsurance costs, copays, deductibles, and premiums make up your total annual out-of-pocket costs. Your premium is the amount you pay for your Medicare coverage. The deductible is the amount you must pay before Medicare pays anything, and the coinsurance or copay is your share of costs after Medicare pays. 

Important

You have to pay a separate premium for Medicare supplement plan on top of your Original Medicare premium. 

The Part B deductible is $257 in 2025. After the deductible, you’ll pay 20% of the costs of your care. 

Important

Medigap plans won’t necessarily pay for all the medical services you need. Depending on your plan, you may have to pay for vision, dental, and long-term care. 

The Part A hospitalization deductible is $1,676 per inpatient hospital visit during the benefit period. The coinsurance costs aren’t as straightforward. The fees vary depending on how long you stay in the hospital.

Here’s what you can expect Medicare to pay:

• Days 1–60: Your Part A deductible of $1,676
• Days 61–90: $419 per day
• Days 91–150: $838 per day
• After day 150: $0 (you pay 100% of costs)

After the first 90 days, Medicare will pay for 60 additional days of inpatient hospital care during your lifetime. There is no maximum out-of-pocket cost if you stay in the hospital for more than 150 days.

Your Medicare supplement plan will pay for your costs beyond the figures listed above for plans A–D, F, G, M, and N without limits. Plans K and L have caps on how much you’ll pay for out-of-pocket expenses.

Medicare supplement plans sold after 2005 don’t pay for your prescription drug costs, but you may be able to cover them under Part D. 

Let’s look at an example of a hospital stay of 14 days with medical expenses of $4,000 and prescription drugs. 

Here’s what you’d have to pay in out-of-pocket costs:

• Your Part A deductible of $1,676 for your hospital stay
• Your Part B $257 deductible for your medical bills
• 20% of the remaining $3,743, which is $748.60
• Prescription drug costs

With this scenario, your total costs would be $2,681.60, plus your drug costs. A Medicare supplement plan would likely cover everything except your medications. Your prescription drugs may be covered under Part D, depending on your drug plan.

Lastly, your Medicare out-of-pocket costs can change yearly based on inflation, so it pays to research the best Medicare supplement insurance plans annually.

Medicare Supplement Cost Comparison

You have a variety of choices for Medicare supplement plans. Because each plan differs, the premium and out-of-pocket expenses can vary significantly depending on the coverage you pick and your health needs. 

All Medicare supplement plans cover some or all of the following expenses:

• Your Part B coinsurance fees (all or a portion of those fees)
• Up to three pints of blood (full or partial coverage)
• Part A hospice care coinsurance
• Part A coinsurance and hospital costs for an extra 365 days once you have exhausted Original Medicare benefits

Differences Between Standardized Letter Plans

The Medicare supplement plans that offer the most coverage will usually cost you more each month.

According to health policy research firm KFF, Medicare supplement Plan G—the most comprehensive plan for new beneficiaries—was the most popular plan type in 2023. Nearly 39% of policyholders chose Plan G. The average monthly premium among all Medicare supplement policyholders was $217.

In comparing the various plans, you’ll want to account for the cost of the Part A and B deductibles and the copay/coinsurance amount. You’ll also want to consider the plan benefits for the following coverages:

• Skilled nursing facility
• Part A deductible
• Part B deductible
• Part B excess charges
• Foreign travel emergency

Here are some important considerations when choosing a provider:

• Availability of discounts 
• Availability of a Medicare SELECT policy (requires you to use specific network providers)
• Availability of a high-deductible plan
• Medical underwriting

Some states offer Medicare SELECT, a cheaper Medigap option. It requires you to use network hospitals and doctors for full benefits.

If you don’t have guaranteed issue rights, which means insurance companies have to sell you a Medigap plan regardless of your health, you’ll have to go through medical underwriting and you might face higher premiums. You typically have guaranteed issue rights during Medigap open enrollment or if your health coverage changes in some way. 

So if you miss the open enrollment period, you might pay more or get denied coverage altogether. The Medigap open enrollment period starts on the first day of your birthday month and runs for six months.

Note

While you may get a discount on your Medigap plan for being married, Medigap plans only cover one individual. Each spouse must buy their own policy.

The price ranges for a 70-year-old male nonsmoker living in Texas in ZIP code 79936 are:

While most plans don’t have an out-of-pocket limit, those with plan K won’t have to pay more than $7,220. The maximum out-of-pocket limit for plan L is $3,610. Once you reach those limits on plans K and L, you pay nothing more. 

Factors Affecting Your Medicare Supplement Costs

Your age, gender, residential area, and smoking status are the main factors that affect your Medicare supplement costs, in addition to the type of Medigap plan you choose.

The insurance company you choose also affects your Medicare supplement costs because each carrier determines its own rates.

In setting rates, providers use one of the following three structures:

• Community-rated: Everyone with the same plan pays the same premium regardless of gender or age. Premiums may increase because of inflation or other factors. 
• Issue-age-rated: If you buy a plan when you’re younger, you’ll pay less each month than someone who buys the same plan when they’re older. Your premium won’t go up as you age. 
• Attained-age-rated: Premiums are based on your current age and increase every year you get older. 

Here are some examples of Medigap price variations among companies for a 70-year-old male nonsmoker living in Texas in Zip code 79936.

Tips for Saving on Medicare Supplement Insurance

There are several ways to save on Medicare supplement insurance: Avoid late enrollment penalties, pick the right plan and company for your needs, see if you qualify for discounts, and shop around every year to make sure you’re getting the best deal. 

Here are some actionable tips to help lower Medicare supplement insurance costs. 

1. Purchase during the open enrollment period: To avoid a penalty, you must enroll in a Medicare supplement plan the first month you are eligible for Part B and for the six months following your birthday month.
2. Choose a provider that uses issue-age-rating: Inquire about how the provider rates premiums and choose one that uses your age when the policy is issued. 
3. Ask about available discounts: Take advantage of one or more discounts for being married, being a non-smoker, or paying annually or by electronic funds transfer.
4. Choose a high-deductible plan (Plan G or F): Your premiums will be lower when you choose a high-deductible plan (but your out-of-pocket costs will be higher).
5. Choose Medicare SELECT if it’s available in your state: This plan will save you on your premiums, but be aware of the restrictions on the covered providers you can visit.
6. Shop for plans every year: Medigap plans renew automatically, but you may find a better deal by shopping around each year during the open enrollment period.

The Bottom Line

Medigap plans can help control the cost of your Medicare coverage by paying for deductibles and copays. You can choose from 10 standardized plans. All plans with the same letter offer the same benefits. Medicare supplement plans don’t cover Medicare Advantage or Part D drug plans, but some may include vision, dental care, or long-term care. Weigh your options carefully to get the best Medicare supplement coverage for your needs.