What Does Medigap Cost?

There’s no single answer, and that’s actually the most important thing to understand before you start shopping. The same standardized plan letter can cost noticeably different amounts depending entirely on which insurance company sells it to you, where you live, and how that insurer prices its policies.

Why identical coverage has different prices

The benefits are standardized by federal law. The pricing is not. Insurance companies use one of three pricing methods, and knowing which one applies to a policy you’re looking at matters for your long-term costs, not just this year’s premium.

Community-rated

Everyone with the policy pays the same premium regardless of age. Premiums can still rise over time due to inflation and claims experience, but not because you personally got older.

Issue-age-rated

Your premium is locked in based on your age when you first bought the policy. It won’t increase just because you get older, though it can still rise for other reasons.

Attained-age-rated

Your premium is based on your current age and increases as you get older, on top of any other rate increases. This type often starts cheapest and gets more expensive over time relative to the other two methods.

What actually drives the price you’re quoted

Your age, your gender in most states, whether you use tobacco, your ZIP code, the plan letter itself, and which of the three pricing methods above the insurer uses. Two people with identical health, identical age, and identical plan letters can be quoted meaningfully different premiums just because they’re comparing different companies.

The part that costs people real money

Buying the first Plan G quote you get, from the first company that mails you a brochure, without comparing at least a few carriers. Because the coverage is identical across companies, price and pricing method are the only variables that matter — and they’re exactly the variables most people never think to compare.

This page is general educational information, not insurance advice specific to your situation. See our full disclosure.