Each insurance company decides how it will set the price, or
, 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:
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 , or applies a different premium when you don’t have a guaranteed issue right (also called “Medigap protections”), or aren’t in a .
- Sells 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.