The Cost of Medigap

Medigap

Private companies set the cost of Medigap premiums and other expenses. However, each policy that is labeled as Medigap is required to provide the same benefits. The plans all feature a cost range for each monthly premium. 

Medigap is given a letter identification which denotes the plan. Typically, it will also refer to either a Medicare Part A deductible or Medicare Part B premium, coinsurance, and co-pays.

11. What Medigap Covers

Medigap2

Depending on the Medigap plan, the cover options might include:

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

10. Setting the Price of Medigap 

Medicare Money

Companies rely on three methods to price the policies they offer: 

  • Community Price: All members of the community pay the same amount of for a premium. Age is not a determining factor for pricing. In such a situation, the prices can change as a result of inflation, but age is never the cause of a price increase. 
  • Attained Age Pricing: A price that is set based on the person’s current age. The cost will increase as the person gets older. 
  • Issue Age Pricing: The initial price is based on a person’s age but it does not increase as the person ages. 

9. The Purpose of Medigap Policies

Medigap3

Medigap policies were designed to fill gaps in classic Medicare coverage (Part A and Part B). There are currently 10 Medigap plans that are identified by letters. The lettered plans offer the same coverage but with additional perks. 

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