How Much Do You Pay for Medigap?

At first, Medicare consisted of only two parts: A and B. Though two more parts were later added, parts A and B are often referred to as Original Medicare and are still the only two parts sold straight from the government. Original Medicare is not free and has many copayments, coinsurance charges, excess charges, premiums and deductibles. A large number of Medicare beneficiaries purchase Medicare supplements to help them meet Original Medicare's costs. How much you pay for Medigap itself depends a great deal on which plan you buy.

Premiums

• All Medigap plans require a monthly premium. The costs of the premiums vary depending on which plan you buy and how your insurance company sets its prices. Medigap Plan A has the least amount of benefits and thus is generally the least expensive. Plan F has all the Medigap benefits currently available as of 2011, but also has the highest premiums. You can, however, purchase Plan F in a high-deductible option, which lowers the monthly premiums. Medigap companies set their premium costs in one of three ways. One is to base them on your age when you buy it, which means they will not increase as you age, although premiums may increase for inflation. A second way is to base your premium on your current age, which means it will increase as you get older. The third way is called community rating, which applies the same premium to all buyers, no matter what their age.

Cost Sharing

• Your Medigap costs also will depend on whether or not you buy a cost-sharing plan. You will have to pay a larger share for benefits, but your monthly premiums will be less. As of 2011, Plans K, L and M have cost-sharing features. Users pay 50 percent of costs for most Plan K benefits or 25 percent for Plan L benefits. Plan M pays 100 percent of all benefits except for the Part A hospital deductible, which users must cost-share at 50 percent. Plans K and L have yearly out-of-pocket limits; Plan M does not.

Deductibles

• Some Medigap plans have an annual deductible. All plans that carry the foreign travel emergency benefit come with a yearly deductible just for this benefit. High-deductible Plan F also has a separate deductible, which must be met independent of the foreign travel emergency deductible.

Copays

• While Medicare itself comes with many copays, only one Medigap plan has any. Medigap generally covers copays instead of charging them, but Plan N has its own copays. All emergency room visits that do not result in a hospital admission come with a copay, as do all visits to a doctor's office. This applies to each visit, even if you make several of them in one day.