How to Compare Medigap Costs

MediGap is the supplemental insurance that makes up the difference between Medicare payments and the costs paid by a Medicare recipient. The Medicare recipient should compare several companies' MediGap supplemental insurance policies to get the best policy at an affordable cost.

Policy Rates

• MediGap insurance companies use one of three methods to determine the cost of an insurance premium. The Attained-Age-Rated policy has a lower premium when initiated, but will increase as the policy holder ages. The Community-Rate premium is based on the age of applicants in the same geographical area and will not increase due to age. The Issue-Rated premium, which is determined by the applicant's age at the time of purchase, will not increase as the policyholder ages. It will cost more if the policy begins when the applicant is 70 years old versus 65 years old. Premiums for all three policies can increase due to inflation and rising health care costs.

Lower Costs

• Medicare Select is a MediGap supplemental health insurance policy, available in certain states, that can lower premium costs. Patients are required to visit specific hospitals and possibly certain doctors in a designated network to receive full benefits.

Comparisons

• A MediGap applicant should compare the costs and benefits of the same plan among different companies, which can vary substantially. For an optimal policy, choose easy claim filing, a pre-existing condition wait period and only the benefits you need. Discounts for nonsmokers and high-deductible options can further reduce supplemental insurance costs.