The monthly premium for Medigap Plan G coverage costs approximately $145 per month nationwide. But the actual cost ranges from $120 to $671.84 per month, depending on your age, location, sex, and tobacco use status.
Premiums tend to be higher in areas where the cost of living is higher. The most expensive Medigap Plan G coverage we found was offered by Bankers Conseco for policyholders in the New York City area.
That’s a substantial premium, of course. But millions of Medicare beneficiaries believe it’s more than worth the cost, in most areas. That’s why Medigap Plan G is the most popular and fastest growing Medigap plan of all the Medigap policies available to new Medicare beneficiaries.
Medicare Supplement Plan G offers the broadest and most comprehensive coverage of all the standard Medicare supplement (Medigap) plans available to new Medicare beneficiaries: It covers all out-of-pocket costs for services covered under Medicare Part A (hospitalization charges) and Part B (physician’s and lab fees, durable medical equipment, and up to three pints of blood).
The only exception under Medigap Plan G coverage is the Medicare Part B deductible, which is $226 as of 2023.
For example: If you go to the hospital as a Medicare patient, you would normally face a Part A deductible of $1600 per benefit period.
Let’s say you also racked up $20,000 in doctor’s fees and lab tests during the year, including for your hospitalization.
Out of Pocket Costs:
Medigap Plan G Cost vs. Original Medicare Only
| Charge | Original Medicare Only | With Plan G |
|---|---|---|
| Hospitalization | $1,600 deductible per benefit period | covered |
| Physician and lab fees | $226 deductible | $226 deductible |
| Physician and lab fees | 20% cco-insurance after deductible, or $2,954.80 | covered |
| Total out-of-pocket costs | $4,780.8 | $226 |
As you can see, the 20% Part B coinsurance charges can add up very quickly! Especially if you need expensive tests done, MRI imagery, or if you need surgery.
The only Medigap plan that offers broader benefits than Plan G is Plan F. It covers all out-of-pocket costs for services under Medicare Parts A and B, including the Part B deductible. However, Plan F is closed to new Medicare beneficiaries. You can only enroll in Plan F if you became eligible for Medicare prior to January 1st, 2020.
High Deductible Medigap Plan G Cost
If you have some money in the bank and can afford a higher deductible, you can enroll in a high deductible Medigap Plan G and save significant money on monthly premiums.
As of 2023, the deductible for all Medigap high-deductible plans is $2,700. So if you have a medical need, you would have to pay $2,700 before your Medigap Plan G benefits would kick in. Your high deductible Medigap Plan G would cover all out of pocket costs for Original Medicare-covered services except for your $2,700 deductible and a $226 deductible for Part B.
High deductible Plan G can be a great match if you’ve been contributing to a health savings account for years and you have a substantial balance: Money you take out of an HSA for qualified medical expenses is tax-free.
In contrast, if you need to use 401(k) or traditional IRA money to pay medical expenses, you’d have to pay your medical costs with after tax dollars.
Medicare SELECT
Medicare SELECT plans are the same as the standard Medicare Supplement plans. However, they don’t allow you the same flexibility to choose your own doctor. If you choose a SELECT plan G, you’ll have to use your insurance carrier’s own network of providers to receive your full insurance benefits for non-emergency care.
With SELECT plans, the insurance company negotiates discounted rates with the lowest cost providers. As a result, Medicare SELECT plans are much cheaper than standard Medigap policies.
Medigap Plan G Costs and Your Age
Your premium for Medigap Plan G coverage, or any other Medigap plan, may vary substantially based on your age and the insurance company who runs the plan. And it can also change as you get older.
So while Medigap plans are standardized, there’s a lot more to selecting a Medigap Plan G than just comparing the different monthly premiums when you sign up. You should also look carefully at how your plan’s pricing will change over time as you grow older.
That’s because different Medigap companies use different systems for assigning prices based on your age.
For example, some Medigap plans will have a relatively low premium for anyone who enrolls at age 65. But the premium increases a little each year as you get older.
Other Medigap plans charge all members the same premium, regardless of age – a practice called community rating. All other things being equal, younger members will pay higher premiums than in other plans. But premium increases won’t hurt you too much as you get older.
And other plans base their premium based on your age at the time you enroll. Your premium may go up because of inflation and the general cost of claims. But your age won’t be a factor in calculating your premium after you first enroll.
The best plan for you is the best plan you can afford that you are not likely to lapse!
So don’t just blindly sign up for a plan that just shows the cheapest premium for the first year. You may well live 25 or 30 years into retirement after you turn 65. Think ahead: Sometimes the best plan isn’t the cheapest plan now.
Click here for more information on Medigap age rating methods and their advantages and disadvantages.
Get a Free Medicare Supplement Quote
How to Keep Medigap Plan G Costs Low
There are several ways you can keep your Medigap Plan G premiums as affordable as possible:
1. Enroll when you sign up for Medicare Part B.
Enroll at age 65, or when you first enroll in Part B. If you enroll during your Medigap initial enrollment period, then you have guaranteed enrollment privileges.
As long as you enroll during your initial enrollment period, you are entitled to the best available pricing for any given Medigap plan you choose, regardless of your medical condition or history. The carrier must sell you a policy, and you cannot be turned down, or charged more because of your medical records.
Initial enrollment period begins the first day of the month you turn 65 or older and lasts for six months. It cannot be changed or repeated.
If you miss this six month window, the insurance company can charge you more based on your medical history. They can also turn you down outright. The only exceptions are if you qualify for a special enrollment period due to a qualifying life event, such as relocation to a new city or if your current plan gets canceled.
2. Use a high-deductible Medigap Plan G.
Yes, you take on more risk. But premiums for a high-deductible Medigap Plan G are just a fraction of what they are for the standard version. If you remain reasonably healthy for some years, the money you save will add up to much more than what you’d pay for in deductibles.
High-deductible Medigap Plan G plans are not available in every area.
3. Choose a Medicare SELECT plan.
With a Plan G SELECT policy, your out-of-pocket expenses for Medicare services covered under Parts A and B are limited to $226 for the year, as of 2023. Premiums are lower than for the standard plan, but how much lower varies with your age, location, and carrier.
4. Look at all your healthcare options.
Medigap Plan G coverage is not the best option for everyone. Some people are better suited to a more limited Medigap policy, for example. And others are better served by a Medicare Advantage plan.
You may also consider healthsharing – an innovative non-insurance alternative to traditional Medigap plans. For example, the Medi-Share 65+ healthsharing plan provides similar protection against out-of-pocket costs for Medicare Parts A and B, for significantly less per month.
There are no care provider networks, and no open enrollment periods. However, unlike Medigap plans during initial enrollment, Medi-Share 65+ may impose a waiting period on expenses related to pre-existing conditions.
5. Use an experienced Personal Benefits Manager to shop around.
Choosing a Medicare Supplement policy is complex. It’s not just a matter of looking at monthly premiums on a computer screen and choosing the cheapest one.
Price is important. But there are many other factors to consider, too.
It’s hard to go through a dozen different carriers in your states all on different websites, and actually see all the relevant factors. Sometimes they make important pricing and other information hard to find! When you use a personal benefits manager at Medicare Advisors, we make it simple, easy, and painless. At Medigap Advisors, you can explore all your Medicare options with a single phone call.
We will lay out your best options side by side and help make the decision very easy. There’s never any charge, and no obligation to use our services. All you need to do is click here, and make an appointment.
But don’t delay! Remember, you only have a limited window of time to make your Medigap decision and still keep the best possible pricing and guaranteed enrollment privileges.
For most people, Medigap Plan G is a great decision… as long as they can afford the premium. Other people are better off in Medicare Advantage, or Medi-Share 65+ for those with no significant pre-existing conditions.
MedigapAdvisors is one of only a handful of Medicare insurance brokers who can talk to you about all your options. Including the non-insurance alternatives.
So make your appointment online now, or call us directly at 800-913-3416 and we’ll get you set up.
Christine Corsini is one of your Personal Benefits Managers at MediGap Advisors. She loves working for Medigap Advisors especially helping clients choose the right Medicare plan.