Cost of Medicare Supplemental Insurance
When researching the cost of Medicare supplemental insurance, there is no real simple answer. The reason this is a difficult questions to answer is, that there are several variables that affect the cost. When you are on a fixed income, the cost of a Medicare Supplement can be a huge burden if you over pay for your coverage, hopefully this article helps.
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In this post I will try to explain the pieces that affect the cost of Medicare Supplements and what you can do to find the Medicare plan that gives you the most benefits for the least cost.
To make it easier on yourself, you can always call us at 920-545-4884 for a consultation and there is never a fee for our services. You can also get an idea of rates by using our free rate quote tool below.
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The Costs of a Medicare Supplement
There are many things that will affect the cost of your Medigap plan, and some have nothing to do with coverage. Some of the factors that figure into the cost are company or state related, such as:
- Do they have a Household discount or a Spousal discount
- Do you qualify for a discount (spousal or household)
- Does your state charge more for smoking when your are in your Open Enrollment? (Wisconsin does not)
- Is the company community, attained age or issue age rated
Medigap Coverage Costs
First let’s discuss what Medicare Supplemental Insurance covers. In Wisconsin there are no “lettered” plans, for more information see our article on how the benefits are structured for Medigap plans in Wisconsin. The short answer is that you have the “Base” which covers the 20% that is not covered and then there is a series of riders which add coverage for deductibles and other benefits, every benefit will add cost.
With any insurance, the better the benefits the higher the price, and Medicare Supplement Plans are no different. What you need to do, is calculate what you want for coverage, out-of-pocket costs and what your monthly budget is. Many people really over think going into Medicare but it is a pretty simple process, the better benefits will increase the cost of Medicare supplemental insurance but somethings are well worth paying for.
Many people know that Medicare only pays 80% of Medicare approved cost, but what many do not understand is that before it pays the 80%, there are deductibles that need to be paid.
There is a Deductible for both Part A and Part B, both of these deductibles are set by CMS (Centers for Medicare & Medicaid Services). They can vary year to year and we have no control over them or when they change. When you add the coverage or riders to your Medicare supplement that will cover the deductibles, the price or premium will go up but it might be well worth it to have at least some of it covered.
The Part A Deductible Cost
The Part A (hospitalization) has a per period deductible, which is currently over $1600 per benefit period. A benefit period is 90 days, which means that if you go into the hospital and are released but are readmitted 93 days later you would be responsible for another deductible. This is the most expensive rider due to the cost of the deductible but in my mind, it is well worth the money due to the risk.
The Part B Deductible Cost
The Part B (Doctors/Durable Goods) has a deductible that is small in comparison to most other things. It is currently $226 for 2023 and we recommend that you pay this one out of pocket. The difference in yearly premium when you have this covered is usually more than what the deductible would cost you if you just paid it.
As you add these benefits (riders) your coverage does get better, but the cost of your Medicare supplemental insurance does increase.
Additional Benefit Costs
Part B Excess Charges
The Part B excess charges are applied when you have a doctor that is willing to take Medicare payment but is not ASSIGNED by Medicare. It is a charge of up to 15% that can be added to the Medicare approved costs. If this rider or coverage needs to be added is up for discussion.
Many reports put the percentage of doctors that accept Medicare assignment between 93 and 96%. Which puts the chances of it happening on the low end of the scale. When you are going to see your regular doctor or a doctor that you are very familiar with it is easy enough to verify if they accept assignment.
It’s when you go to a specialist or to a doctor that you are more apt to be charged the excess fees. What I do not like is that during these times you will not know until it is to late and you have already been billed that the excess charges have been applied.
Foreign Travel Costs
This rider is one that I really do not like to see people go without. Medicare does not have any coverage outside of the U.S. and you never know when you might want to sit on a beach somewhere. This is the lowest cost Wisconsin Medicare supplement rider there is, around $1.00 per month, it has a very small deductible of about $200.00 and covers 80% for services.
For the most benefits for the least amount of cost, we recommend you get the base + riders:
- Part A Deductible Rider
- Part B Excess Charges Rider
- Foreign Travel Rider
- Home Healthcare Rider
Part B Co-Insurance Costs
Part B co-insurance costs are the co-pays that can be charged if you do not have the covered by your Medicare supplement. They top out at a maximum of $20.00 per doctor visit and $50.00 for Emergency Room services.
Reducing Medicare Supplement Costs
Many companies offer a discount for living with another person, because studies show that people living with someone are happier and healthier.
The fact that you need to know when looking at the cost of Medicare supplemental insurance, is that some companies offer the discount only if you and your spouse have the same Medicare Supplement. Other companies offer the discount if you are living with someone, does not have to be a spouse, could be a significant other or even an adult child.
I refer to the discounts as a “spousal discount” where both need the same supplement and a Household discount where the person getting the supplement needs to only be residing with someone.
The household discount does have certain restrictions with some companies, the person you are living with might have to be over 50 or some other details that will vary by company.
I hope this helps explain some of the things that will affect the cost of Medicare supplemental insurance. We are to answer any question you might have and discuss how to get the most coverage for your premium dollar. Call us anytime at