How much does a Medicare Supplement cost?
Premiums vary widely for identical coverage. Here is what drives the price and what to look at besides the first year quote.
Medigap premiums vary enormously for coverage that is legally identical. In the McAllen area, quoted monthly premiums span a very wide range depending on plan letter, age, gender, tobacco use and carrier.
Because the coverage is standardized, that spread is entirely about pricing rather than about what you get.
What drives your premium
- Plan letter. Comprehensive plans like G cost more than lighter ones like N or high deductible versions.
- Age. Most Texas carriers price by attained age, meaning the premium rises as you get older.
- Gender. Women typically pay somewhat less.
- Tobacco use.
- ZIP code.
- The carrier's own pricing and claims experience.
The three pricing methods
This matters more than the first year quote and almost nobody explains it.
- Attained age. The premium increases as you age. Usually the cheapest at 65 and the most expensive at 80. Most common in Texas.
- Issue age. The premium is based on your age when you bought it and does not rise because you got older. It still rises with general rate increases.
- Community rated. Everyone pays the same regardless of age. Rare.
An attained age policy that looks cheapest at 65 can be the most expensive by 80. Ask which method a quote uses. A slightly higher issue age premium today can be the better long term purchase, and you cannot switch methods later without new underwriting.
Rate increases
Separate from age, every carrier raises rates periodically to reflect claims and medical inflation. Some carriers have a long history of moderate increases. Others price low to attract new business and raise sharply afterward.
Ask about a carrier's rate increase history over the last several years. That number tells you more about your ten year cost than the opening quote does.
See why premiums go up.
What you should compare
- The same plan letter across several carriers. Identical coverage, so it is purely a price comparison.
- The pricing method for each quote.
- Each carrier's rate increase history.
- Household discounts, which many carriers offer when two people in a home both hold policies. These are often 5 to 12 percent and frequently unmentioned.
- Financial strength ratings for the carrier.
The other half of your cost
A supplement does not include prescriptions. Budget for a standalone Part D plan as well when comparing against a Medicare Advantage plan that bundles everything.
The honest comparison is supplement premium plus drug plan premium plus the Part B deductible, against the Advantage plan's premium plus its annual out of pocket maximum. See the comparison.
Because rates vary by carrier, age and ZIP and change over time, we would rather run current quotes for your specific situation than publish figures here that go stale. See how to compare rates.
Common follow-up questions
Why is the same plan so much cheaper from one company?
Because coverage is standardized, price differences reflect the carrier's pricing strategy and claims experience, not better or worse coverage.
Will my premium go up every year?
Almost certainly, through general rate increases and, on attained age policies, through age. Ask which pricing method applies.
Is there a discount for couples?
Many carriers offer a household discount when two people in the same home hold policies. It is worth asking about specifically.
Want this looked at properly?
We are an independent agency in McAllen serving Hidalgo, Cameron and Starr counties. No cost to talk it through.
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