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A record number of Americans will turn 65 in 2022 according to U.S. Census data. Some 4.3 million babies were born in 1957, more than any other prior year. The number represents a highpoint that the nation won’t reach again until 2072.
Turning 65 is a significant milestone for many aging individuals. For millions it’s when eligibility for Medicare begins. Eligibility is accompanied by the need to make important decisions that can significantly impact your healthcare as well as your retirement savings and income.
Options available include just maintaining Original Medicare (Medicare Parts A and B). For some 26 million, a Medicare Advantage (Medicare C) plan was the option that makes the most sense. These are typically the plans you see advertised on television offering no-cost options and more-recently multiple new free benefits.
For nearly 15 million Americans purchasing a Medicare Supplement policy is the preferred choice. Medicare Supplement, also commonly called Medigap, fills in the gaps in Original Medicare coverage. Policies are identified with letters, such as Plan G and Plan N which are the two most popular choices among individuals turning 65.
All Medicare Supplement Plan G policies provide the exact same coverage or benefits. These plans are “standardized” in terms of coverage and amounts that the individual may be responsible for.
That said, not all Plan G policies cost the same. Insurance companies are free to charge what they want for them. And indeed they do. For that reason, the latest data from the 2022 Medicare Supplement Price Index provides valuable insights for those who’ll be shopping for Medicare plan options this year.
Significant Spread Between Lowest and Highest Medigap Prices
According to the analysis of Plan G rates, a 65-year-old woman in Dallas could pay as little as $99.24 monthly for coverage. The highest rate being charged for Plan G in the Dallas metro-area is $202.16 monthly, a $1,235 annual difference.
The industry study found that no single insurance company consistently had the lowest premium costs. Neither was any one company regularly the costliest. In some markets only 5 or 6 insurers offered Medigap plans. Typically, an individual could choose from between 10 and 20 plans from major insurance companies as well as some lesser-known names.
Lowest Medicare Supplement Costs For Top-10 Markets
The 2022 price analysis found that the lowest available cost rose nominally in 4 of the top-10 markets including New York City, Chicago, Houston and Phoenix. In 2 markets, Philadelphia and Atlanta, costs actually declined compared to the 2021 study.
Finding the best Medicare Supplement insurance coverage can be worth the time and effort. The savings can be significant in both the short and long-term. The following are the lowest monthly costs reported by the 2022 Price Index for a 65-year-old female:
- New York - $278.25
- Los Angeles - $135.00
- Chicago - $116.30
- Washington, D.C. - $104.44
- Houston - $121.18
- Dallas - $99.24
- San Francisco - $115.00
- Philadelphia - $124.51
- Phoenix - $115.52
- Atlanta - $116.36
Source: American Association for Medicare Supplement Insurance (AAMSI) 2022 Medigap Price Index; January 2022
In some markets men and women pay the same amount for coverage. In others, a 65-year-old female may actually pay less than a man. For example, a 65-year-old male in Dallas would pay roughly $10 more monthly for an identical policy.
Available Household Discounts Can Reduce Costs For Seniors
Medicare Supplement insurance companies have the option of offering discounts or adding additional charges. Policy fees range from $0 to $25 per-applicant according to the AAMSI analysis.
Of greater value is a Household Discount. This can reduce the cost significantly when both spouses have coverage. The policy analysis found that Household Discounts varied from zero percent to as high as 14 percent.
Comparing Medicare Supplement Plans
Comparing the various Medicare options can be a daunting task. While Medicare is a national program, available plan options can be extremely local. Comparing Medicare Advantage plan options with Medicare Supplement is generally recommended for most people who are joining Medicare for the first time.
Doing your own research can be time consuming and many report confusing. The American Association for Medicare Supplement Insurance makes available an online directory listing independent Medicare insurance agents by Zip Code. Access is free and private.
Allow yourself enough time to make an informed decision. Securing information from multiple sources can ensure you have the best health care coverage suited for your individual needs. It can also save you significantly for many years to come.
About Jesse Slome
Medicare Expert – Director Long Term Care Insurance Association, Medicare Supplement Insurance & Critical Illness Insurance Association