Original Medicare does not have an annual limit on out-of-pocket costs, and 4.5 million Medicare recipients are expected to spend more than $5,000 each on out-of-pocket health care costs in 2023. This lack of financial protection, combined with the fact that Original Medicare doesn’t cover all medical costs, has led to a lot of people buying Medicare Supplement Plans. This is because Medicare Supplement Plans fill in those gaps in coverage and financial protection. But how do private health insurance companies determine your premium? Insurance companies who offer Medicare Supplement Plans use three different pricing methods: attained-age, issue-age, and community-rated. Knowing how these prices work, can help you compare Medicare Supplement Plans and find the one that works best for you.
The Pricing Methods
The method a company uses for pricing has a significant impact on the overall cost of a policy. These 3 ratings are each based on different factors. First, we have attained age rating, which is based on the age you are when you sign up for your plan and will increase as you age. Next is issue-age rating, this method also uses your age when you enroll to determine your premium, but it will not increase as you get older. Finally, there is community-rated, which isn’t based on your age but instead is based on where you live. Below we’ve detailed each of these plans and how they work.
Community Rating
The costs of community-rated Medicare Supplement plans depend on where you live. No matter someone’s age, everyone pays the same premium for the same Medicare Supplement plan within their region, which is decided by the insurance company it can be by city or county. So, if you and your neighbor buy the same Medicare Supplement plan, your monthly premium will be the same even if you are 70 and your neighbor is 80.
Only a few states offer Medicare Supplement plans that are rated by the community. Maine, Vermont, Massachusetts, Connecticut, New York, Arkansas, Minnesota, and Washington are some of these states. States that don’t offer community-rated plans may charge you a higher premium based on your age, depending on whether they offer attained-age or issue-age-rated plans at enrollment. Most of the time, community-rated plans have the least expensive premiums, but rates may be different depending on where you live, whether you live in a city or a rural area, among other things.
What States Have Community-Rated Medicare Supplement Plans?
In these eight states, the monthly premiums for Medicare Supplement policies must be based on the community rating:
Arkansas
Connecticut
Massachusetts
Maine
Minnesota
New York
Vermont
Washington
Issue Age Rating
The premiums for issue-age-rated plans are based on how old you are when you sign up for coverage, similarly to attained age but they do not incrementally increase with age. For example, if you sign up for a plan at 65 your initial premiums will be less than if you signed up at 75. Most of the time, issue age plans also raise rates every year, but the rate increases are not based on your age like attained-age premiums are. Instead, they raise based on inflation and other factors that affect health costs.
If you sign up for this type of plan when you first become eligible to buy a Medicare Supplement plan, it costs less in the long run than plans for people who are older. But you should be aware that issue-age-rated plans start with higher premiums than attained-age-rated plans.
The issue-age method is used to rate Medicare Supplement insurance policies in the following states:
In these states, however, carriers may opt to use community ratings instead through an appeals process.
Attained Age Rating
Most of the time, Medicare Supplement insurance companies use attained-age rating models. The age when you sign up for the plan is used to figure out how much your premiums will cost. The younger you are when you enroll the lower your premiums will be. But these premiums are not locked in for life, as you age they will increase. For example, if you’re 65 years old, the premium for a certain Medicare Supplement plan might be $130, but if you’re 75, the same plan might cost $170. Generally, rates go up by a small amount each year or at a designated time. These rate increases are generally decided by state health insurance agencies.
Some states, like Massachusetts, Minnesota, and Wisconsin, have different rules for coverage as well as different Medicare Supplement Plans available. While those states have different plans they do all offer the same benefits they just operate in slightly different ways and have different names. If you live in one of these states, you can look at our state-by-state Medicare Supplement guide to find out exactly how your plans will be priced.
States that Offer Attained-Age Medicare Supplement Plans
No state requires carriers to offer Attained-Age Medicare Supplement plans. However, any state that is not required to specifically use a certain method is allowed to offer attained-age plans. There are many states that offer this pricing method but they can also offer any of the other methods as well. These states are:
Choosing Between Attained Age, Issue Age, and Community Rating
When choosing between attained-age, issue-age, or community-rated plans, there are a few things to think about, such as:
Your medical needs as a whole
Costs and benefits of the plan
Your age
The plan provider’s reputation
Premium cost rate projections
Different states have different levels of protection for Medicare recipients who want a Medicare Supplement plan. One such right to be on the lookout for is ‘guaranteed issue’ protections. With these rights, a Medicare Supplement insurance company can’t turn you down if you meet certain requirements. Such as, you suddenly lost a group health plan that covered your Medicare cost-sharing, You disenrolled from Medicare Advantage within 12 months of enrolling, or if your previous insurer no longer offers your Medicare Supplement Plan or commits fraud. They also promise to cover pre-existing conditions and won’t raise your premiums too much because of your health.
The easiest time to join a Medicare Supplement plan is during your six-month Medicare Supplement Open Enrollment Period, which starts when you sign up for Medicare Part B. After this initial enrollment period, Medicare Supplement plan providers can turn you down for coverage if you already have a health problem.
For example, if you drop your Medicare Supplement attained-age-rated coverage because it’s too expensive, you might not be able to buy another Medicare Supplement plan unless your state has continuous guaranteed issue rights or you meet other requirements. The states that have continuous guaranteed issue rights are Connecticut, Maine, Massachusetts, and New York. Continuous guaranteed issue rights mean that all Medicare Supplement providers must sell policies at least once a month or all year long.
Before you sign up for a Medicare Supplement plan, it’s important to know the rating category so you can figure out how much your long-term premiums will cost.
What Else Affects Medicare Supplement Plan Costs?
Medicare Supplement premium prices can be affected by a number of other things. Rates can be affected by things such as the rate of inflation, the state you live in, the cost of health care, and your lifestyle. Lifestyle factors can include choices like smoking or drinking.
The plan benefits that you want to include will also affect the price of your plan. The cost of the plan will be higher if it has more benefits. Your premiums will be less if you choose a plan with a higher deductible. In order to choose the best plan, you should carefully look at your health care needs and how much each plan will cost in the long run.
How To Lower Medicare Supplement Plan Costs
There are other ways to lower your Medicare Supplement premiums besides researching your options and comparing different insurance companies, such as:
High deductible plans – This could be a good choice if you are in good health and think you could pay more for the few claims you make.
Getting a plan for your partner – Some companies give a Medicare Supplement Household Discount to couples who both buy Medicare Supplement policies from them.
Bundling – Companies may lower the cost of your Medicare Supplement premiums if you buy another type of insurance from them, like life insurance.
It’s important to understand your pricing plan, whether you’re signing up for Medicare Supplement for the first time or you already have a policy. As a customer, if you know how companies charge for their services, you can make better decisions about what to buy. Be sure to do your research, and you might be surprised by how much you can save.
Working With EZ
If you are in the market for a Medicare Supplement Plan, one of the most important things you can do is compare the various plans’ premiums and benefits. This can require a significant amount of research, which can take a notable amount of time because you will need to call a number of different insurance companies in order to get quotes.
However, if you collaborate with an EZ agent, you can reduce the amount of time it takes to compare prices by 50%. When you work with a licensed agent, you gain access to a centralized resource where you can compare the Medicare Supplement Plan offerings of multiple insurance companies.
In addition to providing you with price comparisons, your agent can also explain the distinctions between the various plans. Your insurance agent will be able to assist you in comparing the out-of-pocket costs to the monthly premiums so that you can select the strategy that will save you the most money in the long run. Give us a call at 877-670-3602 to get started with your search for a Medicare Supplement Plan.
Medicare tax is a federal payroll tax that contributes to Medicare funding. All U.S.-based workers are required to pay Medicare tax on their wages. In accordance with the Federal Insurance Contributions Act (FICA), the tax is grouped together. When reviewing your paycheck, the Medicare tax and Social Security tax may appear as a single deduction for FICA.
The Medicare tax was established in 1966 to solve a health care problem: after retirement, the income of many seniors declines while their health care needs increase. Before Medicare, however, the cost of insurance became unmanageable, and some retirees’ policies were terminated due to their age. There are numerous components to the Medicare program, but at the time, the working population was required to pay a new Medicare tax to support Medicare hospital insurance. Below we’ll take a look at how Medicare taxes work.
How Medicare Tax Works
Medicare tax is a two-part tax: a portion is automatically deducted from your paycheck, and the other portion is paid by your employer. The tax is based on “Medicare taxable wages,” which is calculated by subtracting pretax health care deductions such as medical insurance, dental, vision, and health savings accounts from your gross pay.
Your employer is required to collect tax, and it electronically deposits both the employee and employer versions to the IRS on a regular basis. Self-employed individuals pay a Medicare tax as part of their self-employment tax. Instead of being deducted from a paycheck, the money is paid quarterly through estimated tax payments.
Medicare Tax Rate
When the Medicare tax was first introduced in 1966, the tax rate was 0.7% of an employee’s wages, with the employer and employee each paying 0.35%. The rate has since gone up considerably. In 2023, the Medicare tax rate is 2.9% which is still shared equally between the employer and employee. W-2 employees pay 1.45% towards the Medicare tax and their employer covers the remaining 1.45%. Self-employed individuals must pay the full 2.9% in full because they are both the employee and the employer.
Medicare Surtaxes
To fund the Medicare expansion, the Affordable Care Act imposed 2 Medicare surtaxes in 2013: The additional Medicare tax and the net investment income tax. Both surtaxes apply to high-income earners and are specific to distinct income types. It is possible to be subject to both of these surtaxes.
Additional Medicare Tax
The additional Medicare tax only applies to income above $200,000 ($250,000 for joint tax filing and $125,000 for married taxpayers filing separately). The additional Medicare tax rate is 0.9%. For example, if you earn $225,000 per year, the first $200,000 is subject to the standard 1.45% Medicare tax, while the remaining $25,000 is subject to the 0.9% additional Medicare tax. Similar to the initial Medicare tax, the surtax is withheld from an employee’s paycheck or paid through self-employment taxes.
Net Investment Income Tax
The net investment income tax, also known as the “unearned income Medicare contribution surtax”, imposes an additional 3.8% tax on net investment income as of 2023. As with the additional Medicare tax, no employer contribution is required. Net investment income can include taxable interest, dividends, nonqualified annuities, capital gains, and rental income. It excludes income that is already excluded for income tax purposes, such as interest on tax-exempt municipal bonds.
Net investment income tax is applied to your net investment income or the excess modified adjusted gross income (MAGI) over certain thresholds, whichever is less. Suppose, for example, that a married couple joint filing earned $225,000 in pay. The couple received an additional $50,000 in investment income during the same year, bringing their MAGI to $275,000. The tax threshold on net investment income for married couples filing together is $250,000. The couple would pay the 3.8% tax on the lesser income which would be the excess MAGI at $25,000 and not the total investment income which was $50,000. In this situation the couple would owe $950 in net investment income tax (3.8% x $25,000).
What Is The Medicare Tax Used For?
The Medicare tax funds Medicare Part A, which provides health insurance for those 65 and older, those with disabilities, and those with certain medical conditions. Medicare Part A, also known as hospital insurance, pays for hospital stays, skilled nursing care, hospice care, and certain home health services. The tax collected for Medicare accounts for 88% of Medicare Part A’s total revenue.
What Is The Additional Medicare Tax Used For?
The additional Medicare tax paid by high-income earners is used to offset the costs of the Affordable Care Act, according to the IRS. The funds are used to pay for provisions of the ACA, including the provision of tax credits for health insurance, to make health insurance more affordable for over 9 million individuals.
What Is The Medicare Trust Fund?
Medicare trust funds are what provides the money to fund Medicare beneficiaries. It is primarily made up of 2 funds:
Hospital Insurance Trust Fund (HI) – This fund finances Medicare Part A, which covers hospital stays, skilled nursing facilities, and hospice care for eligible beneficiaries. The fund’s primary sources of revenue are payroll taxes and Social Security benefits taxation. In addition, this fund and the Railroad Retirement account contribute to the annual revenue.
Supplemental Medical Insurance Trust Fund (SMI) – This fund finances Medicare Part B, which covers physician services, essential medical supplies, and a portion of the more recent Medicare Part D prescription drug program. This fund’s primary revenue source is beneficiary premiums, and it does not require a sizable amount of reserves.
Can I Opt Out Of Medicare Tax?
A religious exemption is possibly the most common way to avoid paying FICA tax. Members of recognized religious organizations that oppose accepting Social Security benefits are permitted to opt out. Although the rules and reporting requirements are very strict. The IRS outlines the rules, including the need to submit forms 4631 and 8274. So, don’t get any ideas about starting a religion just to avoid these taxes. The religious organization must have existed since 1950 and be able to demonstrate that its members have a sufficient standard of living during that time.
There are additional, even less likely ways to afford paying FICA. In some cases, these include nonresident aliens and income from student employment. The student exemption only applies to the student’s school-related employment. They must also be enrolled in the school where they work for their income to be exempt from taxation. The IRS has clarified the student-employee exemptions, restricting its eligibility. There may be a few other rare exemptions, such as for the children of family-owned businesses. Some participants in state and local pension plans may also be exempt from Social Security tax. Some of these employees are not covered by Social Security, and therefore do not pay FICA taxes.
What Wages Are Subject To Medicare Tax?
Medicare tax applies to all taxable employment income. This includes a variety of income sources, including salary, overtime, paid time off, tips, and bonuses. There is no limit on the amount that is taxed; all taxable income is subject to Medicare tax. Medicare wages may exclude certain pretax deductions, while others are included. Pre-tax medical insurance premiums and contributions to a health savings account are not taxed. However, Medicare tax is assessed on retirement account contributions and life insurance premiums, despite the fact that these funds are exempt from federal income tax.
Medicare Premiums
If you never paid Medicare taxes it doesn’t mean you can’t sign up for Medicare when the time comes. It just means that you will have to pay a premium for Medicare Part A, which is normally free thanks to those Medicare taxes. As of 2023, if you don’t qualify for free Part A, the premiums can cost up to $506 a month. This also applies if you were unemployed for at least 10 years (40 quarters). Typically, you won’t be eligible for premium-free Part A insurance in this circumstance. However, if your spouse is eligible for free Part A and you meet citizenship and residency requirements you can also be eligible for free Part A.
FAQs
What is a Medicare deduction on my paycheck?
If Medicare is deducted from your paycheck, it indicates that your employer is fulfilling its payroll obligations. This Medicare Hospital Insurance tax is a mandatory payroll deduction that funds health care for seniors and individuals with disabilities.
What if my employer didn’t withhold FICA taxes?
Employers who violate tax laws by failing to withhold FICA taxes for Social Security and Medicare could face criminal and civil penalties. Check with your employer to ensure there was no error or that you did not claim exemption on your W-4 form if you discover that no taxes have been withheld. You may be required to pay a tax penalty at the end of the year if you underpaid.
What is a Medicare benefit tax statement?
This statement confirms that you are enrolled in Medicare Part A and have health insurance that meets the requirements of the Affordable Care Act. This form, also known as a 1095-B, can be used if the IRS requests verification of your health insurance coverage.
Working With EZ
Due to the Social Security and Medicare taxes, your net pay may not be as high as you would like. Nonetheless, these taxes provide you with retirement insurance. You can enroll in Medicare even if you have not paid enough Medicare taxes over your lifetime. Just be prepared to pay the Part A premiums that other seniors will receive for free. Medicare is beneficial, but it can be confusing. However, you will still need to make decisions regarding your healthcare after enrollment. Speak with an EZ representative who can explain everything and tell you how to sign up.
EZ can help you enroll in Medicare, purchase a Medicare Supplement Plan, or simply weigh your options. Our agents work with the nation’s top insurance providers. They can provide you with a complimentary comparison of all local plans. We will discuss your medical and financial needs and assist you in locating a plan that meets all of your specifications. Simply call one of our licensed agents at 877-670-3602 to get started.
If you are a Medicare recipient or are about to become one, you may have noticed that Original Medicare (Parts A and B) does not cover all of your medical costs. Therefore, you will likely need a Medicare Supplement Plan to help cover out-of-pocket expenses. The good news is, you have plenty to choose from, there are 10 different plans available all with different levels of coverage. However, Plan G and Plan N are currently the most popular. Choosing between these two plans can be hard because they do have a lot in common, in fact they have more similarities than differences. It is essential to understand what each plan covers. Being misinformed can leave you with extra unnecessary out-of-pocket costs. So, let’s compare these plans so you can get an idea of which one fits you better.
What Both Plans Cover
Medicare Part A deductible– In 2023, if you are hospitalized for inpatient care, you have to pay the Part A deductible of $1,600 per each 60-day benefit period. The Benefits period restarts after you have been out of the hospital for 60 consecutive days. This is not an annual deductible, you could end up paying this deductible more than once in a single year. Having these plans cover this deductible means it’s not coming out of your pocket.
Part A hospital care and coinsurance – Part A partially covers hospice care leaving you copays or coinsurance. Certain prescription drugs will also have a copayment. However, you will be responsible for all of these copayments without a Medicare Supplement Plan that covers them.
Part B coinsurance – Medicare Part B requires a coinsurance payment for each covered service. Meaning Part B will pay 80% of the Medicare-approved amount for each covered service. Leaving you to pay the remaining 20% as your coinsurance payment (after you meet your annual Part B deductible). Plans N and G will both cover 100% of the Part B coinsurance.
Blood – If you need a blood transfusion for any reason, Original Medicare will only start covering the pints of blood after you have already paid for the first 3. Plans G and N will cover those first 3 pints for you so you’ll never have to pay for blood.
Skilled Nursing Facility Care – Medicare Part A will require you to pay a daily coinsurance if you are admitted for more than 20 days. As of 2023, your coinsurance could reach up to $200 a day. Thankfully, Plans G and N cover this coinsurance entirely.
Foreign Travel Emergencies – Typically, Original Medicare does not cover any medical care that you receive outside of the U.S. Plans G and N will both cover 80% of the costs of qualifying emergency medical care if you need it outside of the country.
What Neither of Them Cover
The only benefit that both of these plans will not cover is the Part B deductible. This is because of the Medicare Access and CHIP Reauthorization Act, or MACRA. This law altered Medicare with a modification to regulations that say plans are not allowed to offer any first-dollar coverage. This is also why Plans C and F are no longer available to new Medicare beneficiaries because both plans offered the Part B deductible coverage.
The Coverage Differences
Now that we know what benefits these plans both have in common, let’s look at the differences between them.
Benefits
Doctor Visit Copays – While Plan G will cover 100% of doctor visit copays, Plan N will not. With Plan N you will still have a $20 copay for each doctor’s visit. Therefore, if you visit your doctor fairly often this could really add up over the course of the year.
Emergency Room Copay – First, keep in mind that visiting the emergency room and being admitted are two different things. Just coming to the emergency room and then being released will cost you a $50 copay with Plan N. However, with Plan G there are no additional costs or copays for an emergency room visit.
Medicare Part B excess charges – Doctors and other healthcare providers can sign an agreement to accept “Medicare Assignment”. Which is essentially a fee schedule between Medicare and the provider saying that Medicare believes services should cost a specific amount and the doctor agrees to accept those prices. If the healthcare provider does not sign this agreement then they are allowed to charge up to 15% more than the Medicare-approved amount. That 15% is what is known as the Part B excess charge. Excess charges are one of the most significant coverage differences between Plan N and G as it could leave you with significantly higher medical expenses if it’s not covered. Plan G covers 100% of these excess charges whereas Plan N doesn’t cover them at all.
Costs
Cost is another difference, obviously even though the coverage differences are slight any plan with more benefits will be more expensive even if it’s only by a small margin. The price of Medicare Supplement Plans vary based on your location, age, and smoking status. In areas with higher costs of living, monthly premiums are generally more expensive. In general, Medicare Supplement Plans are priced in three ways: community-rated, issue-age-rated, and attained-age-rated.
Community-rated
Everyone, regardless of age, who has the same Medicare Supplement Plan pays the same monthly premium under this pricing structure. Your premiums may increase due to inflation and other factors but never due to your age.
Issued-age-rated
With this structure, your Medicare Supplement Plan premium is baked on your age at the time you purchase it. The younger you are the lower your premiums will be, and they will not increase with your age. Just like with community-rated, these plans will only ever become more expensive due to inflation and other outside factors but not your age.
Attained-age-rated
This type of pricing will calculate your premium based on your current age and does increase as you get older. Your premiums will be lower when you’re younger, but will steadily rise with your age. Increases can also happen due to inflation and other factors as well as your age.
Having Said that Plan G premiums range between $100 and $300 on average. Now, if you’re interested in a Plan G plan but the premium is a bit too expensive there is an alternative. Plan G also has a high-deductible version that offers all the same benefits with a lower premium. In exchange for the lower monthly cost you have to meet a higher deductible than you would with the standard Plan G. As for Plan N the average premium is between $120 and $180 as of 2023. When you factor in all the variables that can affect your premium Plan N can cost as low as $70 or be as expensive as $400.
So Which One Is Better?
The answer to this all depends on you. But in our opinion Plan G is the most valuable. Compared to Plan N, it provides the most coverage and saves you a significant amount of money. However, if you don’t need to visit your doctor frequently, you may easily be better off with Plan N. Overall if you’re a healthy person on a tight budget Plan N does have fantastic benefits. Although, even if you only visit the doctor a few times a year, Plan G does offer that extra bit of protection for only a little bit more money. With Plan G the only out-of-pocket Medicare cost you have to worry about is the $226(2023) Part B deductible.
How To Enroll
The best time for you to enroll is during your Medicare Supplement Open Enrollment Period. This is because if you enroll during this time you automatically receive guaranteed issue rights. Meaning you can’t be denied coverage or charged more due to your health or any pre-existing conditions. You only get one Medicare Supplement Plan Open Enrollment Period, so it is important to make use of it while you have it. The Medicare Supplement OEP begins once you turn 65 and enroll in both Medicare Part A and Part B; it continues for 6 months.
Need Some Help?
Financial planning and figuring out which benefits you need and don’t need can be time-consuming and frustrating. That’s what EZ.Insure is here for. A Medicare agent can do all of that research and compare plans for you. As well as take the time to get to know your budget and explain everything that will affect you personally. This means you’ll have professional help ensuring you get the best coverage. EZ.Insure provides you with your own personal agent. You’ll never have to worry about bouncing from agent to agent, yours will always be there to answer your questions, compare plans, and enroll you all for no extra cost. They can even help you after you’ve enrolled by reviewing your coverage annually or helping submit claims. To get started with your agent today simply enter your zip code in the bar below or give us a call at 877-670-3602.
Medicare Supplement Insurance fills in the “gaps” left by Original Medicare by paying for things such as copayments, deductibles, and coinsurance. A high deductible choice is available with some Medicare Supplement policies. The premiums for high-deductible Medicare Supplement Plans are lower than those for regular plans, but the coverage threshold is higher. If the premium difference between the high-deductible and the standard plan is small, then the high-deductible plan may be more cost-effective.
Which High Deductible Medicare Supplement Plans Are Available?
Both Plan F and Plan G have a version with a high deductible. Beneficiaries who became eligible for Medicare after 2020 will no longer be able to get Plan F, or its high deductible option. But anyone can sign up for Plan G with a high deductible.
The only exception is in Massachusetts. Massachusetts is one of 3 states who standardize their Medicare Supplement Plans differently than the rest of the country but they do have the same benefits. In Massachusetts there are only 3 plans available and none of them are high deductible plans.
How Do High Deductible Medicare Supplement Plans Work?
In the majority of states, residents can choose from one of 10 different Medicare Supplement Plans designated by letters. The government sets the benefits for each type of plan. High-deductible options are limited to Plans F and G. The only difference between the standard and high-deductible versions of these Medicare Supplement Plans is the date on which coverage will begin. While standard plans pay for their benefits right away, high deductible plans don’t begin paying for them until the annual deductible is met.
What Do High Deductible Medicare Supplement Plans Cover?
The high deductible versions of Plan F and Plan G cover the same things as their standard counterparts. Plan F is the most popular Medicare Supplement plan and has been for a long time, even though it is unfortunately discontinued. Your only out-of-pocket expense with this plan is the monthly premium for Plan F, as it covers everything else. It covers:
Deductibles for Medicare Part A and Part B
Medicare Part A and Part B coinsurance or copayments
Medicare Part B excess charges
Skilled nursing facility coinsurance
Foreign travel emergency expenses up to plan limits
Since Plan F was discontinued, Plan G has become extremely popular among Medicare beneficiaries and is now among the most widely selected Medicare Supplement Plans. Plan G is the most affordable Medicare Supplement plan and helps fill in the gaps that Original Medicare doesn’t cover. Plan G covers:
Medicare Part A deductible
100% of hospice copayments and coinsurance
Additional foreign travel emergency benefits
100% of Medicare Part B excess charges
How Much Do High Deductible Medicare Supplement Plans Cost?
With a high-deductible Medicare Supplement Plan, you are responsible for both the premiums and the deductible. In 2023, the deductible for high-deductible Plan G and Plan F is $2,700, however it changes yearly. The plan’s premiums vary from person to person. According to Medicare.gov, the premiums for Medicare Supplement Plans are determined by private health insurance providers and can vary depending on a person’s age, gender, geographic location, tobacco use, and health history.
The premiums for high-deductible Medicare Supplement Plans are lower than those for standard Medicare Supplement Plans because members are responsible for paying the deductible before the plan begins paying for covered services. A new Medicare beneficiary of age 65, for instance, may be charged $105 per month for the standard version of Medicare Supplement Plan G, while the high-deductible version may cost only $35 per month from the same insurer. As you get older, the premium gap between the regular and high deductible plans can widen. A Medicare recipient who is 85 might pay $195 per month for Medicare Supplement Plan G, with a low deductible and $60 per month for a high deductible version of the same plan.
Advantages and Disadvantages of High Deductible Plan G
The best thing about a high-deductible health plan is the low monthly premium. People who think they will only need preventive care can save a lot of money. Also, once the deductible is paid, the benefits are the same as with plan G.
A disadvantage of the High-deductible Plan G is that you have to pay the Part B deductible for Medicare for non-hospital care. Also, you don’t get insurance benefits until you’ve paid your annual deductible. Every year, these deductibles start over and usually go up. And, you’ll have to pay the Part B coinsurances until your deductible is met.
Advantages and Disadvantages of High Deductible Plan F
Unfortunately Plan F is no longer available to anyone you became eligible for Medicare on or after January 1st 2020. This is because the Medicare Access and CHIP Reauthorization Act of 2025 included a change that says Medicare Supplement Plans can not cover the Part B deductible. However, if you were eligible before that date or already had Plan F you are still able to keep or purchase it.
As with any option with a high deductible, the main benefit of a high deductible is a lower premium. Once the deductible is paid, the benefits are the same as Plan F. The biggest problem is that if health problems worsen, they can lead to an increase in medical bills. Also, the deductible can change every year, which makes it hard to plan for medical costs in the future.
Is A High Deductible Medicare Supplement Plan Worth It?
When the combined cost of your premiums and deductible is less than the premiums for a standard Medicare Supplement plan, the high-deductible plan makes more financial sense. There are three things you’ll need to consider.
1. If You Can Meet The Deductible
If you’ll spend enough on coinsurance, copayments, and deductibles to meet the Medicare Supplement deductible for a high-deductible Medicare Supplement plan, you should compare quotes to see which one is the most cost-effective. For the high-deductible version to cost less than the standard option, the lower premiums must be more than enough to cover the extra cost of meeting the deductible- remember you have a high deductible. In 2023, the deductible for Medicare Supplement plans will be $2,700, which equates to $207.50 per month. For you to spend less on a high-deductible plan overall, its monthly premiums would have to be at least $207.50 less than those of a standard plan.
2. If You Can’t Meet The Deductible
When you are reasonably confident that you will not be able to meet the deductible, selecting a Medicare Supplement plan with a high deductible is not the best option for you. If you have expenses that are lower than the deductible, the plan will not pay for any of the services that you receive. You are, in all respects, not compensated in any way for the premiums that you pay.
3. If You’re Unsure If You Can Meet The Deductible
If this describes your situation, one way to figure out whether or not a high-deductible Medicare Supplement plan is right for you is to evaluate your current financial standing. Then determine how much money you have available to pay for out-of-pocket medical expenses. When you do not end up meeting the deductible, you will not only be responsible for the cost of the premiums, which are typically quite affordable. But you also run the risk of losing coverage that is available with a standard Medicare Supplement plan. If you are able to meet the deductible, you will be covered from that point. Which will help you limit the amount of money you will have to pay out of pocket in the event that you face unexpectedly high medical costs.
Alternative Options
Another choice for Medicare Supplement coverage that could help you save money on your monthly premiums is the Medicare Supplement Plans K and L. A cost-sharing benefit and out-of-pocket spending caps are included in these plans. A Plan N could be beneficial to you if you want more coverage than what is offered by those two options. In exchange for a few copayments, participants in Plan N pay a premium that is marginally lower than the standard Plan G or Plan F premium.
One more alternative to consider is enrolling in a Medicare Advantage plan. Because the monthly payments are so much more affordable. On the other hand, considering the ongoing out-of-pocket costs that come in the form of copayments and coinsurance, a Part C plan might end up being more expensive in the long run.
Sign Up With EZ
Whether you’re looking for a high-deductible plan or something else, we can help you choose the right policy. We’re here to make it easy for you to weigh your options and choose the most beneficial arrangement possible. Working with an EZ agent will cut down time spent shopping around. You can compare and contrast numerous Medicare Supplement Plan providers and plans by working with a licensed agent. In addition to providing you with cost comparisons, your agent can explain the nuances between the various plans. Furthermore, your agent can assist you in comparing premium costs to out-of-pocket expenses to help you choose the most economical plan. Get started on your search for a Medicare Supplement Plan by calling us at 877-670-3602 right away.
Medical underwriting is a process health insurance companies use to decide how risky you are to insure and how much your premium should be. If you’re eligible for Medicare and want to also add a Medicare Supplement Plan to your Original Medicare coverage, the private insurance company you choose may require you to go through underwriting before you can buy your policy.
Underwriting can be complicated, and each insurance company handles it differently. To help you understand we will go into detail about why companies underwrite, how it works, and when it applies. We’ll also talk about health conditions that will get your application turned down so you know what steps to take if you are.
Underwriting Basics
Underwriting is how insurance companies find out about your health and decide if they want to take on the financial risk of insuring you. It requires a thorough look at your health history, both on the application and in a follow-up phone interview. If a company thinks you have too many expensive health problems, they can refuse to cover you, limit your coverage, or raise your rates.
Insurance companies underwrite people to keep premiums and risks as low as possible and maintain stability. However, limiting access to Medicare Supplement Plans could mean that the people who need the extra coverage the most don’t get it. Logically, if a company takes on more people with expensive health problems, it will have to pay out more money for claims. To make up for the difference, the insurance company would either charge higher premiums or not let those people on the policy at all.
The federal government sets standards for the different types of Medicare Supplement plans and gives enrollees some protections in the form of guaranteed issue (GI) rights, but they have no control over how insurance companies decide who to accept as a customer. Carriers don’t always agree on what makes an applicant uninsurable.
What Triggers An Underwriting Process
If you want to switch from one Medicare Supplement Plan to another, or switch from Medicare Advantage to Original Medicare and you’re not eligible for IEP, then you’ll trigger the underwriting process. You’ll have to answer a lot of questions about your health. The insurance company can also send you to a doctor or nurse for a medical exam to get a better picture of your current health.
You can change from one Medicare Supplement Plan to another any time of year, but you’ll have to be in good enough health to pass underwriting. To return from a Medicare Advantage (MA) plan to Original Medicare with a Medicare Supplement Plan, you’ll have to wait until the Medicare Annual Enrollment Period, from October 15 to December 7, and pass underwriting.
Underwriting Timeline
Underwriting takes time, so we recommend sending in applications two to three weeks before the date you want the policy to start. This will give the underwriter time to look over the application and talk to you on the phone. We’ve found that the underwriting process takes, on average, between seven and ten days, but it could take as little as one day or as long as thirty days. If underwriting takes longer than expected and your application doesn’t start on the first of the month you asked for, the insurance company will either backdate it to the original start date or move it to the first of the next month automatically. If this happens, you should check in with the carrier in case you need the original start date, but the carrier automatically moves it to the next month.
Some companies have started using an auto-accept or auto-reject feature in their online applications, but this only works for clear-cut cases where there is no room for confusion. To get an automatic acceptance, an applicant would have to say “no” to every health question and be in great health. Applicants whose answers lead to a “maybe” will have to talk to an underwriter over the phone for further explanation and complete the underwriting process.
How Underwriting Affects Your Premiums
Depending on the carrier, the results of underwriting can cause premiums to increase. Some companies have less strict rules for underwriting, which means they accept applicants with worse health conditions but raise the premium to make up for it. Applicants with more health problems may be put in another pricing tier called “class” or “level.” Companies use this system to try to find a good balance between keeping premiums from going up too much and giving a lot of people access to the policy.
What Conditions Can I Be Denied For?
Companies that offer Medicare Supplement insurance are more likely to charge you a higher premium than to turn down your policy. However, they can still turn down your application. No matter which company you choose, you may not be able to get Medicare Supplement insurance if you have a certain health condition.
Some medical conditions that often lead to a denial are:
AIDS
Activities of daily living assistance
Alzheimer’s
Atrial fibrillation
Any history of cancer
Cirrhosis
Certain cognitive conditions
Certain medications
COPD
Congestive Heart Failure
Diabetes not under control with medications
End Stage Renal Disease
Heart attack
Implantable cardiac defibrillator
Kidney failure
Multiple Sclerosis
Nebulizer use
Parkinson’s disease
Organ transplant
Osteoporosis
Supplemental oxygen use
Stroke
It’s important to remember that each company has its own rules for underwriting. If one company turns down your application, another may be willing to take on the risk. Working with one of our licensed insurance agents can help you find a “guaranteed issue” policy or a company that will accept your application even if you have health problems.
How To Avoid The Underwriting Process
During certain times when you have guaranteed issue (GI) rights, you will be able to sign up for a Medicare Supplement Plan without having to go through underwriting. During a GI period, insurance companies must sell you a policy without considering your health or any pre-existing conditions. Your Initial Enrollment Period (IEP) is the first seven months after you turn 65, this is when you can sign up for Original Medicare without being penalized.
Your Medicare Open Enrollment Period (OEP) is usually part of your Initial Enrollment Period (IEP). This is when you have a GI right to sign up for a Medicare Supplement Plan. The OEP starts on the first day of the month that you start getting Medicare Part B. It lasts for six months, during which time you can sign up for any Medicare Supplement Plan letter with any insurance company, no matter how healthy you are.
In rare cases, you may be eligible for a Special Enrollment Period, which also gives you the right to a Guaranteed Issue, where you can change your policy without having to go through the trouble of underwriting. There are also parts of the underwriting process you can avoid such as the medical exam. Some states let you change your Medicare Supplement plan without having to go through a medical exam:
Guaranteed Issue is always the case with Medicare Supplement plans in Connecticut. In this state, you have to use community rating methods. But Connecticut is one of the states where Medicare Supplement costs the most.
Beneficiaries in Maine can switch to plans with the same or less benefits during the month of June without having to go through an underwriting process.
There is an anniversary rule that lets people change companies without having to go through underwriting for 62 days. Instead of your birthday, the time is based on the date of the policy.
beneficiaries in Washington state can switch from one policy to another at any time (except for Plan A).
Does Medicare Use Underwriting?
Original Medicare doesn’t use underwriting. The federal government gives this insurance to people over 65 or who have been on Social Security disability for at least 24 months. Underwriting is not used for Medicare Advantage plans or Medicare Part D drug plans. Anyone can sign up for these insurance plans. Keep in mind you can’t have both a Medicare Advantage plan and a Medicare Supplement plan at the same time.
Comparing Plans With EZ
When looking for a Medicare Supplement Plan, it’s important to compare the costs and benefits of each one. That means you’ll have to do a lot of research, which can take a long time since you’ll have to call numerous insurance companies to – receive price quotes. But if you work with an agent from EZ, you can compare prices in half the time. Working with a licensed agent gives you access to many Medicare Supplement Plan carriers and plans in one place.
In addition to giving you price comparisons, your agent can tell you how each plan is different. Also, your agent can help you compare out-of-pocket costs with premium costs to figure out which plan will save you the most money over time. Call us today at 877-670-3602 to start looking for a Medicare Supplement Plan.
You can technically enroll in Medicare and Medicare products on your own. You can do all your own research on Medicare, Medicare Advantage, and Medicare Supplement Plans. Or you can look into all of the providers available. You can even search for quotes for these plans on your own. However, is this the best way to enroll in Medicare? We don’t think so. The issue with doing your own research is that you may not find all of the information you need. Due to years of experience, a Medicare Agent will have more information for you, including things not commonly found on the internet.
Contrary to popular belief, you don’t pay your Medicare agent. Since the insurance companies pay your agent for their services, you never pay them a dime. Your premium will also not increase just because you used an agent. So using an agent is free and absolutely no hidden fees. They are there to give you all the information you need and help you find the best options for you.
What Is A Medicare Agent
Before we dive into why you should use an agent, let’s look at what they actually do. A Medicare agent is a licensed expert who assists you in reviewing and evaluating Medicare plans and their benefits, as well as assisting you in selecting and enrolling in the best plan. There are two types of Medicare agents. The first is an independent agent. This type of agent works with numerous insurance providers and can enroll you in any of their plans. The second type is a captive agent. These agents work with one specific insurance company. EZ’s agents are independent so we can provide you with plans from all providers.
Benefits of Medicare Agent
We know it’s hard to trust that you’ll be in good hands. So, we’ve made a list of reasons a Medicare agent could be beneficial to you. Since EZ’s agents are independent we’ve based this list on the benefits of working with independent agents.
1. Expert Knowledge
Simply put, Medicare can be confusing. You can spend countless hours reading about Medicare and its products and you could get a fairly solid understanding of how it operates. However, our Medicare agents continuously educate themselves and are familiar with Medicare’s rules and regulations, which changes frequently. A simple mistake, such as missing your Initial Enrollment Period (IEP), could result in penalties or delays in coverage. Even selecting the wrong Medicare Supplement Plan can leave you with big gaps in your coverage. Meaning you’ve got unnecessary money coming out of your pocket for healthcare costs that you could have saved with the right plan. When it comes to Medicare, the devil is in the details. Our agents will ensure that you are educated and supported through your entire Medicare journey.
2. Help Choosing a Plan
Once you’re eligible for Medicare it’s not as simple as enrolling. You have some options to consider. For instance, you can choose to enroll in a Medicare Advantage plan instead of Original medicare. If you enroll in Medicare Advantage through a private insurer you’ll still have Medicare but your coverage comes directly from the Advantage plan rather than Original Medicare. Medicare Advantage can include additional coverages such as vision, hearing, dental and wellness programs. They also usually have prescription drug coverage under Medicare Part D.
On the other hand you can choose to stick with Original Medicare and then purchase a Medicare Supplement Plan and enroll in Part D on your own. Going this route also gives you these additional benefits but deciding which path to take depends on your specific needs. You need a thorough understanding of each path in order to choose the right one. There are so many factors to consider, like your budget, provider networks, and current prescriptions. Our licensed agents understand the pros and cons of both paths and as they get to know your circumstances, they can help you figure out which is the best one for you.
3. Help with underwriting
Underwriting is a process that private insurance companies use to figure out your health stats when you apply for health insurance, such as Medicare Advantage or Medicare Supplement. The process helps companies decide how much your premium will be. Our Medicare sales agents are very familiar with the underwriting application questions from various companies. Suppose you are interested in switching Medicare Supplement companies. We can match you with the company that is most likely to accept you –even if you have a medical condition that you think might make you ineligible. We’re here to find you coverage, no matter what.
4. Benefit clarity
When you’re searching for coverage or deciding what choice is best for you, you’ll mainly be looking at benefits. Our agents can help you read through all the legal jargon to find out what benefits are specifically being offered and if they’re beneficial to you.
5.Access to a variety of providers
Medicare agents work for you, not the insurance company. So we won’t just offer you plans from one source, we offer you dozens of options. We can research pricing for nearly every provider in the country for any given plan. For instance, Medicare Supplement Plans are standardized, meaning the plans all have the same benefits no matter where you live or who you buy them from. So, say you like Plan G, you can compare prices from all the available providers in your area. Why pay more than necessary for the same coverage? When you work with a Medicare agent you never will.
6. Continued service
Your relationship with your agent continues even after you enroll in Medicare. During the annual enrollment period, your agent can help you review your coverage. Then, they can help you decide if your current plan is still the best option or whether you need to make adjustments. They will then help you make those adjustments. They can also help you with any concerns or questions about your coverage no matter the time of year or how long you’ve had Medicare. Once you find an agent they are available to you the entire time you have Medicare.
7. Time saver
Working with a Medicare agent can save you a great deal of time. You won’t be stuck spending hours, days, or even months researching Medicare and looking for plans on your own. Agents can compare every plan for you quickly and efficiently. They can also answer any questions you have immediately and accurately rather than having to read through hundreds of internet searches hoping to find the answers you need and hoping the answers you find are accurate .
8. It’s free!
You don’t pay any fees to work with a Medicare agent. Using their services is completely free. You’re probably wondering, “So, how do they get paid?”. Their pay comes directly from the insurance companies. Most agents are paid commission. When they enroll you in a plan, the insurance company pays them for the first year of coverage as well as an initial sum for each year you are enrolled. Now, don’t worry, they aren’t incentivized to enroll you with a specific company. So you don’t have to worry that they’ll push you to enroll with a certain company to get more commission. They’re only motivation is getting you enrolled in the best coverage possible.
Choosing a Medicare Agent
After you provide us with some fundamental information through EZ, we will provide you with quotes and match you up with an insurance agent who is the most suitable for your circumstances. Who we match you up with depends on a variety of factors, including your location and the kind of coverage you’re looking for in a plan. We take measures to ensure that your agent is familiar with the area in which you live. This way, you won’t have to worry about being assigned an agent who lives in another part of the country and who isn’t as knowledgeable about the services provided in your area as a local agent would be.
Why Work With EZ
EZ is able to help you with enrolling in Medicare, buying a Medicare Supplement Plan, or even just answering any questions you might have. We can also help determine which options are best for you. Our insurance agents work closely with a number of the country’s most well-known and respected insurance companies. They are able to give you a free analysis and quotes that compare all of the plans offered in your area. First our agents will talk with you about your medical needs and your budget. Then we help in finding you a plan that we can help customize to fill those needs while staying well within your budget. We can actually save you hundreds of dollars a year. If you’re ready to start, simply enter your zip code into the bar below or give us a call at 877-670-3602 and we’ll get the process started right away.
When the Medicare tax was first introduced in 1966, the tax rate was 0.7% of an employee’s wages, with the employer and employee each paying 0.35%. The rate has since gone up considerably. In 2023, the Medicare tax rate is 2.9% which is still shared equally between the employer and employee. W-2 employees pay 1.45% towards the Medicare tax and their employer covers the remaining 1.45%. Self-employed individuals must pay the full 2.9% in full because they are both the employee and the employer. 
The answer to this all depends on you. But in our opinion Plan G is the most valuable. Compared to Plan N, it provides the most coverage and saves you a significant amount of money. However, if you don’t need to visit your doctor frequently, you may easily be better off with Plan N. Overall if you’re a healthy person on a tight budget Plan N does have fantastic benefits. Although, even if you only visit the doctor a few times a year, Plan G does offer that extra bit of protection for only a little bit more money. With Plan G the only out-of-pocket Medicare cost you have to worry about is the $226(2023) Part B deductible.
California
New York
