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How do insurance companies price Medicare Supplement (Medigap) plans?


In most cases, insurance companies use these common factors to determine price/premium for Medicare Supplement (Medigap) plans:

  1. Age
  2. Gender
  3. Zip Code
  4. Health
  5. Tobacco Use


There are also other parameters that determine the cost. There can be a wide range in the pricing or rating method that insurance companies and/or states require the use of, such as the policy type. There are three different types of ratings/policy types:  

  1. Issue age:  The premium is based on the age when it is issued. Premiums are lower for people who buy at a younger age and won’t change as you get older. Premiums may go up because of inflation and other factors but not because of your age.  
  2. Community age: Generally, the same monthly premium is charged to everyone who has this type of policy. Your premium is not based on your age. Premiums may go up based on inflation and other factors but not because of your age.  
  3. Attained age:  The premium is based on your age (the age you have attained), so your premium goes up as you get older. Premiums are low for younger buyers but go up as you get older. They may be the least expensive at first, but they can eventually become the most expensive. Premiums may also go up due to inflation or other factors.

Plan costs vary by state

Because the cost of Medicare Supplement (Medigap) plans vary by zip code, there is a huge difference in pricing from one state to another. Below are some examples of Medicare costs in three different cities. For this example, we used the following scenario to determine costs for Plan G and Plan N: Age is 65, gender is female, and non-tobacco. This is an average and there are some companies charging up to 20% more.  

Austin Texas:  Plan G ranges from about $100 – $160. Plan N ranges from about $80 – $140.  

Orlando Florida:  Plan G ranges from about $175 – $210. Plan N ranges from about $130 – $185.

Roanoke Virginia:  Plan G ranges from about $95 – $155. Plan N ranges from about $73 – $135.

Premiums: As you can see, there can be a big difference in premiums from insurance companies. Let our specialist compare pricing for you. We can compare over 25+ top-rated insurance companies at one time. Call us at 866-MEDIGAP or 866-633-4427. You can also use our “do it yourself” online application.  Get a quote – Do it yourself! 

Learn More: How much does a Medicare Supplement (Medigap) plan cost?

People Also Read: My Medicare Supplement (Medigap) premium increased, can I change my plan?

Meet Melissa MacCalla

Medicare is not simple and can be hard, frustrating, and downright confusing for most. I love when I get someone on the phone and I am given the opportunity to explain the difference in plans to them and have Medicare make sense. I enjoy talking to clients year after year, hearing about their families growing or them asking about mine.


Senior Healthcare Solutions, you truly stand out from most other insurance agents. Thank you so much for all of your help and I know that you will have nothing but success with how you conduct business.

Joan B.

Montgomery, AL

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