NJ Life & Health Insurance Group
  • Ken Connolly

Medicare is a Federal Program. Why Do Costs Vary So Much Depending On Your Zip Code?


If you’re over 65, you’re probably familiar with Medicare by now. You’ve gotten hundreds of letters, you’ve gotten dozens of calls, and you’ve seen one too many Joe Nameth commercials. But even with an abundance of Medicare information, many are still confused about how the program works.

One of the calls we get all the time is “Why does my uncle/cousin/grandma have a Medicare plan that costs less than mine?”. People also wonder why some plans have seemingly more benefits and coverage than others. There are many options for Medicare, and the plan you choose as well as your location and prescription drug regimen are the biggest factors in the price you pay per month.

Let’s first go over the main differences in plans. If you choose a Medigap plan, also known as a Medicare Supplement, you will pay a monthly premium to the supplemental insurance provider which will in turn cover your out-of-pocket costs on Original Medicare. The out-of-pocket costs include the Medicare Part A hospital deductible, Part A hospital daily copays, Part B 20% cost sharing, provider copays, and Part B excess charges. The higher the premium, the more of these out-of-pocket costs that will be covered. A Plan G for instance, will cover every out-of-pocket cost on Original Medicare except for an annual $233 Part B deductible. A Plan N, on the other hand, won’t cover your $233 deductible and your provider copays or Medicare excess charges. These plans allow you to retain the comprehensive Hospital and Medical coverage provided through Original Medicare while ensuring that the vast majority of potential out of pocket costs inherent in the system are completely covered for a reasonable monthly premium.

You could also choose a Medicare Advantage Plan. These plans oftentimes have $0 monthly premiums. They also may have free dental, vision, hearing, and gym membership benefits that customers enjoy. The catch is you have to pay for your Medical and Hospital care as it arises, as in, pay as you go. So while you’re not paying the same monthly premiums, your costs will come in the form of service copays and coinsurance.

On top of the differences in price based on the plan you take, your location is a large factor. For Medigap or Medicare supplement plans, they offer the same coverage no matter where you are in the country but vary in price depending on your zip code. A Plan G for instance, is the same no matter what state you’re in. But the state you call home offers these plans at different rates that can vary greatly. A Plan G in NJ can be as low as $135 a month, while that same plan in Broward County, Florida is $237 a month. And a Plan G in New York State can be as high as $268! Second to zip code, your insurance company also plays a big role. Each company will offer the exact same Medicare supplement plan, but do so at a different price initially, and raise the rates at a different speed. Some companies increase in price much faster than others!

As for Medicare advantage plans, the zip code is what determines what plans are even available; this alters the benefits available to each person greatly! One zip code may offer a plan that another does not, leading your friend in one state to have better benefits than you in another. One zip code may offer $0 PPO plans, and one may not. This is why advertisements are always touting to “check your zip code”; there could be better plans and benefits available in your area based on your zip code. On the other hand, there may not be the benefits advertised on TV available in your zip code at all.

There are many choices you face when deciding what Medicare Plan is right for you and your family. That’s why we’re always here to answer any questions and add clarity to your decision. Talk to us about what your needs are, and we’re happy to give you an unbiased Medicare education so you can make your own decision. Contact us at 848-226-6897 to get started.

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We Do Not Offer Every Plan Available In Your Area. Any Information We Provide Is Limited To Those Plans We Do Offer In Your Area. Please Contact Medicare.gov Or 1-800-MEDICARE to get information on all of your options.

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