Medicare is a federal program. Why do costs vary so much depending on your zip code?

Updated: Apr 2

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 1 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 $203 Part B deductible. A Plan N however, won’t cover your $203 deductible and also won’t cover 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 may come back to bite you later in the form of service copays.

On top of the differences in price based on the plan you take, your location is a large factor as well. Medigap plans offer the same coverage no matter where you are in the country. 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. For instance, a Plan G in NJ can be as low as $135 a month. 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!

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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