A Medicare Supplement, or Medigap, policy covers the costs or "gaps" that Original Medicare does not.

You can choose from 11 standardized Medicare Supplement health insurance plans. Each is labeled with the letters E through N. Not all Medicare Supplement plans are available in all states.

The Medicare Supplement health insurance plans are sold by private insurance companies and are subsidized by the government.

How policies are priced

There are three different methods that the companies use to price their Medicare Supplement plans:

Community rated This is where everyone in the same geographic region pays the same premiums. These policies are not as easy to find.

Attained age The premiums for these policies are based on your age and the premiums will increase as you get older. They are priced lower if you buy them when you are 65 and could be at their highest when you reach your 80s and 90s.

Issue age The premiums for these policies are based on the age you are when you enroll and do not increase as you get older.

The factors that determine the price you will pay for the Medicare Supplement that you choose include the plan you choose, where you live and your age. Medicare makes adjustments to its policies every year and the prices could go up based on those adjustments.

How to lower your premiums

You can help keep your premiums down if you:

Choose an issue-age rated plan. Enroll when you are 65 and are first eligible for Medicare.

Buy appropriate coverage for your situation and health. You can choose a plan with lower premiums but higher co-pays or higher premiums and lower co-pays. Which is more advantageous for you depends on how often you go to the doctor and how often you may be hospitalized. It's hard to know what may happen, but you have to remember that your health could deteriorate as you get older.

Work with a broker who handles multiple health insurance plans. A broker can review your options with you and help you to choose the most appropriate plan for your health and finances.

Research your options on the Web. Many websites, including the government's Medicare.gov, have lots of information on Medicare options and you can use them to compare your choices.

Buy drug coverage when you're eligible. If you don't buy drug coverage when you first enroll in Medicare, you will pay more for the plan should you need it later. It's worth considering even if you're not taking medications when you enroll because if you do need drugs at some point, and it's likely you will, you'll pay a monthly premium penalty for the drug plan.