Best Medigap Rates

by Weiss Ratings | November 28, 2011

Medigap is supplemental health insurance that you can purchase from a private insurance company to pay for services that Medicare doesn’t cover.  You pay a monthly premium for the policy to help save money on healthcare services throughout the year.  Paying for a Medigap policy makes sense if the annual cost for the policy is less than the amount you will spend for the services Medicare won’t cover. 

You are eligible for a Medigap policy if you already have Medicare Part A for hospital services and Medicare Part B for doctor services.  Standard Medigap plans are labeled A through N and offer different levels of health coverage.  And while different private insurance companies sell Medigap policies, the benefits for each standard Medigap plan are the same.  In other words, Plan D will have the same benefits regardless of which company you purchase from. 

If you live in Massachusetts, Minnesota or Wisconsin, you’ll have different plan benefits than offered in other states.  However, within your state, benefits will be the same for each plan type. 

But, just because plan benefits are comparable, doesn’t mean prices are.  In fact, prices vary widely between insurance companies for the very same benefits.   The cost of a Medigap policy will depend on the benefits you buy, the insurance company, your age, gender, and location.  You’ll find insurers charge dramatically higher premiums in some states than in others. 

Medigap plans are intended to help pay for some of your doctor visit co-payments, coinsurance for hospital stays and other services.    You can find less expensive plans with fewer benefits or higher out-of-pocket costs.  If you’re okay paying more, you can find plans with extra benefits that will cover deductibles, routine procedures, at-home care, and more. 

If you’ve seen “Best Medigap Rates” advertised all over the radio, internet and TV lately, that’s because this is the time of year, from November 15 through December 7, for existing Medicare beneficiaries to review, renew or change their benefit plans. 

But, it’s highly doubtful that the ads you read touting those “best” Medigap rates, will actually give you a chance to select from honest-to-goodness best rates.  That’s because the advertisements are sponsored by insurance carriers or insurance agents.  And, while they may give you their best rates, it is unlikely that they will give you comparisons to plan rates they don’t sell. 

So, where can you go to actually compare Medigap plans from just about every insurance company that offers Medigap benefits?  Weiss Ratings is an independent information provider that doesn’t sell insurance.  Weiss researches Medigap rate information for over 165 insurance companies nationwide.  And, the information is presented for consumers to easily compare benefits and prices.  These plan rates are not available on Medicare.gov or on any state’s Medicare web site.

If you are just reaching 65 and newly eligible for Medicare, it’s important to purchase a Medigap plan during your open enrollment period.  Your open enrollment runs for six months beginning on the first day of the month you are both age 65 or older and are enrolled in Medicare Part B.   During your open enrollment period, you’ll be able to purchase a Medigap policy for the same price as a healthy person regardless of any conditions you may have.   

And once you have a Medigap plan, you’ll be able to renew it even if you have health problems, as long as you keep up with your premium payments.  You’ll also be able to switch your Medicare supplement  plan and provider even with a pre-existing condition, as long as you can show continuous coverage for the prior six months.  So, whatever you do, don’t drop your existing plan until you have a replacement.

Beyond those basics, the private insurance companies that sell these Medicare supplement plans set their own prices and rules for eligibility so it’s very likely you can find cost savings by shopping around.

To compare plans, you want to look at the benefit package that makes the most sense for your needs, and then compare costs.  It’s possible that you may need to reduce your benefit expectations to find an affordable plan.  Or, if you expect your healthcare costs will be high, a plan with more benefits and higher costs may still save you money.

And don’t think your research is complete without checking the financial strength of the insurance company.  You’ll want to get an independent, unbiased opinion of the institution’s financial safety — now, and in the future.  Weiss Ratings does just that by assigning a letter grade rating for each insurance carrier based on review of annual and quarterly financial statements.  Weiss ratings are designed to identify key factors that can affect an insurer’s solvency such as capital, claims experience, liquidity, investments, reserves and operating results.  As you compare benefits and costs, make sure you also take a look at the insurer’s financial health.  An insurance policy will be of no value if the company can’t pay your claims.  

Regardless of the choices you make for benefits, the odds are you’ll be able to find a less expensive insurance premium from a financially strong company, if you comparison shop.   Once you’ve done your research, don’t hesitate to call insurance carriers to get a feel for their customer service approach.  Pick a company that meets your needs for benefits, price, and financial strength — AND makes you feel like you’re the most important person in the world when you call them. 

P.S. Click here for a special message from Weiss Ratings’ founder Martin Weiss PhD.  He shares his personal experience with Medicare and  tells how you can avoid paying more for Medigap benefits than you need to.