When you begin to compare Medigap premiums there are a few things you need to know. Getting the best deal means more than jumping at what seems to be the lowest monthly premium.
It’s no secret that there can be big differences in what insurance companies can charge for the same exact coverage but there are other issues at play that could cost you in the long run.
You should be aware of the different ways that Medigap premiums are determined. Medigap pricing models matter.
Some rates may be set artificially low for someone just becoming eligible for Medicare only to rise quickly year after year. While other rates may be initially higher, but more stable in the long run.
Being aware of certain resources and asking the right questions can make comparing Medigap premiums to get the best deal easy.
Be aware of these things when comparing Medicare supplements
1. Don’t make the mistake of thinking all Medicare plans are supplements. Only plans identified as “Medicare Supplement Insurance” are actually Medigap policies. This means that Medicare Advantage plans like AARP MedicareComplete are not Medicare supplements. Every year people enroll in an Advantage plan thinking that they have a Medicare supplement.
2. Know that plans A through N are all standardized plans (except in Massachusetts, Minnesota and Wisconsin where they have their own variations). Plan F from Humana will offer identical coverage as Plan F from Mutual of Omaha.
3. You can search medicare.gov to “Compare Health Plans and Medigap Policies in Your Area” to find a list of all insurance companies offering plans where you live. This is preferable to shopping with an agent that only represents one or two insurance companies.
Factors that can effect Medigap cost
There are several things an insurance company may do that can effect the cost.
- They can offer discounts ranging from; non-tobacco discount, discounts for women or those who are married as well as how you pay your premium (electronically, annually, etc.)
- Insurance companies may use medical underwriting or apply a different premium when you don’t have guaranteed issue rights.
- They can use different pricing models to determine Medigap premiums.
- They may offer you a Medicare Select policy which requires you to use certain providers that will have a bearing on premiums.
Ask about the rating or pricing model to get an idea how your rates may increase in the future. Also ask about any discounts that may vanish as time goes on, such as an early enrollment discount that decreases by a set percentage each month effectively raising your premiums.
When you compare Medigap premiums you must be prepared to ask questions. Don’t neglect to ask how you can get any additional discounts. Once you have found a company you are comfortable with you can submit an application knowing that you have done your homework and are getting the best value.