Finding the Best Medigap Plans
As I was driving in to the office this morning, I was thinking about how computers and the internet have changed the way we buy and sell insurance. When I first started the insurance business in 1996, we would go sit down with folks face to face. That was how people shopped for the best Medigap plans and coverage. I would have to flip through the rates of every carrier to see who had the best price for where they lived.
But with the advent of technology and computers, that has all changed. The days of you having to get dressed up and make sure the house is spiffy for a stranger to come in are behind us. You can work directly with an independent agent over an internet connection and/or phone wearing your bathrobe while sipping coffee if you want to! You don’t have to leave the house and you don’t have to let a stranger in.
Technology Has Made Things Better
I was thinking about what I miss about those days, though. I do love that we can help so many more people now. And we work all across the United States now. We are not limited by how far we are willing to drive to see someone face to face. But I do miss those times of seeing the look on a widow’s face when she realizes how much she just saved by changing Medigap companies without any change in coverage. I especially miss the times of getting a hug on the way out the door for having helped someone save so much! I love my “job” and that I get to make a living by genuinely helping people.
As an independent agency, Integrity Senior Solutions uses a software system that allows us to compare every available Medigap plan in your ZIP code side by side. Be sure to check the YouTube video at the bottom of this post for more information.
We can give you rate comparison information quickly and easily over the phone. We can also allow you to watch our computer screen as we share it to your computer or tablet screen in real time. You can see our screen, but we can’t see yours.
The Most Important Factor When Comparing Medicare Supplement Prices
Here is the biggest factor in comparing Medigap plans among the companies -- each lettered plan offers the same exact coverage from company to company. A company cannot alter the coverage in any way. Here is the official Medicare comparison chart for Medigap plans:
The chart shows what each plan covers. Each company must adhere strictly to that coverage. A company can offer extras like a Silver Sneakers membership or discounts on eyewear. But the coverage for medical care and covering the gaps in Medicare Part A and B cannot vary one bit. Massachusetts, Minnesota, and Wisconsin have different standardized plans. Click here to see how those states differ.
A side note about Silver Sneakers -- there are a couple of companies that do offer those memberships for “free” when you take their Medigap coverage. (Edit: There is now one Medicare supplement company that offers this additional benefit since AARP announced that they are dropping the program in most states nationwide) The problem is that those companies are usually $50-60 more per month than other companies for identical coverage. So it is not free. They are just rolling the cost of it into the premium in hopes that you will be enticed and drawn by their well-known brand name company.
It’s not worth it. Save on the premium and buy your own membership. Most gyms offer discount plans for adults age 60 and over. It will cost you way less than the difference in premium. Most gyms we have checked with offer memberships for anywhere from $8 -- $22 per month for Seniors, and even less per person for a couple. Planet Fitness and Gold’s Gym both have $10 per month memberships. Don’t pay $60 more for your Medigap plan to get a brand name and membership that is worth less than $22.
Pricing Difference on Medigap Plans Between the Companies
Weiss Ratings is a company that rates the financial strength of various financial entities including banks and insurance companies. In 2011, they did an exhaustive study of Medigap insurers and their product offerings. They analyzed 165 insurers nationwide and compared over 5.6 million premium rates on various Medigap plans.
The difference in rates was stunning. This is information you need to be aware of to make the best financial decision regarding your healthcare choices on Medicare. Here is a breakdown of their findings:
2011 Medicare Supplement Rate Range
Some examples of dramatic pricing differences include:
- In Florida, Plan C costs $4,647 with Humana Health Insurance Company of FL, but only $2,880 with State Farm Mutual Automobile Insurance Company, representing a 61% difference in cost.
- Plan C in California would cost $5,133 with United Teacher Associates Insurance Company, which is three times more than the $1,693 with Globe Life & Accident.
- In Maine, premiums for Plan F vary from a low of $1,916 with Globe Life & Accident to a high of $3,590 with Humana Insurance Company, representing an 87% difference in cost.
- Plan F rates in Missouri run from $955 with Old Surety Life Insurance Company to $3,002 with Standard Life and Accident Insurance Company, a 314% difference.
Medicare Says You Should Compare Plans
Every year, the Center for Medicare and Medicaid Services puts out a publication about Medicare. It is called Medicare and You. Here is page 100 from the 2016 Medicare and You book. Notice in the middle it says in bold lettering, “Different insurance companies may charge different premiums for the same exact policy.”
We Have Done the Research For You
Weiss Ratings senior financial analyst Gavin Magor commented:
“For 20 years Medigap rates have varied due to regional differences in pricing methodologies, state regulations, and the cost of health care. While we expect these differences in pricing among plans and across regions, we find that there is no justification for such wide price differences for exactly the same product in the same area. Consumers who research their options are likely to find opportunities for significant cost savings when purchasing Medigap insurance.“
You can spend hours or days doing that research on your own. Or we can do a quick comparison of all of the companies side by side for you in minutes. Call us at 1-888-228-6119 for a free consultation and comparison. We work with people like you to compare all the plans every day.
Finding the Best Medigap Company
Many people go immediately to the big brand names for buying products. People -- myself included -- look for quality when shopping around. Cheap is not always better. But that is not as necessary in Medigap insurance. Let me explain why.
As we have covered here and in other articles, the Medigap plans are standardized. A Plan F from UnitedHealthcare is identical to a Plan F from Cigna or Mutual of Omaha, or any other company for that matter. There is no need to pay more to get a popular brand. One of those companies I just named spends millions and millions every year on TV ads, spokespersons, mass mailings, blimps -- all kinds of advertising. And their high premium reflects their high advertising costs.
It is important to note that all Medigap plans are going to have potential increases in premiums from year to year. Any agent that tells you otherwise is lying to you. Run away from them. That’s why it is also important to know a company’s rate history. Some companies will close a book of business and start a new company to try to get fresh enrollees in their plans. The problem is that those old plans will still have people stuck in them and those rates will go up, up, up over time. We have seen which companies have pulled this questionable practice and can help you avoid getting caught in their trap the next time they do it.
Some companies will close a book of business and start a new company to try to get fresh enrollees in their plans. The problem is that those old plans will still have people stuck in them and those rates will go up, up, up over time. We have seen which companies have pulled this questionable practice and can help you avoid getting caught in their trap the next time they do it.
Cheaper is Not Always Better
As important as it is to stay away from the overpriced big brands, it is just as important to be wary of small companies or companies with low ratings. With the software that we use, we can see the rate increase history of every company. We also can see how long they have been in the market. And most importantly, we can see what their financial strength is.
Most of the time, we can find companies rated “A” by the rating companies that are in the top 3-4 in premium. In many cases, they will be the lowest on premium.
Having been in the Medigap business for over 21 years, I have seen small companies -- especially “B” rated companies -- come in with low-ball rates. Once those companies get some business on the books, they usually start raising the rates. Once you are outside of Open Enrollment or Guarantee Issue Periods for Medigap coverage, you will have to qualify medically to change Medigap plans.
Many times we have seen where someone took a cheap rate with a new, low-rated company to try to save a little, only to have that rate go up significantly once that smaller company sees they cannot maintain low rates and be profitable. If that person has developed any health issues, they might not qualify to move to a cheaper plan. So now they are stuck at whatever rate that company decides to go to. Their health could prevent them from taking advantage of a better price on their Medigap plan.
The Secret About Medigap Pricing the Companies Don’t Want You To Know
Check out this YouTube video below. We give a couple of real examples of how we have saved people over a thousand dollars a year for identical coverage. I also show you how our software works. You can see how we can compare all of the companies for you at one time. It is well worth a few minutes of your time to watch it.
Once you watch it, be sure to click the SUBSCRIBE button on the bottom right of the screen to find more of our teaching videos about Medicare and Medigap.
Call us at 1-888-228-6119 for your no-obligation quote and to have all your questions answered. You can also leave a question for us in the form to the right.