Medicare Supplement quotes can vary greatly, even with the standardization of plan coverage. In other words, even with the same coverage, claim payment system, doctor acceptance, etc., some companies charge a much higher price for their Medicare Supplement plans. In some instances, rates for “like” coverage can range by as much as $100/month and more.
Although this may seem difficult to understand – why are prices so different when coverage is the same – there are some pretty straight-forward reasons for the differences in premium and some simple principles to keep in mind when comparing quotes.
First of all, companies have the authority to set their own rates. The rates do have to be approved the state departments of insurance; however, the companies propose and set the rates. Different companies target different geographic areas, different age/gender combinations, and different plans (i.e. targeting Plan G over Plan F).
Also, different companies have different administrative costs (overhead) for running their plans/companies. This, too, can have an impact on price, as companies build in higher costs for marketing/selling their products into that product’s price.
In a more complex difference, companies set their rates in different ways. Three are several kinds of rating methodologies that companies can use – attained-age, community-rated or issue-age rated. This can determine what the rates are at different ages. It is commonly accepted that attained-age rates are lower initially, but may be higher over time. However, it is typically true that all companies/plans do go up over time, so there is no “silver bullet” for avoiding rates going up as you get older.
Keep in mind, when comparing and choosing a Medigap plan, that all companies must offer the same standardized benefits and pay claims in the same way. There are literally no variations from one company to another for “like” plans. However, rates can vary dramatically. It is most important to compare rates in an unbiased way and choose a plan that is competitively priced, if not the lowest priced for the plan you want.
If you have questions or wish to obtain a Medigap quote, please contact us online or at 877.506.3378.