Medigap plans are Federally-standardized. This means that the differences in the various available plans are on things other than coverage. Although the coverage is the same with one Plan F as it is with another, there are several important criteria that you can use when comparing plans to make sure that you get the best possible plan for the money.
- The first of the differences between Medigap plans is the coverage different plans offer. Note that this is different PLANS offer, not different companies. Every company is required to offer the standardized plans. For example, a Plan F with one company is the same as a Plan F with another company. However, the plans themselves do vary. Plan F is the most comprehensive plan – it covers everything that Medicare Parts A & B do not cover. From there, coverage goes down to Plan G, Plan N and other plans, which are less expensive but also lower levels of coverage.
- The second way that Medigap plans differ is the most important – price. While coverage is the same, you will notice a huge variation from one company to another even on “like” plans. One company may offer Plan F for $150/month, whereas another may offer Plan F for $100/month. This variation is normal, as different companies target different plans, geographic areas, ages, etc. Price is and should be the most important criteria when deciding on a plan.
- The next way that the plans differ is the AM Best, or financial strength, ratings of the companies. Ratings can range from ‘A+’ down to ‘D’. This is not the only criteria that should be used, as all Medigap plans pay claims through the same standardized Medicare “crossover” system. However, if price is equal or close to equal, it may make sense to go with a company with a higher rating.
- The final way that Medigap plans differ is the rating methodology used by the companies. There are three different methodologies they can use to “set” rates – attained age, issue age, and community rated. In most states, the majority of companies use attained-age (rates based on your age, and go up over time as you get older). These companies offer lower initial premiums in almost all cases. Over time, all of the companies’ rates are going to go up, so there is no way to avoid this completely.
While the coverage is standardized with the Medigap plans, these criteria can help you understand the differences and make an informed, educated decision on the most advantageous plan. If you have questions or want to get a Medigap quote comparison by email, please contact us on our website or call us at 877.506.3378.