When selecting a Medigap policy, it’s important to compare offerings from multiple insurance companies, especially if you’ve already chosen a specific standardized plan. While policies with the same letter designation provide identical benefits, premium costs can differ between insurers. For example, Policy A from Company 1 offers the same coverage as Policy A from Company 2, but the two companies may set different pricing. At Total Benefit Solutions, Inc we look at many factors besides price including length of time in market, ease of use and client service availability.
When choosing a Medigap, ask what factors the Medigap insurance company uses to set your premium. The following factors may affect the cost of your Medigap:
Where you live
Your age
Your health status
Your gender
If you smoke
If you are married
It is smart to buy your Medigap policy during your open enrollment period or when you have the guaranteed issue right because your premium cannot vary based on your health status at those times. Be aware of how Medigap companies use age when setting premiums. In some states, companies are only allowed to use age to set premiums in certain ways. Depending on your state, premiums may be:
No-age-rated (also known as community-rated): Premiums are the same for everyone living in a specific area, regardless of age. These are generally the least expensive over your lifetime.
Issue-age-rated: Premiums are based on the age you were when you first bought the policy. The younger you are when you purchase a Medigap, the cheaper your premium. (Note: Premiums will still increase over time due to inflation, but not due to age).
Attained-age-rated: Premiums are initially based on your age when you purchase a policy, and they increase as you get older (meaning you pay a different price at age 65 than you do at age 70). These premiums may be the lowest when you first buy them, but they are generally the most expensive over your lifetime.
Medigap policies help cover costs that Original Medicare doesn’t, such as copayments, coinsurance, and deductibles. Some of the most popular Medigap plans include:
- Plan F: Offers the most comprehensive coverage, including all deductibles and excess charges. However, it’s only available to those who became eligible for Medicare before January 1, 2020.
- Plan G: Similar to Plan F but does not cover the Medicare Part B deductible. It’s a popular choice for new enrollees.
- Plan N: Covers most costs but requires copayments for doctor visits and emergency room visits.
- NOTE: Medigap plans do not typically cover outpatient medications, that’s hat a Part D plan is for.
Several insurance providers offer Medigap plans, including BlueCross BlueShield, Humana, AARP by UnitedHealthcare, Mutual of Omaha, and Aetna. Each provider may have different pricing and benefits, so it’s important to compare options based on your needs.
Would you like help finding a plan that fits your situation? The professionals at Total Benefit Solutions, Inc are available to help you compare the options available to you. Contact us today at (215)355-2121 to schedule your personal Medigap client review.