Medicare supplement insurance plans are standardized by law and are named with letters. The standardization means that every company’s Plan A offers the same coverage, but not all companies sell every plan. And sometimes companies offer different plans in different states.
- Plans by company: If you want to purchase coverage from a specific company, start by looking at the plans that company sells in your area.
- Plans by type: If you are more concerned with the coverage provided than the company selling it, start by looking at plans and then determine which companies offer those plans in your area.
- Plans by geography: Medigap policies are standardized in a different way in the so-called waiver states of Massachusetts, Minnesota and Wisconsin.
Maximum out-of-pocket expenses and deductibles are standardized between companies. However, the monthly price may vary greatly between companies depending on your age, where you live, discounts and medical underwriting. To make sure a plan is financially beneficial, multiply the monthly premium by 12 and add any out-of-pocket cost you may need to spend. Weigh that cost against the chance you’ll spend more than that amount on healthcare if you do not have supplement insurance.
- Monthly premium: Monthly premiums for the same policies are not standardized the way coverage is, so consumers should get multiple quotes before enrolling in any policy.
- Discounts: Some companies offer discounts for paying your premium in full annually, for enrolling when you’re 64 or 65 and/or for having multiple policies with the same company. Consider getting quotes from companies you already have policies with, and ask the agent if discounts exist for current customers.
Because coverage is the same regardless of which provider you select, a company’s customer service is an important factor to consider when selecting a new Medigap provider.
- Available hours: Look at the hours when you can reach customer service representatives by phone. Make sure the contact information and hours for customer service representatives or agents, not just sales representatives, are listed.
- In-person availability: If you would prefer to work with someone in person, ask about local agents. Some companies let you place a request for a local agent to contact you, so you only have to submit your information and then wait to be called.
- Existing relationships: If you already have a policy with a company you like, you may wish to talk to the agent who manages your current insurance. They may be able to tell you about special discounts.
A company’s reputation may help you choose between insurers with similarly priced plans.
- Financial strength: Working with a financially stable company ensures that it will be able to pay for services long into the future , even if costs rise substantially or a disaster requires the company to pay for care for hundreds or thousands of policyholders. A.M. Best, Moody’s, Fitch and Standard & Poor’s are independent agencies that rate insurance companies’ financial stability. You can visit these agencies’ websites to see how they rate the financial stability of a specific company. Although many companies list a rating on their website, you can see the most reliable and recent rating on the independent agencies’ websites.
- Years in business: The amount of time a company has been in business can indicate that they have reliable business practices and good customer service. You may also wish to compare how long a company has offered Medicare supplement insurance.
- Recommendations: Ask friends and family members to tell you about their experiences with different insurance companies. Read online reviews to determine how the company deals with customers.
Some companies offer additional features and benefits for policyholders. Be aware, these extra features are not a part of the insurance so they could be changed or eliminated at any time during the policy term.
- Informational seminars: Some companies offer regular meetings and seminars to help customers understand insurance options and/or Medicare more generally. These seminars can help consumers make the best choice for their situation.
- Informational guides: Some companies send customers free pamphlets and other informational materials. These guides give consumers some guidance so they can ask agents specific questions.
- Healthcare perks: Some companies give customers free access to some healthcare services, like medical hotlines or preventative care discounts.
Other insurance offerings
Because companies may offer discounts for individuals who already own multiple policies with them, you may want to choose a company that sells several types of policies that interest you. A company’s other offerings may indicate how experienced they are in dealing with Medicare-related plans and/or people in your age group.
- Auto/home insurance: Companies that have an extensive number of products for protecting your home or automobile will likely offer multiple policies that meet your needs, so a multiple-policy discount would be easy to qualify for.
- Life insurance: Many companies that sell Medicare supplement insurance also offer life insurance policies. These companies might offer multiple policy discounts or might be accustomed to working with recent retirees.
- Health insurance: Companies that offer health insurance may be better at helping individuals choose Medigap policies that meet their needs.
When is the best time to buy?
The best time to buy a Medigap policy is during the Medigap open enrollment period. The period begins on the first day of the month in which you turn 65 or older and enrolled in Medicare Part B. Buying within the enrollment window means:
- Guaranteed issue: Insurance companies must sell you a policy.
- Pre-Existing Coverage: Pre-existing health conditions are covered.
- Can’t Be Charged More: Buying within the six-month window means people suffering from medical conditions can buy coverage for the same price as people without health issues.
- Switching Medigap: You can switch Medigap policies, but you risk a penalty if you don’t switch during the open enrollment window. People switch because they want to cheaper Medigap policy, or because they need more benefits.
What if you buy outside of the enrollment period?
If you apply for Medigap coverage after your open enrollment period, there’s no guarantee that an insurance company will sell you a Medigap policy if you don’t meet the medical underwriting requirements, unless you’re eligible due to one of the situations below:
- Disability: You’re under 65 and eligible for Medicare because of a disability or end-stage renal disease.
- Pre-existing conditions: Coverage for the pre-existing condition can be excluded if the condition was treated or diagnosed within six months before the coverage starts under the Medigap policy. After the six-month period, the Medigap policy will cover the condition that was excluded.
- Other insurance: If you have group health insurance through an employer or union, your Medigap open enrollment period will start when you sign up for Medicare Part B.