When buying a medigap policy, it pays to shop around
Medigap policies that supplement Medicare’s basic coverage can cost vastly different amounts, depending on the company selling the policy, according to a recent study. The findings highlight the importance of shopping around before buying a policy.
When you first become eligible for Medicare, you may purchase a Medigap policy from a private insurer to supplement Medicare’s coverage and plug some or virtually all of Medicare’s coverage gaps. You can currently choose one of eight Medigap plans that are identified by the letters A, B, D, G, K, L, M, and N (Those who were eligible for Medicare before January 1, 2020, could also purchase Plans C and F, but those plans are not available to people newly eligible for Medicare). Each plan package offers a different menu of benefits, allowing purchasers to choose the combination that is right for them.
While federal law requires that insurers must offer the same benefits for each lettered plan — for example, plan G offered by one insurer must cover the same benefits as the plan G offered by another insurer — insurers set their own prices for each plan, and prices can vary considerably.
The American Association for Medicare Supplement Insurance compared the cost of plans in the top 10 metro areas and found huge price differences. Using Plan G (the most popular plan) for comparison, the association found that in Dallas the lowest price for a 65-year-old woman was $99 a month, while the highest price was $381 a month. That’s a yearly difference of more than $3,000 for the exact same plan.
The association also found that no one company consistently offered the lowest or highest price. That means you can’t rely on one insurer to always have the better price.
When looking for a Medigap policy, make sure to get quotes from several insurance companies. In addition, if you are going through a broker, check with more than one because not every broker represents every insurer. It can be hard work to shop around, but the price savings can be worth it.