By Dwight Freely
Doing a Medigap compare can be tricky, but a little basic information can illuminate the key differences in all Medigap plans. Understanding these differences will allow you to make an informed purchase of the Medigap plan that fits your needs.
First, a little general info on Medigap plans
Medigap plans, also knows as Medicare supplemental insurance plans, are designed to fill the gaps left by Medicare coverage. Each plan is identified by a letter, either A through D, F, G, or K through N. Even though Medigap plans are sold by private insurance companies, the federal government has standardized what all Medigap plans must cover, so while different health insurance companies may offer a different price for, say, Plan A, the coverage and benefits for every plan A are the same no matter which company you choose.
Compare Medigap Benefits
Because the benefits for all Medigap plans are standardized, you need not worry about searching exhaustively among insurance companies for the benefits you need from Medigap. Compare the plans in the simple chart below to see the range of benefits that each plan offers.
View a chart highlighting the differences in all Medigap plans.
On the left side of the chart, mark the key benefits that are important to you, and see which plans include these benefits. Once you identify the lettered plan that fits your needs, the next section will explain how insurance companies price their Medigap plans, so you can determine which insurer offers your plan at the best price.
Medigap Costs
The cost of Medigap plans can vary widely among insurance companies. This is because, while the benefits are locked, insurance companies can still set the cost of premiums. So, in general, your best bet is to go with the insurance company that offers the best cost—but there is one caveat: insurance companies can also set wether or not the premiums will rise over time based on age. Each plan is rated as such by the insurance company in one of three ways:
- Community-rated (also called No-Age-Rated): Everyone in the community who has the same Medigap plan pays the same monthly premium, regardless of age.
- Issue-Age-Rated: The monthly premium is based on your age when you purchase the plan. Premiums are higher for older purchasers.
- Attained-Age-Rated: The initial premium is based on your age when you purchase the plan, AND, the premium increases as you age.
Note: With all three ratings, premiums may rise over time because of inflation or other factors.
So what’s the main difference between these ratings? Plans rated with the first two options have premiums that will not rise over time based on age. Plans with the third option, Attained-Age-Rated, have premiums that will rise over time based on age, and even though they will likely be less expensive when you purchase, they will ultimately be more expensive as the monthly premiums rise. For this reason, it is recommended that you purchase Community-Rated or Issue-Age-Rated plans. Always make sure to check how the plans are rated when comparing Medigap plans.
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