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Medicare Supplement Insurance Companies

Medicare Supplement Insurance (Medigap) policies are health insurance plans sold by private insurance companies that can help lower your out-of-pocket health care costs associated with Original Medicare. Because Medigap policies are sold by private companies, there can be variation in policy pricing.

Learn more about how the structure of individual Medicare Supplement Insurance companies could affect you, and compare Medigap plan benefits to find the right policy for your needs.

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5 Facts You Should Know About Medigap

Here are five essential facts to keep in mind as you compare Medicare Supplement Insurance plans and the companies that sell them.

1. Insurance companies can charge you more if you sign up outside of your Medigap open enrollment period.

Medicare Supplement Insurance companies can’t offer you a higher rate or deny you a policy based on your health status if you sign up during your Medigap open enrollment period. Your open enrollment period only lasts for six months and begins the month that you are both 65 and enrolled in Medicare Part B.

If you buy Medicare Supplement Insurance outside of your open enrollment period, insurance companies may charge you more for your plan or deny you coverage altogether if you have pre-existing conditions.

If you miss your open enrollment period deadline, you may still have some guaranteed issue rights. This means that if you meet certain qualifying conditions, an insurance company must sell you a Medigap plan and cover all of your pre-existing conditions without charging you more for the policy.

Some guaranteed-issue rights outside of your open enrollment period are related to situations in which your Medigap provider is unable to continue to provide coverage. In these situations, you usually have a set period of time to buy Medicare Supplement Insurance from companies without any cost penalty.

2. You may have to wait for coverage if you have a pre-existing condition.

You may face a six-month waiting period after buying a Medigap plan before insurance companies will cover certain pre-existing conditions.

This rule typically applies to conditions that were diagnosed up to six months prior to the start date of your Medigap policy. During this six-month waiting period, you will still receive coverage for your condition through Medicare Part A and Part B, and your Medigap plan benefits will begin once the six-month waiting period ends.

3. Medicare Supplement Insurance plan benefits are standardized, but their prices are not.

In most states, there are 10 standardized Medicare Supplement Insurance plan types, and the basic benefits insurance companies offer through each type of plan must be identical to the federal standard. Regardless of whether you live in Florida, California, Maine or Texas, you will always receive the same basic benefits as other people who have the same type of Medigap plan.

Insurance companies are not required to charge everyone the same price for the same type of Medicare Supplement Insurance plan. Insurance companies often charge different rates based on location, age, gender or, if your sign up outside of your open enrollment period, health history. 

Two Medicare Supplement Insurance companies offering the same type of Medigap plan in the same area may charge different monthly premiums, so be sure to shop around and compare quotes before making your final decision.

4. Medicare Supplement Insurance companies choose their own pricing structure.

Insurance companies choose how to price their monthly premiums, but what you pay when you first purchase your policy is not always going to remain the price you pay for the policy over time. Insurance companies set their pricing structure in one of three ways that can cause the amount you pay over the course of your policy to vary widely:

  • Community-rated
    Everyone in a community that buys this type of plan is charged the same monthly premium, regardless of your age at the time of enrollment. Because age does not matter, someone who is 65 would pay the same amount per month as someone who is 75.

  • Issue-age-rated
    Your Medicare Supplement Insurance premium is based on your age when you first purchase the policy. Because age does matter in these plans, someone who signs up at age 65 may have a lower monthly rate than someone who signs up at age 70.

  • Attained-age-rated
    Your current age decides how much you pay per month for your policy. Premiums for this type of Medigap plan may start out low for someone who is age 65 but will increase over time to reflect the age they have “attained.” These policies have the possibility of being the most expensive over time.

Regardless of pricing structure, insurance companies are also allowed to increase premiums due to inflation or other market factors at any point during your plan.

5. Insurance companies aren’t required to sell every type of Medigap plan.

Medicare Supplement Insurance companies can choose which plans they offer, so make sure to compare plans and speak with a licensed insurance agent who can help you compare your local options.  

If insurance companies offer any Medicare Supplement Insurance plan, they must offer at least Plan A in addition to any others. Medicare Supplement Insurance companies must also sell either Plan C or Plan F.

The chart below details what basic benefits are included in each of the 10 standardized Medigap plans. As you can see, Medigap Plan F is is the most comprehensive plan and is the most popular plan sold by Medicare Supplement Insurance companies.

Chart showing Medigap plan benefits in 2019

Licensed agents can answer your questions about Medicare Supplement Insurance companies. Call today at 888-264-0148 to compare quotes in your area. 

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