Medicare Medigap question on pricing

September 27, 2024 4:06 PM

There are a 10 different Medigap plans for traditional Medicare. Once a plan is selected, you are given a choice of carriers. The premiums are different for each carrier. I thought the benefits were exactly the same. Why are they different? What am I missing?

According to Medicare, "All Medigap policies are standardized. This means, policies with the same letter offer the same basic benefits no matter where you live or which insurance company you buy the policy from."

Why not just pick the least expensive one?

posted by AMyNameIs to Health & Fitness (8 answers total)

They cover the same things, but different amounts. The standardization is between Part B or Part D plans. All part D plans cover prescriptions, but they operate in different states and coverage itself varies.
posted by chesty_a_arthur at 4:17 PM on September 27

Quick clarification: I am not asking about part D, drug coverage. I'm asking about Medigap, the supplemental part, which confusingly enough, is divided into about 10 plans, labeled A, B, C, D, etc.
posted by AMyNameIs at 4:35 PM on September 27

I have been on Medicare for several years now and I find it as murky as you do. Luckily when I first enrolled in Medicare we had consulted with a Medicare Advisor/Broker suggested to us by my employer (it's to the employer benefit plan's advantage for your claims to be split between their insurer and Medicare).

So you may want to ask for a reference from other people you know on Medicare if they were happy with advice they got from a particular Medicare Advisor/Broker.

And I'm glad you said you are not asking about Part D since it seems that changed drastically this year.

I will go out on a limb and mention that (to the best of my knowledge, which is limited) things not covered by Medicare are usually not covered by Medigap.

Corrections to anything I said above are welcome.
posted by forthright at 4:53 PM on September 27

I used to work in Medicare Advantage pricing, so I know the basics of Medigap pricing but don't have experience actually doing it. Basically, within a given standard plan design, the premium set by each company is different because each company is basing their rates off the specific population enrolled with them, as well as making different assumptions about how medical costs will increase over time (plus their internal administrative expenses differ, and they're setting different profit goals in order to secure particular competitive positions and financial targets).

Because the benefits are standardized (though I think there are some very limited supplemental benefits in some instances?), Medigap is largely a commodity product that's shopped on by price. You could try to suss out which companies have better customer service, or maybe try to figure out what the companies' recent history of premium changes has been / who's in financial trouble? A broker might be able to help with those aspects.
posted by bassooner at 8:50 PM on September 27

We went with a Plan-G medigap coverage through AARP/United Health. It basically fills everything in the Medicare A and B gap. Copays, out-of-pocket expenses, etc. If Medicare covers it, Plan-G pays for it. And, just like parts A and B, it’s good anywhere in the country, and you are not limited to an insurance company’s provider network. If a provider takes Medicare, they also take your Plan-G coverage.

This is not always true with Advantage plans. They are more like traditional health insurance in that you are often limited to an insurer’s preferred providers and subject to out-of-network costs, especially if you need to see a doctor outside your home state (while on a vacation, for instance.)
posted by Thorzdad at 1:59 AM on September 28

Like Thorzdad I have a plan G medigap plan with AARP/United Healthcare. Another important plus for me is that there are NO PRIOR AUTHS FOR TESTS. Your doc wants you to have an MRI? They have an opening today? Great! No going around in circles for a week trying to get an authorization. Now you need an epidural for the awful nerve pain in your back? No spending another week to get an authorization. Voila! Pain averted!

With a so-called Medicare Advantage plan you are back in the land of the prior authorization.
posted by citygirl at 3:13 PM on September 28

Some Medigap plans use a limited network of providers, restricting their insureds' choices to offer lower premiums. These "Medigap Select" plans aren't found in all states. These should be disclosed as such, so you'd probably be aware if this different product was among your choices.
posted by Snerd at 11:00 AM on September 29

Thanks you all for taking the time to answer. I’m definitely not going with an Advantage plan. As for Medigap, it seems like choose the letter (and not a Select plan), and then choose price is the right answer.
posted by AMyNameIs at 6:40 PM on September 29