Why comparing Medicare Supplement Plans matters

Original Medicare (Part A and Part B) pays much of many beneficiaries’ hospital and medical costs, but it leaves predictable gaps. Medigap policies are designed to fill those gaps. Choosing the wrong policy — or the wrong carrier — can cost you hundreds or thousands of dollars a year in unnecessary premiums or out‑of‑pocket costs. In my practice working with Medicare clients, the most common mistakes I see are selecting a plan without comparing long‑term premium growth and not checking carrier ratings.

Key questions to ask when comparing plans

  • Which lettered Medigap plan (A, B, D, G, K, L, M, N, or high‑deductible versions) offers the benefits I actually need? (Note: Plans C and F are generally not available to new Medicare enrollees who first became eligible on or after January 1, 2020.) — (Medicare.gov).
  • How does the carrier price the policy: community‑rated, issue‑age, or attained‑age? This affects how premiums change as you age.
  • Does the carrier offer a high‑deductible plan option if you want lower premiums with higher initial cost sharing?
  • What are the carrier’s financial strength and customer service ratings (A.M. Best, NAIC complaint data, J.D. Power)?
  • Do I have guaranteed‑issue rights that allow purchase without medical underwriting?

Step‑by‑step comparison process

  1. Start with the benefits: choose the plan letter you want. All carriers must offer the same standard benefits for each lettered plan in most states, so first decide which letter provides the benefit mix you need (for example, Plan G vs Plan N). Medicare.gov explains the standardization of Medigap plans.

  2. Gather quotes from multiple carriers for that same plan letter. Premiums can vary widely between companies for the same standardized benefits. In my experience, two carriers offering Plan G can differ by 20–40% on premium for the same ZIP code and age.

  3. Compare pricing method: community‑rated (same for everyone), issue‑age (based on age at purchase), or attained‑age (lowest initially, grows with age). If you expect to buy at an older age, issue‑age or community‑rated pricing often cost less long term.

  4. Check guaranteed‑issue rights and open‑enrollment timing. Your Medigap open‑enrollment period generally begins the first day of the month your Part B is effective and runs for six months—during this period insurers can’t use medical underwriting. State rules may provide additional protections. Missing this window could mean denial or higher premiums. See Medicare.gov and your state insurance department for guaranteed‑issue rules.

  5. Evaluate carrier strength and customer service. Look up company ratings from A.M. Best and complaint ratios from your state’s Department of Insurance or the National Association of Insurance Commissioners (NAIC). In my work, I prioritize carriers with strong claims histories and responsive customer service even if their premiums are slightly higher.

  6. Run a five‑ to ten‑year cost projection. Don’t just compare the first year. Estimate expected premium growth based on the carrier’s pricing method and historical rate filings. Some carriers maintain low introductory rates and raise them later. Ask the carrier for historical rate adjustment data if available.

  7. Check extras and logistics: Does the policy require a specific claims process? Is there an examiner or phone support in your time zone? How easy is it to file claims if your provider doesn’t bill the insurer directly?

Pricing types and how they affect choice

  • Community‑rated: Everyone pays the same regardless of age. Good if you buy young.
  • Issue‑age rated: Premiums based on age at purchase; they don’t rise because you get older (though carrier increases still apply). Best for buying earlier.
  • Attained‑age rated: Starts lower for younger buyers and increases as you age. Often the cheapest initially but can become expensive.

Choosing between them depends on your age, health, and tolerance for future rate increases.

Enrollment windows and underwriting — what to know

Your best time to buy a Medigap policy is during your Medigap Open Enrollment Period (six months starting the first month you have Part B and are age 65 or older). During this period, an insurer can’t deny coverage or charge more due to health problems. Outside that window, insurers may use medical underwriting unless you have guaranteed‑issue rights triggered by special circumstances (e.g., losing employer coverage). State rules can extend protections; always check with your state insurance department. (Source: Medicare.gov)

Comparing Plan G and Plan N — a practical example

Plan G: Covers almost everything Medigap can except the Part B deductible (not available to new enrollees as Plan F if you first became eligible after 2020). Plan G tends to be a popular balance of comprehensive benefits and lower availability of Plan F for new beneficiaries.

Plan N: Similar to Plan G but may have copays for some office visits and ER visits that are not admitted and typically does not cover Part B excess charges. If you prefer lower premiums and accept modest copays, Plan N can be cost‑effective.

Example (illustrative): if two carriers quote Plan G at $150 and $190 monthly, and the same carriers quote Plan N at $135 and $165, you can decide whether the copays and potential excess charges under Plan N are worth the premium savings. I run this side‑by‑side with clients and estimate expected annual utilization to see which plan pays off.

Carrier selection: beyond the premium

  • Financial strength: Look for A.M. Best ratings of A‑/A or better.
  • Complaint history: Check NAIC complaint ratios and state insurance complaint pages.
  • Local presence and phone support: Especially important if you travel or need quick claim resolution.
  • Rate increase transparency: Ask for past rate filing history to gauge future volatility.

Tools and resources I use and recommend

Also see our related FinHelp guides: “Choosing the Right Medicare Supplement: A Beginner’s Guide” for an entry‑level walkthrough (internal link: https://finhelp.io/glossary/choosing-the-right-medicare-supplement-a-beginners-guide/) and “How to Shop for Medicare Advantage Plans: Key Questions” if you’re deciding between Medigap and Medicare Advantage (internal link: https://finhelp.io/glossary/how-to-shop-for-medicare-advantage-plans-key-questions/).

Common mistakes to avoid

  • Buying solely on the lowest initial premium without checking pricing method and past rate increases.
  • Assuming Plan letter availability means identical carrier pricing—quotes matter.
  • Overlooking guaranteed‑issue rights when switching plans or losing employer coverage.
  • Confusing Medigap with Medicare Advantage: Medigap supplements Original Medicare; Medicare Advantage replaces it.

Checklist: Quick comparison worksheet

  • Desired plan letter: _
  • Three carrier quotes for same plan letter: Carrier A $, Carrier B $, Carrier C $____
  • Pricing method: community / issue‑age / attained‑age
  • Carrier financial rating: _
  • State guaranteed‑issue rules applicable: yes / no
  • Estimated annual premium growth (based on past filings): _
  • Out‑of‑pocket risks I’m willing to accept: _

Final tips from my practice

  • Start comparison early—at least 60–90 days before your Part B effective date.
  • Use the Medigap open‑enrollment window to secure coverage without underwriting.
  • If price is the main concern, compare like‑for‑like (same plan letter) across carriers and then decide on the trade‑offs.
  • Keep an eye on carrier rate‑filings; an inexpensive policy this year may have multiple increases.

Professional disclaimer
This article provides general information to help you compare Medicare Supplement Plans. It is not personalized financial, legal, or insurance advice. Consult a licensed insurance agent or financial adviser who specializes in Medicare for recommendations tailored to your medical needs, budget, and state rules.

Authoritative sources

Related FinHelp guides