SOURCE: Weiss Ratings

Weiss Ratings

October 10, 2011 14:58 ET

Medigap Rates Vary as Much as 1,316%

Weiss Warns Consumers of Dramatic Price Differences for Same Plan Benefits

JUPITER, FL--(Marketwire - Oct 10, 2011) - Medicare supplement insurance (Medigap) rates vary as much as 1,316% nationwide for identical plans, according to a new study by Weiss Ratings, an independent rating agency of U.S. financial institutions.

The open enrollment period for Medigap begins on October 15. Based on our recent study, Weiss strongly recommends that consumers research their options before purchasing Medigap benefits. In addition to price, consumers should consider the financial strength of the insurer when selecting policy coverage.

Medigap policies help senior citizens cover the costs for medical care beyond those covered by Medicare itself. Plan types range from A, the basic benefit plan, through Plan N. The benefits within each plan are mandated by the government.

In analyzing more than 5.6 million premium rates among more than 165 insurers offering Medigap insurance in 2011, Weiss found that premium rates continue to vary dramatically among all Medigap plans. Rates for Plan A range from a minimum of $439 to a maximum of $5,776 for a 65-year-old male. The broad ranges in premium rates for Plans A through N for a 65-year-old male are illustrated below:

2011 Medigap Premium Rates
Plan Minimum ($) Maximum ($) % Difference
A 439 5,776 1,316
B 756 6,682 884
C 838 5,334 637
D 812 4,734 583
F 869 5,295 609
G 868 5,017 578
K 454 2,218 489
L 680 2,847 419
M 797 3,812 478
N 696 3,706 532

Weiss Ratings senior financial analyst Gavin Magor commented: "For 20 years Medigap rates have varied due to regional differences in pricing methodologies, state regulations, and the cost of health care. While we expect these differences in pricing among plans and across regions, we find that there is no justification for such wide price differences for exactly the same product in the same area. Consumers who research their options are likely to find opportunities for significant cost savings when purchasing Medigap insurance."

Some examples of dramatic pricing differences include:

  • In Florida, Plan C costs $4,647 with Humana Health Insurance Company of FL, but only $2,880 with State Farm Mutual Automobile Insurance Company, representing a 61% difference in cost.
  • In California, the plan would cost $5,133 with United Teacher Associates Insurance Company, which is three times more than the $1,693 with Globe Life & Accident.
  • In Maine, premiums for Plan F vary from a low of $1,916 with Globe Life & Accident to a high of $3,590 with Humana Insurance Company, representing an 87% difference in cost.
  • Plan F rates in Missouri run from $955 with Old Surety Life Insurance Company to $3,002 with Standard Life and Accident Insurance Company, a 314% difference.

Senior citizens wishing to compare Medigap policies and pricing can go to to see for free the range of rates available for their age, gender, and zip code. They can also obtain a personalized report providing comparisons of the actual premium rates offered in their zip code for each of the ten Medigap plans, along with the Weiss Financial Strength Rating for each carrier. The financial strength of an insurer can affect claim payments and should be a key factor for consumers to consider when selecting policy coverage.

About Weiss Ratings

Weiss Ratings, the nation's leading independent provider of financial strength ratings on banks, credit unions, insurance companies as well as sovereign debt ratings on 49 countries, accepts no payments for its ratings from rated entities. By adhering to its independent business model, Weiss outperformed Standard and Poor's, Moody's, A.M. Best and Duff & Phelps (now Fitch) in warning of future life and health insurance company failures according to a 1994 study by the U.S. Government Accountability Office (GAO), while also outperforming its competitors in identifying the safest insurers, according to its follow-up study using the GAO's research methodology. Similarly, Weiss was the only one to identify, in advance, nearly all major banks that failed or required a federal bailout in the 2008-2009 debt crisis.

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