Seniors Risk Paying Too Much for Medigap Insurance

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Contributor, Benzinga
March 15, 2023

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A man turning 65 can pay $124 monthly to secure a Medicare Supplement Plan G insurance policy in 2023. Sign on for a policy from a different insurance carrier and he can find himself paying $533 monthly for essentially equal coverage.

These are the findings of the 2023 Medigap Plan G Price Index. The analysis conducted by the American Association for Medicare Supplement Insurance reports the lowest and highest costs for 10 major metro areas. The annual report looks specifically at Plan G which is the leading choice among seniors turning 65 who choose to get Medicare Supplement insurance (Medigap) coverage.

The analysis found that rates generally increased around 6 percent compared to the 2022 study. In a quarter of the cases, costs for Medigap options were lower than those found a year earlier.

Texans Enjoy Lowest Medigap Rates

The Price Index reported that a Dallas woman turning 65 could pay as little as $99.38 monthly for Medigap Plan G coverage. Lowest available rates for women residing in Houston are slightly higher ($111.12).

In some states men and women pay the same amount for Medigap coverage. Where insurers are permitted to charge different amounts, 65-year-old men will pay more. A Dallas man turning 65 will find the least expensive available coverage costs $112.12 monthly. In Houston, the lowest rate reported for a man was $125.53.

The following are select examples of the lowest and highest monthly Medigap Plan G rates available for men turning age 65 (Source: AAMSI 2023 Medigap Plan G Price Index):

CityZip CodeLowest PriceHighest Price
New York10012$281.50$476.04
Los Angeles90001$143.00$243.65

Spread Between Lowest and Highest Rates Grows

The 2023 analysis found a significant differential between the lowest and highest rates available. In Phoenix, the lowest monthly rates are $109.62 (female) and $123.83 (male). The highest reported for Phoenix-metro by the Association study are $470.61 (female) and $532.72 (male).

The spread between the lowest and highest policy costs increased in 2023 according to the analysis. No single insurance company consistently offered the lowest-priced insurance plans. Neither was one company always the costliest.

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Discounts Can Save Couples up to 14 Percent Annually

Insurers offering Medicare Supplement coverage may offer discounts when both members of a household are eligible for Medigap policies. The discount can vary with the maximum reported to be 14 percent.

Selecting the lowest premium is important but not the only factor that should drive a decision. Discounts as well as a company’s record of customer service are vital. So are added free benefits such as gym or fitness center memberships that can be worth as much as $1,000 or more.

In addition, determining the company’s history of rate increases can help avoid being locked into coverage where future premiums rise faster than industry averages.

Comparing Medigap Premiums Yields Multiple Benefits

The 2023 Medigap Plan G Price Index highlights the key benefit of comparing rates prior to securing coverage. The savings can amount to hundreds of dollars each year.

While Medicare allows individuals to review and change coverage, typically during annual special occasions like Medicare Open Enrollment, rules for Medigap are different. In some States switching from one Medigap insurer to another may require the applicant undergo new health underwriting reviews. For this reason, selecting the right coverage at age 65 can be highly beneficial.

 While Medicare is a national program, Medicare insurance options are local in nature. Available plan options and insurers as well as costs will vary based on where you live when applying for coverage. For this reason, many Medicare insurance experts recommend speaking to at least one local Medicare insurance professional when considering options. The American Association for Medicare Supplement Insurance makes available an online directory listing Medicare insurance agents by Zip Code. Access is free and private.

About Jesse Slome

Medicare Expert – Director Long Term Care Insurance Association, Medicare Supplement Insurance & Critical Illness Insurance Association