Two insurance companies can sell the exact same Medigap Plan G, with identical federally standardized benefits, and still charge premiums that differ by $50 or more a month. That isn’t a pricing mistake. Medicare requires every company selling Plan G to cover the same benefits, so price is the only real difference between one company’s policy and another’s. Find out what’s been going on.

Why Identical Medigap Benefits Can Have Such Different Price Tags

Medigap, also called Medicare Supplement insurance, is standardized by the federal government. Every company’s Plan G covers the same Part A coinsurance, Part B coinsurance, Part A hospice coinsurance, and other benefits listed on the plan. The benefits can’t change from one insurer to the next, so companies compete entirely on price. Source: Medicare.gov.

Where that price lands depends on decisions each company makes long before you ever get a quote: how it prices policies as members age, who else is already in its risk pool, and how much it spends on overhead and marketing. That’s why exactly why comparing companies (not just plan letters) matters.

So just to be crystal clear: A more expensive Medigap G doesn’t cover more benefits than a lower cost G

Other Reasons One Company’s Plan G Costs More

Several other factors separate one insurer’s Plan G premium from another’s:

  • Risk pool and claims experience. A company whose existing Plan G members file more claims will generally need higher premiums to stay solvent, even for new applicants who haven’t filed a claim yet.
  • Administrative costs and profit margins. Marketing spend, agent commissions, and overhead all factor into the premium a company needs to charge.
  • Underwriting practices. Companies that accept more applicants with health conditions, or that operate in guaranteed-issue situations more often, tend to price differently than companies with stricter underwriting.
  • Discounts. Some carriers offer household discounts (for married or domestic partners), non-smoker discounts, or a discount for paying by automatic bank draft. These can lower an otherwise identical premium by 5 to 14%.

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What about Rating Methods…does that explain differences in costs?

Every state allows insurance companies to choose from a few different rating methods for Medigap (also called Med Sup in some marketing materials).This isn’t as big a driver of cost differences as you may think.

  • Community-rated: Everyone with the same plan pays the same premium regardless of age, though the price can still rise with inflation and claims costs. A 66-year-old and an 80-year-old with the same company and plan pay the same amount.
  • Issue-age-rated: Your premium is locked in based on your age when you first bought the policy, and it won’t increase just because you get older. It can still rise for other reasons, like medical trend and claims experience.
  • Attained-age-rated: Premiums start lower but increase as you age, on top of any general rate increases. This method is common and can make a policy that looked cheap at 65 considerably more expensive by 80.

While issue age and community rated seem like the better long term deal (and might explain why they cost more at first), rating method isn’t a big factor in price gaps between carriers. This is because all three methods can also increase rates by inflation and this is a much bigger driver than their rating system.

How Much Can Plan G Premiums Really Differ?

The spread state to state can be significant. Using NAIC data, Plan G premiums averaged $164 a month nationally, but ranged from about $140 a month in Hawaii, New Mexico, and Washington D.C. to $236 a month in New York. Source: KFF. State rules, local claims experience, and each company’s pricing approach all feed into that gap.

We see similar price spreads between companies within a single state largely driven by the risk pool and claims experience mentioned in bullet number one above. Get an instant Medigap price here.

How to Compare Plan G Quotes the Right Way

If you’re new to Medicare, our guide to getting started with Medicare and our Medigap overview are good starting points before you shop.

Then get a Medigap quote on Senior65.com. It takes less than 30 seconds and shows Plan G pricing from multiple companies side by side, so you can see the real spread for yourself. Comparing quotes costs nothing, and by law no one can sell you the same Plan G policy for less.

Ready to see what Plan G actually costs from the companies available in your area? Get a free quote. Call 800-930-7956 if you need assistance after reviewing your pricing. Our help is free and we never charge you a hidden fee.

BOTTOM LINE: Purchase the lowest price Medigap plan G you can find (as long as the insurance carrier has a track record selling Medigap. Some new carriers start off with prices too low and cannot maintain them so pick someone who has been in the business for multiple years (all the carriers we feature on our Senior65.com quote tool hit that criteria)

Can You Switch to a Cheaper Plan G?

Yes. Using two ways as outlined below

1)Medical Underwriting: This is the path available to almost anyone, in any state, at any time of year. You apply with the new company, answer health questions, and the carrier decides whether to accept you at its standard rate. A pre-existing condition doesn’t automatically disqualify you, but every carrier weighs your history differently, so it’s worth checking your odds with the Medigap Underwriting Checker before you apply.

2) State switching rules: Some states also offer a Birthday Rule or similar annual window that lets you switch to an equal or lesser Plan G without underwriting, though this only applies to moving from one Medigap policy to another. Read the Medigap Birthday Rule state guide to see if your state has one, and see our guide to switching Medigap plans for the full process either way.