Medicare Supplement

Same Medigap letter, different insurers: how to compare them in Birmingham

BIRMINGHAM, Ala. — If you have shopped for a Medicare Supplement (Medigap) policy here, you already know the confusing part: two insurers can sell what looks like the exact same plan, but the way they price it — and the way they treat you a few years from now — can be very different.

Medicare SupplementBirmingham, AL

That is the puzzle this guide walks through. Birmingham sits in Jefferson County, and Medicare.gov's Medigap search lists 22 insurers offering standardized plans in the ZIP 35203 area. Because the letter on the plan (A, B, D, G, N and so on) is standardized by federal law, the coverage is identical from company to company. What is not identical is how each insurer sets its rate, how often it raises it, and whether it offers discounts or asks health questions.

The same letter means the same coverage

A Plan G is a Plan G. A Plan N is a Plan N. The federal government standardized Medigap letters so that consumers can compare apples to apples. If two insurers both sell Plan G in Birmingham, the benefits — what the plan pays after Original Medicare pays — are the same at both.

That is why the smart comparison is not "which plan," but "which insurer, for the same plan letter."

Newly eligible enrollees today can choose from Plans A, B, D, G, G-HD, K, L, M and N. Plans C and F are still sold, but only to people who became eligible for Medicare before Jan. 1, 2020.

Who sells Medigap in Alabama

The table below lists every insurer offering Medigap in Alabama and the letters each one sells. The full alphabetical roster includes AARP – UnitedHealthcare Insurance Company, AFLAC, American Benefit Life Insurance Company, Atlantic Capital Life Assurance Company, Bankers Life (Underwritten by Washington National Insurance Company), BlueCross BlueShield of Alabama, Continental Life Insurance Company of Brentwood, Tennessee (Aetna), GPM Health and Life Insurance Company, Guarantee Trust Life Insurance Company, HealthSpring Insurance Company, Humana (Emphesys Insurance Company), Insurance Company of North America, LifeShield National Insurance Company, Lumos Insurance, Mutual of Omaha (Omaha Insurance Company), Nassau Life Insurance Company, New Era Life Insurance Company, Physicians Mutual Insurance Company, Inc., State Farm Mutual Automobile Insurance Company, United American Insurance Company, USAA Life Insurance Company and WoodmenLife.

Not every insurer offers every letter. Some sell only a handful (BlueCross BlueShield of Alabama offers Plan A, for example), while others sell a wide range. That is the first filter: pick the letter you want, then look at which of the 22 insurers sell it.

The three ways insurers set the price

This is where the same plan letter starts to look very different in the mail three years from now. Alabama insurers can use any of three pricing methods, and each one ages differently:

• Attained-age rated. The premium is based on your current age and goes up as you get older. It often starts lower at 65 and climbs over time.
• Issue-age rated. The premium is based on the age you were when you first bought the policy. It will not go up because you got older, though it can still rise for inflation and claims.
• Community rated. Everyone in the state who has that plan pays the same base rate, regardless of age.

None of these is automatically the "best" method — they simply age differently. When you call an insurer or agent, ask directly: which rating method is this policy? A community-rated Plan G and an attained-age Plan G give you the same care, but a very different price picture at age 80.

Rate history, discounts and underwriting

Two more questions separate one insurer from another for the same plan letter.

Rate history. Alabama's insurance department publishes rate filings and consumer rate guides showing how often each insurer has raised premiums and by how much. A low starting price does not help much if the insurer raises rates sharply each year. Ask for the last five years of rate increases before you sign.

Household and spousal discounts. Some insurers offer a discount if a spouse or another adult in the household also has a policy with them, or sometimes just lives with you. Discount amounts and eligibility rules vary — always ask.

Medical underwriting. During your one-time six-month Medigap Open Enrollment Period, which starts the month you are 65 and enrolled in Part B, insurers must sell you any plan they offer at their standard rate, regardless of health. Outside that window, and outside a few federal guaranteed-issue situations, Alabama insurers can ask health questions and can decline coverage or charge more. That means the same Plan G might be easy to buy from one company and impossible from another, depending on your health history.

How to actually compare

A practical way to shop in Birmingham:

1. Decide on the letter first (many people compare G, G-HD and N). 2. Go to medicare.gov/medigap-supplemental-insurance-plans and enter your ZIP code to see the insurers licensed to sell that letter here. 3. Request the Alabama Department of Insurance Medigap rate guide, which shows sample premiums by insurer and age. 4. For each insurer on your short list, ask: What rating method do you use? What have your rate increases looked like the past five years? Do you offer a household discount? Will I need to answer health questions? 5. Call your local SHIP (State Health Insurance Assistance Program) for free, unbiased help. In Alabama, SHIP is offered through the Alabama Department of Senior Services.