Medicare Supplement

Before You Pick a Medigap Company in Tempe, Read This

Tempe shoppers looking at Medicare Supplement Insurance — better known as Medigap — often notice something confusing: the same plan letter is sold by dozens of insurance companies in Arizona. Plan G from one company is the same Plan G from another, by law. So what actually differs between them? Almost entirely how the company prices the policy, how it raises rates over time, and whether it offers things like household discounts. Tempe is in Maricopa County, where Arizona residents can choose among a long list of Medigap insurers, and knowing how to line them up side by side is the real skill.

Medicare SupplementTempe, AZ

The same letter means the same coverage

Medigap plans are standardized by federal law. That means Plan G sold by one company in Tempe covers the same Medicare-approved costs as Plan G sold by any other company in Arizona. The letter is the coverage. If you have already decided you want Plan G, Plan N, or a high-deductible version, you have already decided what the policy will pay. What is left to compare is the company behind it.

People newly eligible for Medicare today can choose from Plans A, B, D, G, G-HD, K, L, M and N. Plans C and F are only available to people who were eligible for Medicare before January 1, 2020. The table below lists every insurer selling Medigap in Arizona and the specific letters each one offers.

The three ways insurers price the same plan

This is the single most important thing to understand when you compare companies. Arizona insurers use one of three pricing methods:

• Attained-age rating. The premium is based on your current age and generally goes up as you get older. It often starts lower at 65 and rises over time.
• Issue-age rating. The premium is based on the age you were when you first bought the policy. It does not go up simply because you had a birthday, though it can still rise due to inflation and claims.
• Community rating. Everyone in the same area pays the same premium, regardless of age.

Two companies can sell the identical Plan G and price it very differently over a 10- or 20-year stretch because of these methods. When you request a quote, ask which method the company uses in Arizona. It should also appear in the outline of coverage.

Rate-increase history matters more than today's number

A low starting premium does not tell you what you will pay in five or ten years. Every Medigap insurer files rate changes with the Arizona Department of Insurance and Financial Institutions, and the department publishes rate guides showing historical increases. Reviewing that history — how often a company has raised rates, and by roughly how much — is one of the more useful comparisons you can make. A company with a steadier track record may be worth a closer look than one with the lowest opening price.

Household discounts and other price adjustments

Several Medigap insurers in Arizona offer household discounts — sometimes called spousal or cohabitant discounts — if more than one adult in the home has a policy with them, or in some cases just lives with another adult. The size of the discount and the rules for qualifying vary widely. Some companies apply it only if both people buy Medigap; others apply it even if your spouse or roommate does not have a policy at all. Ask each company directly and get the answer in writing.

Underwriting: when the company can say no

Timing is everything here. During your Medigap Open Enrollment Period — the six months that start when you are 65 or older and enrolled in Part B — insurers must sell you any Medigap plan they offer, at their best available rate, regardless of your health. This is called guaranteed issue.

Outside of that window, most Arizona insurers can use medical underwriting. That means they can ask about your health, look at prescriptions, and decline you or charge more. Some situations, such as losing other coverage, trigger guaranteed-issue rights again. If you are past your initial window and thinking about switching companies, ask upfront whether underwriting applies to your situation, because a "better" price you cannot qualify for is not actually available to you.

How to line up the companies yourself

Two official tools do most of the work:

1. Medicare.gov Medigap policy search. Enter your ZIP code and it will list the companies selling each plan letter in your area, along with sample premiums and the pricing method each uses. 2. Arizona Department of Insurance and Financial Institutions rate guide. This is where you can look up rate-increase history and confirm which companies are licensed in the state.

From there, call two or three companies (or a licensed agent who represents several), ask about household discounts and underwriting, and compare like-for-like: same plan letter, same effective date, same person.

For personalized help, Arizona's State Health Insurance Assistance Program (SHIP) offers free counseling to Medicare beneficiaries. You can also call 1-800-MEDICARE.