Medicare Supplement

Before You Pick a Modesto Medigap Carrier, Ask This

Modesto, Calif. — If you have shopped for a Medicare Supplement (Medigap) policy in Modesto, you may have noticed something strange: the same plan letter — say, Plan G — is sold by more than a dozen insurance companies, and yet the prices and rules can look very different. That is not a mistake. It is how Medigap is designed. The coverage inside a lettered plan is set by federal law, but almost everything else — how the premium is calculated, whether spouses get a discount, whether you have to answer health questions — is up to the insurer.

Medicare SupplementModesto, CA

Modesto is in Stanislaus County, where residents choose from the same statewide list of Medigap carriers licensed in California. Here is how to line them up fairly.

The plan letter tells you the coverage — not the price

Medigap plans are standardized. That means Plan G from one insurer pays the same Medicare cost-sharing as Plan G from any other insurer. The same is true of Plans A, B, D, G, G-HD, K, L, M and N, which are the letters available to people newly eligible for Medicare today. (Plans C and F remain available only to people who were eligible for Medicare before January 1, 2020.)

So if the coverage is identical, what actually differs from one company to the next? Four things: the pricing method, the rate history, discounts, and how easy it is to get approved.

The three pricing methods

California allows insurers to set Medigap premiums in one of three ways, and it matters more than most shoppers realize:

• Community-rated (no-age-rated): Everyone with that plan pays the same base premium, regardless of age. Premiums can still go up over time due to inflation, but not because you had a birthday.
• Issue-age-rated: Your premium is based on the age you were when you first bought the policy. A younger start age generally means a lower starting premium, and it does not rise simply because you get older.
• Attained-age-rated: Your premium is based on your current age, so it goes up as you age, in addition to any general rate increases.

None of these is automatically "better." An attained-age policy may look inexpensive at 65 and cost more at 80; a community-rated or issue-age policy may start higher but climb more slowly. Always ask which method an insurer uses for the letter you are considering.

Rate history: the number the ads don't show

A quoted premium is a snapshot. What matters over the long run is how often, and how much, that insurer has raised rates on existing policyholders. The California Department of Insurance publishes a Medicare Supplement rate guide that shows historical rate increases by company and plan letter. Reviewing three to five years of rate history for the same plan letter across different carriers is one of the most useful comparisons you can make.

Household discounts and underwriting

Two more differences to ask about:

• Household or spousal discounts. Some insurers reduce the premium if another adult in your household also has a policy with them, or sometimes just lives with you. The percentage and the eligibility rules vary widely.
• Medical underwriting. During your six-month Medigap Open Enrollment Period (which starts when 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 guaranteed-issue situation — California insurers can ask health questions and decide whether to approve you. California also has a "birthday rule" that lets you switch to an equal or lesser Medigap plan each year around your birthday without new underwriting. The exact rules differ by carrier.

Which insurers sell Medigap in California

The table below lists every Medigap insurer available to California residents and the plan letters each one sells. It includes well-known names such as AARP - UnitedHealthcare Insurance Company, Anthem BlueCross - California, Blue Shield of California Life & Health Insurance Company, Humana, Mutual of Omaha, State Farm and USAA, along with several others. Not every carrier sells every letter, so if you have your eye on, say, Plan G-HD, scan the table for the companies that offer it.

How to line them up

A fair comparison of the same plan letter across insurers usually takes four steps:

1. Go to Medicare.gov and use the Medigap policy search by ZIP code. It shows every insurer licensed to sell each plan letter in Stanislaus County. 2. Check the California Department of Insurance rate guide for historical rate increases on that plan letter by company. 3. Call each insurer (or an independent broker who represents several) and ask three questions: What pricing method do you use? Do you offer a household discount? What underwriting will apply to me right now? 4. Call your local HICAP counselor — California's State Health Insurance Assistance Program — for free, unbiased help. They do not sell policies.