Medicare Supplement

Three ways NC insurers price the same Medigap letter

If you live in Cary and you are shopping a Medicare Supplement (Medigap) policy, the coverage side of the decision is simpler than it looks. A Plan G is a Plan G. A Plan N is a Plan N. The federal government standardized these letters, so the benefits inside any given letter are the same at every insurer selling it in North Carolina. What changes from company to company is everything around the letter — how they set the price, how often they have raised it, whether they offer a household discount, and how strict they are if you apply outside a guaranteed-issue window.

This guide walks through those differences so you can compare the same plan letter across insurers on a level playing field. Cary is in Wake County, and every carrier listed below is filed to sell Medigap policies statewide in North Carolina.

The letter is standardized; the company is not

Under federal rules, Medigap plans are sold by letter — A, B, D, G, G-HD, K, L, M and N are 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. Whatever the letter covers at one insurer, it covers at every other insurer in the state. A Plan G from a national brand and a Plan G from a smaller company pay Medicare the same way.

That is why the useful question in Cary is not "which insurer has the best Plan G," but "which insurer offers this letter on terms that fit me." The table below lists every insurer filed to sell Medigap in North Carolina and the letters each one offers.

The three pricing methods, and why they matter later

North Carolina allows insurers to price Medigap policies in one of three ways. This is one of the most important things to ask about, because two policies that look similar at 65 can look very different at 75.

• Attained-age rated. The premium is based on your current age and typically rises as you get older, in addition to any general rate increases.
• Issue-age rated. The premium is based on your age when you first bought the policy. It does not go up simply because you had a birthday, though it can still rise with general rate increases.
• Community-rated. Everyone in the state who has that policy pays the same base premium regardless of age, though general rate increases still apply.

None of the three is automatically better. Attained-age often starts lower and grows faster; issue-age and community-rated often start higher and grow more slowly. Ask each insurer, in writing, which method it uses.

Rate history is a fairer comparison than today's quote

A quote is a snapshot. What you really want to know is how the insurer has adjusted rates over the last several years for the plan letter you are considering. The North Carolina Department of Insurance publishes rate filings and consumer rate guides that show approved Medigap rate changes by company. Two insurers can start close on the same Plan G and drift apart over five years because one has raised rates more often, or more steeply.

When you are comparing carriers like AARP – UnitedHealthcare Insurance Company, Aetna Health Insurance Company, BlueCross BlueShield of North Carolina, Humana, Mutual of Omaha (Omaha Insurance Company) or any of the others listed in the table below, ask each agent or company for the rate-increase history on the specific letter you want, in North Carolina, for the last five years.

Household and other discounts

Many Medigap insurers in North Carolina offer a household or spousal discount, typically when two adults in the same household both have a policy with the company, and sometimes when only one does. The amount and the rules vary by company, and the discount is not always visible in an online quote engine. Ask directly:

• Is there a household or spousal discount on this letter?
• Do both people need to enroll, or is living together enough?
• Does the discount continue if one spouse later drops the policy?

Some insurers also offer small discounts for paying annually or by electronic funds transfer.

Underwriting: when the insurer can say no

During your six-month Medigap Open Enrollment Period — which starts the month you are 65 or older and enrolled in Part B — insurers must sell you any Medigap policy they offer, at their standard rate, regardless of your health. You also have guaranteed-issue rights in certain situations, such as losing other coverage involuntarily.

Outside those windows, insurers in North Carolina can use medical underwriting. That means they can ask health questions and can decline you, charge more, or exclude coverage for a pre-existing condition for a limited period. Underwriting rules vary by company, so a person who is declined at one insurer may be accepted at another. If you are switching Medigap plans or shopping after your open enrollment window has passed, ask up front what health questions apply.

How to use Medicare.gov and the state rate guide

Two official tools will do most of the heavy lifting:

• Medicare.gov's Medigap policy search. Enter your ZIP code (a Cary ZIP works fine) and it will list every insurer selling each letter in your area, with the pricing method and general premium ranges.
• The North Carolina Department of Insurance consumer rate guide. This shows approved rates and rate history by company and can be requested from the department or found on its website.

For personalized help, North Carolina's State Health Insurance Assistance Program (SHIP), known here as SHIIP, offers free one-on-one counseling. You can also call 1-800-MEDICARE.