Weiss Ratings: Medigap Rates Vary as Much as 1,316% [Professional Services Close – Up]

Medicare supplement insurance (Medigap) rates vary as much as 1,316 percent nationwide for identical plans, according to a new study by Weiss Ratings, an independent rating agency of U.S. financial institutions.

The open enrollment period for Medigap begins on October 15, the Company said. Based on this recent study, Weiss strongly recommends that consumers research their options before purchasing Medigap benefits. In addition to price, consumers should consider the financial strength of the insurer when selecting policy coverage.

Medigap policies help senior citizens cover the costs for medical care beyond those covered by Medicare itself. Plan types range from A, the basic benefit plan, through Plan N. The benefits within each plan are mandated by the government.

In analyzing more than 5.6 million premium rates among more than 165 insurers offering Medigap insurance in 2011, Weiss noted it found that premium rates continue to vary among all Medigap plans. Rates for Plan A range from a minimum of $439 to a maximum of $5,776 for a 65-year-old male.

Weiss Ratings senior financial analyst Gavin Magor said: "For 20 years Medigap rates have varied due to regional differences in pricing methodologies, state regulations, and the cost of health care. While we expect these differences in pricing among plans and across regions, we find that there is no justification for such wide price differences for exactly the same product in the same area. Consumers who research their options are likely to find opportunities for significant cost savings when purchasing Medigap insurance."

Some examples of dramatic pricing differences include:

-In Florida, Plan C costs $4,647 with Humana Health Insurance Company of FL, but only $2,880 with State Farm Mutual Automobile Insurance Company, representing a 61 percent difference in cost.

-In California, the plan would cost $5,133 with United Teacher Associates Insurance Company, which is three times more than the $1,693 with Globe Life & Accident.

-In Maine, premiums for Plan F vary from a low of $1,916 with Globe Life & Accident to a high of $3,590 with Humana Insurance Company, representing an 87 percent difference in cost.

-Plan F rates in Missouri run from $955 with Old Surety Life Insurance Company to $3,002 with Standard Life and Accident Insurance Company, a 314 percent difference.

Weiss Ratings, an independent provider of financial strength ratings on banks, credit unions, insurance companies as well as sovereign debt ratings on 49 countries, accepts no payments for its ratings from rated entities.

More information:

weissratings.com/medigap-search

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