Dear Matt,

I just read your book but can’t figure out one thing. If I decide that I want Medicare Supplement (Medigap) Plan G and all the companies have the same benefits, why would there be price differences?

Why would anyone pay more in premiums for one company’s Medigap plan over another for the same exact benefits?

What am I missing here?


Susan J.


The first part is a simple answer. Nothing. There’s no reason to pay more for the actual Medicare Supplement (Medigap) Plan G from company X compared to company Y or Z.  Not for the actual Plan G insurance policy and its underlying benefits. They’re all the same!  

That’s because Medicare Supplement plans are standardized plans.  A Medigap Plan G plan insurance policy has the exact same benefit offering across the country, regardless which Medicare insurance company offers it. A Medigap Plan G, is a Medigap Plan G. No difference.

That said, here’s why you might – and I mean might- choose to pay a Medicare insurance company a higher premium for a Medigap Plan G, over another company’s whose prices are lower.

  1. AM Best Ratings Are Higher.

AM Best is a credit rating agency and assesses the creditworthiness of 16,000 insurance companies worldwide. AM Best rates almost all of the Medicare Supplement insurance companies in the US.  Medigap companies are rated on a scale similar to a report card.  D is the lowest, while A++ is the highest.

In my opinion, I wouldn’t be too scared if the Medicare insurance company was rated somewhere in the ‘A’ to ‘B’ range, but I’d personally stay away from any companies rated in the ‘C’ (or ‘D’) range.  You can usually find the company’s AM Best ratings right on their website. If you can’t, it might be because they’re not proud of them and don’t want to feature them.  Usually, an ‘A’ rating is something a firm likes to brag about, as do the independent Medicare insurance agents selling them. If it’s not prominently displayed in their marketing materials, snoop around their website for their rating.  Make sure to proactively ask your Medicare insurance agent, if it doesn’t come up.

  1. The “T65” Rates Are Artificially Low.

A lot of Medicare Supplement insurance companies offer discounts to entice you to sign up right when you’re 65 or otherwise eligible for Medicare Parts A and B.

These “T65” rates, or “Turning 65” rates are lower than what they’ll be year two-plus.  Make sure you look at the rates by age in their marketing materials and plan documents. The message here is: don’t get fooled into a more expensive plan over time, just because you pay a couple of bucks less in the first year.

  1. Your Medicare Supplement Company Adds “Bells and Whistles” into the Equation

Some companies add on “bells and whistles” to their product offerings, or for their “association” members.

For example, the United Healthcare/AARP-branded Medicare Supplement (Medigap) plans often have discount programs, vision discounts and gym memberships attached to their plans. These benefits aren’t built-in to the Medicare Supplement Plan G and technically are not often “insurance.”  But as United Healthcare/AARP members, you get access to them. Sometimes they’re called, “member services” or “additional member benefits” but either way, all carriers make sure to tell you these bells and whistles are not actual insurance.

Would you pay more for access to a gym? Maybe. Would you pay more if you wanted dental, vision and hearing discounts (again, NOT insurance)? Maybe. Maybe you already have a gym membership you like.  Maybe you don’t go to the gym. It’s up to you!

While I’m talking about the price… the price isn’t always the price, as they say.

  1. Application Fees, Household Discounts, Bundling Discounts

Some Medicare Supplement insurance carriers charge a one-time application fee. Some don’t. There are Medicare Supplement carriers out there that will rate you up if you’re overweight or reduce your premium if you’re at or under-weight (BMI). There can be household discounts applied for one than more policyholder under the same roof, there can be multi-policy discounts applied, discounts for EFT setup so your premium gets automatically deducted out of your checking account, there can be discounts if you pay annually instead of monthly, the list goes on.

Then after a while, some of those discounts can go away. Be sure to factor that into your decision-making process.

So yes, Susan – the benefits outlined in the actual insurance policy of a Medigap (Medicare Supplement) Plan G are exactly the same, no matter the carrier.

However, there are nuances to consider beyond the annual or monthly premium price, as “price” also depends on a variety of other factors.

Susan, I hope that helped!

I love answering Medicare questions. Send me yours by clicking here and I’ll pick a few for a future blog post!

To your wealth, wisdom, and wellness!

-Matt Feret

Related Articles:

When Can I Switch Medicare Supplement Plans?

Do Medicare Supplements Have a MOOP?

Author Bio: Matt Feret is the author of the Prepare for Medicare book series and launched prepareformedicare.com to help people get objective answers to questions about Medicare. He’s also the host of The Matt Feret Show.

He’s held leadership roles at numerous Fortune 500 Medicare health insurers in sales, marketing, operations, product development and strategy for over 20 years.  Matt holds a BA from Virginia Tech and an MHA from Washington University in St. Louis.

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