How to Research a Medicare Supplement Plan Insurance Company


If all plans are the same no matter what company you buy from, or where you buy from, then why do research on the best Medicare Supplement insurance provider you use? Here are some reasons:

• Private companies sell Medicare Supplement and Medigap plans, so there is some flexibility when it comes to premium prices. Different Medicare Supplement and Medigap providers offer different prices for the same plan, so it’s good to compare prices in your area.

• Some providers offer extra benefits beyond the primary standardized benefits included in a plan. For instance, some plans might offer membership in fitness programs.

• Why should you pay extra if the plans are the same – a possible scenario is when you are pleased by company X customer service over company Z. So, you willingly pay a slightly higher premium for better services in company X.

How do you research a Medicare Supplement plan provider?

When evaluating an insurance company, you need to consider its financial stability. This can assure you of price stability over the long run. After retirement, you will no longer have a paycheck, so you need to consider predictability and price stability when budgeting for your expenses earlier enough. Before you make your recommendations, you need to look at these things:

1. For how long has the provider been in the industry?

The importance of this is because you may want to filter out providers that are very new in the insurance industry. The reason being, many new entrants in the market, try to offer very low priced products, sometimes even at a loss to build market share. And, once they have developed enough clients base, they will raise prices until they can make some profit and thus increasing the costs of insurance premiums. The easy way to rule this out is to avoid companies with less than five years of operation in the industry.

2. What is the Insurance Company’s AM Best Ratings?

AM Best is a company that rates the ability of an insurance company to pay its claims. You may prefer to pick the A-rated or other better companies. However, lower-rated companies can have less stability and predictability, but again you are trying to find a provider with predictable and fair prices over your lifetime.

3. The Company’s pricing history

Some companies use a price philosophy to low-ball your enrollment price, intending to gather as many people as they can. Afterward, they raise prices progressively but consistently. Many providers know that most people don’t go shopping for prices. Companies that do so wait until they have reached a certain threshold. You need to do your research to identify the companies that use this pricing philosophy and avoid them.

4. Does the Company rely on fraternity identity or Brand Loyalty to market its plans?

You may find that companies that offer brand loyalty to clients use the same to keep customers from switching to other providers while they raise prices. That means, they use your commitment as a means of getting away with their consistent price increments. The same case applies to insurance providers that use fraternity loyalty, such as some religious-based companies. These plans may suffer from having a small client base resulting in less stability in prices.

5. Does the Company have a local, regional, or national presence?

The Medicare Supplement insurance industry is consolidating. When you choose a local or regional company, the chances are that a larger, well-established insurance company is buying your insurance company. The only concern is when there is division, and the Company decides to stop selling new plans and keep the Medicare supplement division for revenue purposes only. You may find yourself in a closed pool with no assurance if you will ever get out. The easy way to avoid such occurrences is to stay with a national company.

6. Are there changes in the Company that can impact on the insurance plan?

The corporate world has been making structural changes now and then in recent times, and this can leave an individual stranded in a plan that is closed to new customers. It can also result in a surprise increase in prices that sometimes can be shocking. An easy way to avoid this is to do thorough research on the industry and understand it well.


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