I sold Medicare Supplemental policies for about a year, working for Bankers Life and Colonial Penn.
Everybody’s F plan or N plan (the two that we sold the most of) are exactly the same. No company’s policy exceeded the benefits of anyone else’s. The Center for Medicare Studies regulates the plans and lists the specification that each plan must follow.
The only difference in Supplemental policies (used to be called Medigap) is price. AARP may charge $xx in Minnesota and charge $10 more in Tennessee or $15 less in Nevada.
A company bases its rates on its own “book of business”, its own experience with people born in a given year in a given state. Each company submits their rate request to insurance regulators in a particular state and the regulator will either approve or deny the rate request.
Not every company sells every plan in every state. There is no Medicare requirement that AARP sell an N plan in New Jersey. The company can opt out if it so chooses.
The thing to watch for is that the initial rate you are offered for the first year when you turn 65 is not a teaser rate. Some companies have an unofficial reputation for increasing rates in year 67 or 68 dramatically. You can get historical data from your state department of insurance. In North Carolina it is available on the Dept of Insurance website.
An illustration: The N plan was introduced only on 7/½010. This well-known company underpriced their premiums in order to get market share and they also allowed customers from other carriers to switch to this N plan without going through the health questions.
A year into it, this company raised rates over 23% and stopped writing the N plan in North Carolina due to having a 90% loss ratio. Standard loss ratio should be in the range of 75%.
Well OK you might ask why this is important. During your initial period of enrollment you can not be declined coverage for any reason by any company if you pay your premiums.
Once you are 90 days passed your 65th birthday, an insurer will ask you a health questionnaire and you could be turned down for coverage.
So if your premium gets jacked up when you turn 67 and you have had a serious illness you may not be able to switch companies.
So be careful. I can’t prove it but it seems to me that the larger carriers like AARP, Blue Cross Blue Shield, Colonial Penn among others will have larger pools of customers and that their rates will be more stable. On the other hand their initial rates are in the higher range than many other companies
SRM