What Are Characteristics of the Best Medigap Plans?


Quick Answer

Characteristics of the best Medigap plans include their ability to pay for the most services Medicare doesn't cover and their inexpensive pricing method, according to Consumer Reports. Because companies carrying Medigap plans are simply bookkeepers that pay medical bills, there are no other differences between them.

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Full Answer

Medigap plans, also known as Medicare supplementary insurance, are standardized in almost all states and identified by individual letters, reports Medicare.gov. Although insurance companies are not required to carry all Medigap options, they must carry plans A, C and F. Medigap Plan A is less expensive and has the least amount of coverage, while Plan F, the most popular plan, covers almost all the gaps that traditional Medicare doesn't pay for, reports Consumer Reports. Companies offering Medigap are unrated because they do not offer medical services themselves but only pay bills.

Although coverage for Medigap plans is exactly the same among insurance companies, prices for premiums vary significantly, according to Medicare.gov. Among the three pricing structures, community-rated pricing means that the monthly premium is the same for all customers regardless of their age. Issue-age-related pricing means that the price depends on the age of the customer when he buys a premium, and afterward it doesn't change. Attained-age-related pricing means that premiums are inexpensive for younger customers but get higher as the customer ages. Community-rated pricing is least expensive and attained-age-related pricing most expensive over time, advises Consumer Reports.

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