With prices having the ability to vary by 100% between Medicare Supplement Companies the question is why? What factors are involved in determining the prices for standardized plans where the benefits have to by law be identical. Well here are some major factors.
In what region does a company decide to sell within?
Because every states regulations differ by so much you would imagine that it would be more expensive to sell in a certain state vs. another state. If a Company decides to sell in a state where regulations are very strict this could mean that higher rates will be passed onto consumers. In contrast if a Company decides to sell in a state where the regulations are lax than rates will dictate that.
Remember that just because a provider does not sell in a certain state does not mean that you would not have coverage in that state. You will have coverage at every provider in the country that accepts Medicare. This means that if you happen to be in a state that does not have very strict regulations you might find yourself getting a much better premium.
If a Company chooses to accept more Guaranteed Issue clients they risk having higher health claims dues to more of there clients not going through a formal underwriting process. So Supplement Companies that offer coverage to large Groups would have a detrimental effect on rates for there clients.
When a Medigap provider offers their Plans to a Retiring Group, covering all retirees, they increase their risk due to the fact that they are required to offer Guaranteed Issue status to a larger group of people. This will inevitably increase the prices for all policy owners within that Company because of the added cost of not underwriting as many customers as possible under that company's umbrella.
Learn more about Medicare Supplements. Stop by Andrew Coutavas's site where you can find out all about medigap plans and what it can do for you.
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