You may think to yourself that it is interesting that there could be so much difference in price between Standardized Medicare Supplement Plans. We have seen prices vary by over 100% from company to company. So how are these rates determined? There major factors that weigh into rate determination.

In what region does a company decide to sell within?

Every state has differing regulations that can affect the rates of insurance policies in those states. If you are in a highly regulated state you may be paying more than someone that is in a state that has less regulations. In addition companies that operate in states where the regulatory standards are more stringent will sometimes pass those costs onto their customers in other states thus increasing the costs for all customers in all states where that company operates.

Remember that just because a Medicare Supplement Company 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 on your Medicare Supplement Plan rate.

Another factor that would contribute to rate difference is whether a company chooses to offer Medicare Supplement Plans to people that are retiring from a Group Plan. What we are referring to is not offering coverage individually but to the entire group. Offering coverage to the entire group would increase the amount of Guaranteed Issue status cases that would have to be written meaning that there is a higher chance of health issues and in turn higher rates.

Think about it like this if a large retiring group is offered Medicare Supplement Plans through a company, it is now that companies responsibility to offer coverage to every single Retiree. You could imagine that the Medicare Supplement Company is opening themselves up to many more potential health issue that they did not underwrite because everybody was Guaranteed Issue.