Insurance companies charge different plan premiums for each state. The variations can be quite substantial… if you look at the highest and lowest rates, you may see differences as large as 70 percent.
These variations are important if you’re looking for a retirement destination. You might save hundreds of dollars per year by choosing a state with low premiums.
Medicare Supplemental Insurance Premiums
One significant consideration is the variety of supplemental plans available in a particular locale. State government rules limit the number of choices in some places.
Regardless of the laws in specific states, insurance agencies can decide what plans they want to sell in each part of the country. Most states permit all companies to provide up to 10 different standardized policies, such as plans F, G, N and so on.
Various state-specific health and economic factors prompt individual insurers to include or exclude certain states from each plan. The choices they make have an impact on the average Medigap premiums.
Level of Competition Among Insurance Companies
Different numbers of insurers serve each state. If your state has more insurance agencies that sell Medicare supplemental policies, greater competition will probably yield lower rates. The level of public demand for Medigap coverage also affects pricing.
Alternatives to supplemental insurance have an impact as well. Rates might fall if desirable Advantage plans are available and they cover some of the same services as Medigap. Competition may not benefit you unless you take the time to compare rates. Call our team of advisers or fill out our rates form here if you want help finding an affordable plan.
Varying State Rules on Accepting Applications
Each state enforces different requirements regarding who can purchase supplemental policies. For example, a number of states expect all insurers to offer Medigap plans to disabled people under 65 years old. Others let insurance companies only sell these policies to seniors.
Different state rules also give insurers varying amounts of leeway to approve or deny applications. Such laws have a significant effect on Medicare supplemental insurance premiums.
Expense of Medical Care in Different States
Another important consideration is the cost of health treatments in a certain region. Insurers must charge higher monthly premiums if they face larger bills from hospitals and doctors.
A wide range of factors affect these costs. Commercial building rental expenses as well all the average wages and state regulations make a difference. Health care tends to cost more in highly urbanized areas.
However, the state with the least costly healthcare doesn’t necessarily have the lowest Medicare supplemental insurance premiums.
For instance, pediatric and maternity care expenses aren’t relevant to this type of coverage. Prescription drug costs don’t affect Medigap premiums because these policies don’t cover medications. Maine, Hawaii and Vermont have comparatively low health expenses for seniors. On the other hand, people tend to face larger bills in Florida, Maryland and Nevada.
How Healthy Are the Seniors in Your State?
On the other hand, retirees are more likely to experience health problems in states where many people smoke cigarettes or prefer meals with high amounts of fat and cholesterol.
Rating Methods Used in Different States
Insurance companies refer to various pricing techniques as “rating” methods. These strategies can vary from one state to the next, especially when state governments require insurers to use specific methods.
For example, entry age-rated policies differ in price depending on your current age when you sign up. Attained age-rated insurance increases in cost as a person grows older. On the other hand, community-rated coverage charges the same premiums to people of any age. All of these methods result in higher costs for some seniors and lower rates for others.
State Government Medical Expenditures
Both the state and federal governments provide portions of the funding for senior health care. When they develop budgets, states can choose to allocate different amounts of cash to such programs. Retirees tend to pay lower supplemental premiums in any state that spends above average on healthcare.
This is true because seniors don’t need to rely on Medigap coverage to pay as many medical expenses. If a government devotes 5 percent more money to these programs, seniors generally pay about 3 percent less for supplemental insurance.
To sum it up, state-specific Medigap rates vary considerably for a number of reasons. Various laws, market conditions, average costs and health statistics play significant roles. Retirees can cut their living expenses by choosing to reside in states with lower premiums compared to the average medicare supplement premiums.
However, it’s also important to consider regional long-term care and prescription drug prices. Regardless of where you live, our health insurance advisers can help you find a plan with the right balance of coverage and affordability. Please contact us to learn more or complete our online rate form here.