Do the Medigap Insurance company ratings really matter? Well yes, as a matter of fact they do. Financial ratings are one of the 3 primary factors that we use here at Boomer Benefits to evaluate which of the top Medicare supplement companies we will represent to our clients.
Financial ratings of insurance companies serve to give us an opinion of the company’s financial strength and whether they have the ability to meet their ongoing commitments to their policyholders. Medigap insurance companies have assets and cash reserves, and ratings companies are grading them to see if these companies could pay out a whole lot of claims all at once if necessary.
The two most common ratings companies that you will usually hear about are A.M. Best and Weiss Ratings. A.M Best in particular is a global credit rating agency that focuses on the insurance industry.
Ratings for Medigap Insurance Companies
Medigap companies (also called Medicare supplement companies) do not make any of the decisions about what is covered or not. Medicare does that. This is important: If Medicare approves and pays on a claim, your Medigap company MUST pay its specified share of that bill.
So when evaluating Medigap companies, we don’t have to worry about who pays the best on claims. We just want a company that is just financially strong all around.
At our agency, we are generally looking for Medigap insurance company ratings of B+ (Good) or higher. The highest rating is an A++ which designates that the company has a superior rating.
What the Ratings Mean:
A++, A+ (Superior)
A, A- (Excellent)
B++, B+ (Good)
I would personally insure my own parents with any company that has these ratings. In fact, my parents have long-term care policies with an A-rated carrier.
Further down the spectrum, you will find ratings that indicate some vulnerability. That doesn’t mean we can’t make an exception, but in general, we don’t like to take any risks when it comes to a carrier that is insuring your health. As a policyholder, you want to feel confident in the stability of your insurer.
The only we might mention would be the NR rating, which means Not Rated. Sometimes big insurance companies might launch a subsidiary division and as that company is growing, it is still not yet rated. If the company is owned by a highly rated insurance company, we generally feel okay about that.
If it troubles you, remember there are many companies to choose from. You can absolutely stick with highly-rated carriers if you like.
Ratings for Medicare Advantage Plans
Unlike Medigap plans, Medicare Advantage companies DO make decisions on what is paid for not. For this reason, they are highly regulated by the Centers for Medicare and Medicaid Services (CMS).
If you choose to enroll in a Medicare Advantage plan, you can look up the financial rating of the company offering the plan. Let’s say you wish to enroll in a United Healthcare Medicare HMO, and you wanted to know just how financially strong the insurance company is. You can look up the same financial ratings info that we covered above.
However, what’s far more important are the Star Ratings for Medicare Advantage plans.
CMS designed a special star rating specifically for Medicare private plans. These Medicare Advantage plan star ratings indicate the overall quality of a health plan, not the financial health. CMS updates the quality ratings each year.
The ratings come from polls of actual members who give their ratings opinions of their insurance coverage. The members are asked to give feedback on things like management of chronic conditions, customer service responsiveness, drug pricing and so on.
How Medicare Advantage Plan Star Ratings Work:
5 Stars – Excellent
4 Stars – Above Average
3 Stars – Average
2 Stars – Below Average
1 Star – Poor
Some plans may be too new to the market to have reliable star rating information yet. Few plans receive the 5 star rating. We see ratings of 3 and 4 more often. If a plan falls below 3 stars for a few years in a row, CMS will even allow you to leave the plan mid-year. Medicare allows one switch to another plan with better ratings.
(Medigap plans do NOT have star ratings.)
Get Help with Choosing a Medigap Insurance Company
Here at Boomer Benefits, we have personal experience with all of the Medicare supplement companies in your state. We know exactly which carriers are the ones who are easiest to work with. You can check out our post on the Top 10 Medicare Supplement companies.
You can also get help choosing a plan that has strong ratings and fits your needs from our experts here at Boomer Benefits. Instead of you having to search out Medigap insurance company ratings for each company, our team can help you compare the top options. Call us at 1-855-732-9055 or use the get help now button to request a contact from us.