Top 6 Worst Medicare Supplement Companies

Published on March 12, 2024

Written By: Mark Prip

Based on my personal experience as a Medicare broker, Bankers Life and United American Insurance Company are among the worst Medicare Supplement companies – due to aggressive sales tactics and high premiums.

I want to shine a light on several Medicare Supplement (Medigap) companies that lack dependability and trustworthiness. I’ve considered key factors like their monthly premiums, premium stability, and overall experience in the Medicare market.

With over 10,000 baby boomers entering the Medicare market daily, it’s no surprise that every insurance company in America wants a piece of the business. After experiencing the highs and lows over 20+ years in the Medicare field, my goal is to help you make a smart choice when picking a Medigap provider.

Important tip:

Evaluating a Medicare Supplement company based on benefits alone is not enough. All companies provide the same benefits for each plan level, regulated by CMS and your state insurance department.

Example: Medico’s Medigap Plan G benefits are the same as State Farm’s Medigap Plan G benefits.

Worst Medigap Company By Price

The biggest red flag with a Medicare Supplement provider is high premiums.

We put together a chart comparing the premiums of popular Medigap plans offered by different companies. We highlighted the most reliable providers and pointed out those who clearly charge too much.

Medigap Company	Plan G	Plan N	Plan A

ACE Insurance Company	$113.83	$85.42	$112.75
Allstate Health Solutions	$117.48	$92.75	$116.07
Cigna	$130.62	$91.34	$138.98
Aflac	$130.91	$99.41	$130.25
Mutual of Omaha	$130.99	$99.46	$134.49
Medico	$139.96	$106.69	$132.97
Humana	$149.15	$117.03	$149.00
State Farm	$141.35	$104.04	$151.81
United American Insurance Company	$183.00	$198.00	$148.00
Quotes are the average monthly rate for a 65 year-old male nonsmoker living in El Paso, TX (zip code 79936).

Premium analysis:

Companies like United American Insurance Company, State Farm, and Humana charge up to 38% higher rates for Plan G, 57% more for Plan N, and 26% more for Plan A compared to other top Medicare Supplement providers.

Worst Medigap Companies

Based on our research and experience, we have concluded that the following are the worst Medicare Supplement providers.

#1: Bankers Life

Bankers Life has offered Medicare Supplement plans for many years. Their door-to-door sales approach often involves high-pressure agents pushing a single, expensive option.

We’ve received many calls from Bankers Life policyholders, reporting they paid nearly 50% higher premiums than if they had enrolled with a more reputable Medicare Supplement provider. Coupled with the subpar rating on the Better Business Bureau, it’s clear that customers are not happy.

Bankers Life doesn’t even offer the option to obtain an insurance quote online. To receive one, you must fill out a form on their website and wait to be contacted by an insurance agent.

#2: United American Insurance Company

Despite its longevity, United American Insurance Company stands out for all the wrong reasons. Many policyholders have experienced unexpected premium increases and are overpaying by nearly 40% compared to leading companies.

Beneficiaries have also expressed frustration over policies not covering certain conditions or scenarios as initially expected.

Some reviews mention the difficulty in reaching customer support for assistance, understanding policy benefits and restrictions, and navigating claim processes. According to the BBB website, they are ranked with just 2.3 stars.

#3: Medico

With Medico’s long history, it seems they haven’t kept up with competitive rates. We’ve had many calls from Medico policyholders who noticed they’re paying about 30% more compared to top companies.

The Better Business Bureau website has also received negative feedback from Medico policyholders due to inadequate transparency in coverage details, a high rate of claims denial, and – if they can get ahold of anyone – horrible customer service.

#4: State Farm

While State Farm is well known in the car insurance industry, its footprint in the Medicare Supplement market has been less than impressive.

State Farm’s Medigap rates are often higher compared to other companies. Reviews and feedback point out customer service and policy flexibility concerns, indicating that State Farm may not be the best choice for those seeking Medigap coverage.

State Farm should also step up its game and offer perks like premium discounts or fitness program incentives that leading Medigap providers are already offering.

#5: Humana

Humana may offer a few discounts, but Medigap beneficiaries often pay premiums about 20% higher than other top companies.

According to the National Association of Insurance Commissioners (NAIC), complaints about Humana’s Medicare Supplement insurance plans are 223% more frequent than the average for all Medigap plans. This includes plans from Humana and its subsidiaries.

It’s also worth mentioning that the MyHumana app, designed to help manage coverage, hasn’t received good feedback either. The iOS app scored 2.9 out of 5, with users mentioning issues like incorrect coverage tracking, slow loading, and functionality problems.

#6: Transamerica

Known for its long history in the life insurance industry, it tried its hand in the Medicare space, only to exit the market altogether.

Here is the notice we received back in 2020 regarding their departure:

“Transamerica Premier has made the decision to streamline their focus and product portfolio by closing new sales of their Medicare Supplement Insurance business.

Effective September 28, 2020, Transamerica Premier will stop all new sales for this line of business. This includes all new sales for Agent Sold Medicare Supplement Insurance Plans A, B, C, D, F, and N.

Existing policies will not be impacted and will continue to be supported.”

Worst Medigap Plans With Lack of Coverage

When researching Medicare Supplement Plans, it’s crucial to understand how they work in real life and where they fall short. Here’s why I think Plans A, B, K, and L aren’t the best choices, with some real-world examples to highlight their limitations.

Medicare Supplement Plan A

Plan A is the most basic Medigap plan, covering Part A coinsurance and hospital costs and Part B coinsurance or copayments, but it skips several essential benefits.

What’s Missing: No coverage for the Part A deductible (which is $1,676 per benefit period in 2025), skilled nursing facility coinsurance, or Part B excess charges (what a doctor can bill above the Medicare-approved amount, up to 15% more).
Real-Life Scenario: Imagine you’re hospitalized and have to pay the $1,600 Part A deductible every time you’re admitted. Without coverage for this, those costs add up quickly. Or, if your specialist charges 15% above Medicare’s approved rate for a procedure, you’d be stuck paying that extra out-of-pocket.

Medicare Supplement Plan B

Plan B adds coverage for the Part A deductible, but the improvements end there. It still exposes you to gaps in skilled nursing facility care and Part B excess charges.

What’s Missing: There is no coverage for skilled nursing facility coinsurance, which costs $200 per day for days 21-100 in 2023, or Part B excess charges.
Real-Life Scenario: Say you’re recovering from surgery in a skilled nursing facility for a month. For days 21-30, you’d owe $2,000 out-of-pocket ($200/day x 10 days). On top of that, if your surgeon charges $3,000 for a procedure but Medicare only approves $2,500, you’d be responsible for 15% of the excess ($500 x 15% = $75). These gaps can quickly become financial headaches.

Medicare Supplement Plan K

Plan K is one of the least comprehensive Medigap plans, covering only 50% of most benefits and leaving significant out-of-pocket exposure.

What’s Missing: Plan K only pays 50% of Part A deductibles, hospice care coinsurance, skilled nursing facility coinsurance, and Part B coinsurance/copayments. It also doesn’t cover Part B excess charges at all.
Real-Life Scenario: Let’s say you need a hospital stay and skilled nursing care afterward. You’d pay $800 of the $1,600 Part A deductible (since Plan K only covers 50%) and $100/day for skilled nursing facility care (50% of $200/day). Even with Plan K’s annual out-of-pocket cap ($6,940 in 2023), you could hit that limit quickly if you face multiple medical issues in a year.

Medicare Supplement Plan L

Plan L is a slight improvement over Plan K. It covers 75% of key benefits but still exposes you to significant costs.

What’s Missing: Plan L doesn’t cover Part B excess charges or the Part B deductible. It also only covers 75% of things like the Part A deductible and skilled nursing facility coinsurance.
Real-Life Scenario: If you’re hospitalized and then need skilled nursing care, Plan L would only cover 75% of your Part A deductible, leaving you to pay $400 out of pocket. For skilled nursing care, you’d owe $50/day for days 21-100 (75% of $200/day). These partial payments can still add up fast, especially for more extended hospital stays or specialized care.

The Real Problem with These Plans

The gaps in Plans A, B, K, and L become apparent when you face actual healthcare costs. They might have slightly lower premiums, but the out-of-pocket expenses during a hospital stay, skilled nursing care, or high-cost procedures can far outweigh those savings.

Better Alternatives: Plans G and Plan N are more comprehensive and offer much better protection for slightly higher premiums. For example, Plan G covers almost everything except the Part B deductible, and Plan N lowers premiums by requiring small copayments for office visits and emergency room trips.

My Advice: If you’re trying to avoid financial surprises, it’s worth looking into more comprehensive options like Plans G or N. They may cost more upfront but can save you thousands in the long run.

Best Medigap Companies

Let’s look at some alternatives to the worst Medigap companies – like the top providers we partner with and trust for their reliability.

Aetna:
- Offers Medigap Plans A, B, C, D, F, G, and N
- Up to 7% household discount
- Policies are guaranteed renewable
- No network restrictions – see any doctor who accepts Medicare
- Dental and vision coverage options
Cigna:
- Offers Medigap Plans A, F, G, and N
- Up to 25% premium discounts
- Healthy Rewards program
- Options to bundle dental, vision, or hearing coverage
- User-friendly online portal
- 24/7 customer helpline
Aflac:
- Offers Medigap Plans A, F, G, and N
- 9.2% more affordable premiums on average
- Up to 7% household discounts
- Fast claims processing (typically one business day)
- Extra $2 discount per month for applicable monthly EBT payments

Allstate:
- Offers all ten standardized Medigap plans
- 12% more affordable premiums on average
- Up to 25% stackable discounts
- 30-day “free look” trial period
- Access to the Active&Fit fitness program
- Dental policy options with a 10% bundling discount
Mutual of Omaha:
- Offers Medigap Plans A, B, C, D, F, G, M and N
- Up to 12% household discount
- Nationwide provider network
- Access to the Mutually Well program
- Dental policy options with a 15% bundling discount
- 44% fewer complaints than average

Lower premiums matter, but we believe it’s important to work with providers who also offer solid financial stability, top-notch customer service, and a range of Medigap policy options to fit various healthcare needs.

Bottom Line

Certain Medigap companies may use pushy sales methods and offer superficial benefits to those looking to enroll in a Medigap plan. Remember to dig deeper to fully understand what each provider is truly offering.

Key things to think about are premiums, reliability, and longevity in the Medicare industry.

I recommend working with an experienced Medicare broker with at least five to ten years of expertise in the field. They can present you with a variety of options from different providers.

FAQs

What are the best Medigap companies?

We work with trusted providers such as Aetna, Cigna, Mutual of Omaha, Allstate, and Aflac.
What's the most popular Medigap plan?

Plan G and Plan N are the most popular Medigap plans.
What is a Medicare broker?

A Medicare broker assists individuals in selecting Medicare plans that suit their healthcare needs and finances.

Mark Prip

Since 2003, Mark Prip has been leading Policy Guide, Inc., providing knowledgeable information about Medicare, life insurance, and dental coverage to clients in over forty states. With his unparalleled hands-on experience aiding countless Medicare beneficiaries in selecting an appropriate health plan, he is a prime example amongst other competitors for expertise and assistance. Mark has held his Florida Health & Life Insurance License (E051889) since 2003. View his license profile on the Florida Department of Insurance website.

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