USAA Medicare Supplement Insurance 2022 Review

by Ann deBruyn

USAA is a financial services company serving current and former U.S. military members, their spouses and children. Its services include banking, investing, retirement and insurance. USAA offers Medicare Supplement Insurance , or Medigap, in 45 states and Washington, D.C.

You need to be a USAA member to buy a USAA Medigap policy. Membership is free, but it’s available only to qualifying U.S. military personnel; veterans; cadets and midshipmen at U.S. service academies or other qualifying school programs; and the spouses and children of USAA members.

Here’s what you need to know about USAA Medicare Supplement Insurance.

USAA Medicare Supplement Insurance pros and cons

USAA’s Medigap offerings have advantages and disadvantages.

Pros

Cons

  • Minimal member complaints. Complaint rates for USAA Medigap policies are less than half the market average.

  • Financial strength. USAA has some of the health insurance industry’s highest financial strength ratings, so there’s little doubt that it can meet its obligations.

  • Military-focused advice. Because USAA members have military connections, it offers tools and resources tailored for current and former service members’ financial issues and questions.

  • USAA membership required. If you don’t qualify for USAA membership through military service or a family relationship, you can’t buy USAA Medigap policies.

  • Prices can be high. USAA policies were all at least 40% more expensive than the lowest-priced alternative in quotes obtained for this review.

  • Few discounts and perks. USAA doesn’t match competitors’ offerings for premium discounts or perks, such as gym memberships or hearing and vision products.

Available Medicare Supplement Insurance plans

  • Medigap Plan A — the basic benefits included in every Medigap plan without any extras.

  • Medigap Plan G — the highest-coverage option available to new Medicare members.

  • Medigap Plan N — a plan with lower premiums but higher copays.

USAA also offers Medigap Plan F for qualifying beneficiaries who were eligible to enroll in Medicare prior to 2020. Newer Medicare members can’t buy these plans from any insurer.

USAA offers additional plan types in some states. Select your state on USAA’s website to see the Medigap plan types available in your location.

Medigap plans have standardized Medicare benefits, but insurers can offer additional perks. While some competitors offer extra benefits like gym memberships or discounts on hearing aids and eyewear, USAA doesn’t publicize similar extras for its Medicare Supplement Insurance policies.

USAA does offer certain perks and discounts on products and services to its members, but these are available regardless of whether the member holds a USAA Medigap policy.

USAA Medicare Supplement Insurance service area

USAA offers Medicare Supplement Insurance policies in 45 states and Washington, D.C. (USAA doesn’t offer Medigap policies in Massachusetts, Minnesota, New Jersey, New York or Wisconsin.)

USAA covers about 154,000 Medigap beneficiaries and has about a 1.2% share of the total Medicare Supplement Insurance market .

The following price quotes were obtained for three states representing above-average, average and below-average costs for Medicare Supplement Insurance, when compared across all plans and providers using pricing data from Medicare.gov :

  • Colorado: More expensive than average.

  • North Carolina: Average cost for the U.S.

  • Ohio: Less expensive than average.

The sections below show pricing information from USAA for a 65-year-old female nonsmoker and reflect “base” pricing with discounts removed or factored out whenever the option was available. (Note: Some Medigap prices may be higher for males.)

For comparison, each table also includes the price for the least-expensive option to buy the same plan from other providers, based on information from Medicare.gov. For example, USAA’s price for Medigap Plan A in Sandusky, Ohio, appears alongside the lowest price on Medicare.gov for all Plan A policies available in Sandusky to an applicant with identical demographics.

Plan A

On average, USAA’s quoted prices for Medigap Plan A were about 46% higher than the least-expensive Plan A policy in the area.

USAA-quoted price

Medicare.gov lowest price

Fort Collins, Colorado

$102.17.

$70.

Greensboro, North Carolina

$101.83.

$81.

Sandusky, Ohio

$114.24.

$69.

Plan G

On average, USAA’s quoted prices for Medigap Plan G were about 44% higher than the least-expensive Plan G policy in the area.

USAA-quoted price

Medicare.gov lowest price

Fort Collins, Colorado

$149.94.

$97.

Greensboro, North Carolina

$128.18.

$87.

Sandusky, Ohio

$120.19.

$92.

Plan N

On average, USAA’s quoted prices for Medigap Plan N were about 61% higher than the least-expensive Plan N policy in the area.

USAA-quoted price

Medicare.gov lowest price

Fort Collins, Colorado

$117.13.

$70.

Greensboro, North Carolina

$116.79.

$68.

Sandusky, Ohio

$105.40.

$73.

Discounts

Some Medicare Supplement Insurance providers might offer premium discounts to qualifying enrollees who, for example, bundle multiple kinds of insurance, set up autopay or live with another adult who has a Medigap policy from the same provider.

USAA members can receive discounts on premiums if they pay monthly or quarterly, a USAA representative said in an email.

71.7% for member benefits

Medicare Supplement Insurance providers must report data on the premiums they collect and how much they spend to provide benefits for members.

Based on the most recent year of data, USAA Medicare Supplement Insurance plans spend about 71.7% of premiums on member benefits . (The other 28.3% goes to overhead expenses like administrative costs, marketing, salaries and commissions.)

For comparison, the average for all providers is 72.3%. The minimum required by law for individual Medigap policies is 60% .

50% below average

Members file complaints about Medicare Supplement Insurance policies from USAA half as often as the average for all Medigap plans. This is according to three years’ worth of data (2019-2021) from the National Association of Insurance Commissioners for USAA .

USAA’s complaint rate across all of its insurance offerings is even lower, with a complaint rate for all policy types about 89% below the average for all insurers over the same three years of data.

Here’s how USAA Medigap members can contact customer service:

  • Call USAA customer support at 210-531-8722 or 800-531-8722, Monday to Friday, from 7:30 a.m. to 8:00 p.m. Central time.

  • Send a secure message by logging into your USAA account online.

  • Chat with a virtual assistant on USAA’s Contact Us website.

  • Contact USAA through Twitter .

There are a few companies that weigh in on customers’ experiences with insurers or the strength of the company in question, and we’ve included two here:

AM Best Financial Strength Rating: A++

AM Best is a credit rating agency that specializes in the insurance industry. In March 2021, AM Best affirmed its Financial Strength Rating of A++ (Superior) for USAA and its property/casualty and life/health subsidiaries .

An A++ rating in this category indicates that AM Best believes USAA has a superior ability to meet its ongoing insurance obligations.

Moody’s Investors Service: Aa1

Moody’s Investors Service is a credit rating agency that evaluates the financial strength and creditworthiness of public and private organizations of all types. In May 2021, Moody’s affirmed its Aa1 insurance financial strength rating and updated the rating outlook from negative to stable for USAA Life Insurance Company — the USAA subsidiary responsible for Medicare Supplement Insurance .

An Aa1 rating indicates that Moody’s considers USAA’s obligations to be a very low credit risk and that USAA is on the higher end of this rating category. A stable outlook indicates that Moody’s expects a low likelihood of the Aa1 rating changing over the medium term.

Here's how Medicare Supplement Insurance providers compare with USAA.

Compare Medicare Supplement Insurance providers

Aetna

Complaint rate: 67% worse than the market average.

Service area: 43 states.

Percent of premiums spent on benefits: 75.6%.

AARP/UnitedHealthcare

Complaint rate: 63% better than the market average.

Service area: 50 states and Washington, D.C.

Percent of premiums spent on benefits: 71.7%.

Blue Cross Blue Shield

Complaint rate: 0.4% better than the market average.

Service area: 50 states and Washington, D.C.

Percent of premiums spent on benefits: 72.6%.

Cigna

Complaint rate: 40% worse than the market average.

Service area: 48 states and Washington, D.C.

Percent of premiums spent on benefits: 75%.

Humana

Complaint rate: 335% worse than the market average.

Service area: 49 states, Washington, D.C. and Puerto Rico.

Percent of premiums spent on benefits: 77%.

Mutual of Omaha

Complaint rate: 62% better than the market average.

Service area: 49 states and Washington, D.C.

Percent of premiums spent on benefits: 71.4%.

USAA

Complaint rate: 50% better than the market average.

Service area: 45 states and Washington, D.C.

Percent of premiums spent on benefits: 71.7%.

USAA was founded in 1922 by Army officers in order to insure one another’s vehicles. Today, the company offers banking, investing, insurance and other financial services to its 13 million members. Members include current and former U.S. military personnel and their spouses and children.

USAA is headquartered in San Antonio, Texas. In 2020, USAA’s annual revenue was $36.3 billion.

Find the right Medicare Supplement Insurance plan

Because Medigap plans are standardized, you can get precisely the same Medicare benefits from any insurer offering the plan. So when you shop, keep these considerations in mind to find the best policy to fit your needs:

  • Is your preferred plan available? Insurers don’t always sell every plan, so check who sells the plan you want to buy in your area.

  • What are the premiums? Prices for the same plan can vary between insurers, so check to find the most competitive rates.

  • Will your premiums change over time? Most policies cost more as you age, but some insurers offer policies that let you lock in a price when you sign up.

  • Are there extras? Medigap plans’ core benefits are standardized, but some insurers include such perks as discount programs or gym memberships.

If you have additional questions about Medicare, visit  Medicare.gov or call 800-MEDICARE (800-633-4227, TTY 877-486-2048).