What is the primary purpose of standardizing Medigap policies?

The primary purpose of standardizing Medigap policies is to help consumers make informed decisions. Standardization means that the basic benefits provided by each Medigap plan are uniform across different insurance companies, making it easier for consumers to compare plans. This clarity allows individuals to understand what coverage they are getting regardless of the insurer, as each plan letter (like Plan A, B, C, etc.) offers the same basic benefits. Consequently, this standardization is designed to empower consumers by enabling them to select the plan that best meets their needs without being confused by varying terms and conditions across different providers.

While reducing healthcare costs and simplifying Medicare enrollment are important considerations, they are secondary to the central goal of aiding consumer decision-making in a marketplace that can often be complex and overwhelming. Additionally, limiting insurance providers' options is not a goal of standardization; rather, it enhances transparency and fosters competition among providers by ensuring they all adhere to similar benefit structures.