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Founded in 1922, USAA is an insurance and financial services company serving a very specific market. In order to become a member and qualify for coverage, you must be either active duty or honorably discharged from any branch of the U.S. military, the family member of such a person (including widows/widowers and divorced spouses who have not yet remarried), or a cadet or midshipman. While the list of eligible people has changed over the years, these are the requirements currently listed on the website.
USAA was created among a group of army officers who, after finding it difficult to obtain coverage, decided to insure each other’s cars as a group. They grew quickly, boasting 8,000 members by 1928. In the 1960s the company began to expand, offering homeowner’s and life insurance policies. The 1980s saw the company move into the financial services industry, opening their first bank. It has grown to be one of the bigger insurance companies in America, in spite of its limited market.
As a reciprocal company, USAA returns dividends from its profits to members. These distributions are placed in subscriber accounts for the members, adding an extra perk to USAA membership. While these dividends are not guaranteed, historically, USAA has made distributions regularly. Distributions are provided on property & casualty policies, but not on health insurance policies.
USAA Medicare Policies
USAA offers Medicare Supplement, Medicare Advantage, and Part D Prescription Drug plans. Which policies are available and in what form will depend on the state in which you live.
USAA offers Medicare Advantage plans in all states except AK, RI, VT, and MA.
The site does state that the company offers both HMO and PPO plans, with a variety of premium levels that vary based on the coverage provided. They include a basic $0 premium option, as do many Advantage providers. This type of policy usually includes all of the basic Medicare coverage with a few extra perks for choosing a private insurer over the government plan.
Like the Advantage plans, we weren’t able to get much in the way of details on the Supplement plans available. Our quick rate quote request, which was simple enough to accomplish and did not require a log in, came back with three plan options for California. These are plans A, F, and N. Plan A, a standard basic plan, generally offers coverage for medical and hospital coinsurance, three pints of blood annually, and hospice coinsurance.
The available plans may vary from state to state, as will the rates for these plans. There is no indication on the website that there are any states excluded from the plan availability, so it does appear that anyone who is eligible can purchase a policy.
Part D Prescription coverage
Like the Advantage plans, there is not Part D information available unless you are a member and logged into the website. The site states that they offer a variety of different plans for prescription drug coverage; these plans appear to be available nationwide.
No quoting is available on the USAA for non-members who are not logged in on Medicare Advantage plans. They do, however, offer sample rates for each policy. The rates are based on a 65-year-old in San Antonio, TX. The Medicare Advantage sample rates range from the $0 plan up to $199 a month. The sample rates for Part D coverage, which we also could not quote, were given at $13 to $103 per month. Because the quotes given are for Texas and not our usual comparison area, we can’t offer a clear opinion on the value of these policies.
However, we were able to get a basic rate quote for Medicare Supplement Insurance for our comparison area in Southern California. The rates quoted were $120.02 a month for Plan A, the most basic plan available, and $159.29 a month for Plan F.
While these rates aren’t the highest we have seen, they aren’t the cheapest. The Plan A coverage especially comes in about 50% higher than the lowest rate we have seen in past samples. The Plan F, on the other hand, doesn’t raise the premium by as much as we’d expect, falling in line with other companies’ rates for this plan. This means it’s probably worthwhile to go a little higher on coverage with USAA, as you get quite a bit more for your money.
Ratings and Reviews
Because USAA is relatively new to the health insurance market and far more active in the property & casualty market, most of the reviews that are available are for the latter.
It should be noted that all of the Medicare plans are issued and administered by the USAA Life Insurance branch of the company. This means that customer service issues seen in auto insurance, for example, may not apply to the Medicare coverage.
USAA holds an A+ rating with the Better Business Bureau (BBB). There have been 1390 complaints filed against the company in the past three years. Of those, 652 were closed in the past 12 months. The vast majority of these complaints pertain to other USAA products and not to their Medicare plans. That said, the numbers in the past year are a little on the high side, even for a large company. By comparison, State Farm – the largest auto and home insurance company in the U.S. – had 1906 complaints in the past three years and 448 in the past 12 months.
USAA also has more reviews on Pissed Consumer than does State Farm, 869 for the former to 776 to the latter. On the other hand, the company does manage a better star rating than State Farm (although not by much) with 1.7 stars overall based on 280 ratings.
Again, the vast majority of these ratings don’t directly apply to Medicare, but to the company as a whole. Overall, USAA appears to be slipping a bit in recent years in terms of customer complaints, but there’s no evidence that this applies to the Medicare plans.
USAA is only an option for those who qualify as members. If you are already a member and have other insurance with the company, it’s probably worth the time to get a quote for Medicare coverage. Those who aren’t members yet but do qualify will have to go through the process of becoming a member; this may not be worth it given the sample rates that appear to be somewhat higher that other national insurance companies’ rates for the same coverage. If you do qualify for membership, however, it may be worthwhile to look into it if you’re interested in shopping other insurance needs at the same time.
For a list of companies that we recommend, visit our Best Insurance Companies page.