Medigap Carrier Financial Strength Ratings 2026: Which Insurance Companies Are Safest?

Choosing a Medicare Supplement (Medigap) policy isn’t just about finding the right plan letter—it’s also about selecting an insurance company that will remain financially strong for decades. This guide breaks down 2026 Medigap carrier financial strength ratings, explains what each rating grade means, and helps you verify that your insurer can pay claims reliably.

Use our Medicare Supplement Penalty Calculator to estimate your costs and compare plans before selecting a carrier.

Why Financial Strength Ratings Matter for Medigap

When you buy a Medigap policy, you’re entering a relationship that could last 20–30+ years. You pay premiums every month with the expectation that the insurer will be there to pay your cost-sharing when you need medical care. Financial strength ratings answer one critical question:

Can this company pay my claims 10, 20, or 30 years from now?

A financially weak insurer risks:

• Rate spikes to cover claims shortfalls
• Policy cancellations or market exits (though rare for existing policyholders)
• State takeover and rehabilitation if reserves fall below legal minimums

Conversely, a financially strong insurer offers:

• Stable, predictable rate increases (typically 3–5% annually vs. 8–12% for weaker carriers)
• Reliable claims payment without delays or disputes
• Long-term market commitment—they won’t abandon the Medigap business

Unlike Medicare Advantage plans, which are annual contracts, Medigap policies are designed to be lifetime coverage. Your carrier’s financial health directly impacts your long-term healthcare costs.

The Major Rating Agencies Explained

Four major rating agencies evaluate insurance company financial strength. Each uses a different grading scale, but all assess the same fundamental question: the insurer’s ability to meet its ongoing obligations to policyholders.

A.M. Best (The Insurance Industry Standard)

A.M. Best is the most widely cited rating agency for insurance companies, and it specializes exclusively in the insurance industry. For Medigap shoppers, this is the single most important rating to check.

A.M. Best Rating	Category	What It Means for Medigap
A++	Superior	Exceptional financial security; highest claims-paying ability
A+	Superior	Excellent financial security; very strong claims-paying ability
A	Excellent	Strong financial security; secure for long-term coverage
A-	Excellent	Good financial security; acceptable but monitor for changes
B++	Good	Adequate financial security; consider alternatives if available
B+	Good	Marginal financial security; proceed with caution
B	Fair	Vulnerable to financial stress; not recommended for new enrollment
C++ to D	Marginal to Poor	Significant financial risk; avoid

Recommendation: Choose a Medigap carrier rated A- or higher. The strongest options hold A++ or A+ ratings.

S&P Global Ratings

S&P rates insurers alongside its broader credit ratings. S&P’s Financial Strength Rating (FSR) reflects the insurer’s ability to pay claims.

S&P Rating	Category	Meaning
AAA	Extremely Strong	Highest grade; virtually no risk
AA+, AA, AA-	Very Strong	Excellent security; minimal risk
A+, A, A-	Strong	Strong capacity to meet obligations
BBB+, BBB, BBB-	Adequate	Adequate capacity but more vulnerable
BB+ and below	Vulnerable to Speculative	Significant risk; not recommended

Moody’s Investors Service

Moody’s rates insurance company financial strength using its own scale:

Moody’s Rating	Category	Meaning
Aaa	Exceptional	Highest quality; minimal credit risk
Aa1–Aa3	Excellent	Very high quality; low credit risk
A1–A3	Good	Upper-medium grade; moderate credit risk
Baa1–Baa3	Adequate	Moderate credit risk; adequate security
Ba1 and below	Questionable to Poor	Significant credit risk; avoid

Fitch Ratings

Fitch uses a scale similar to S&P’s:

Fitch Rating	Category
AAA	Exceptionally Strong
AA+, AA, AA-	Very Strong
A+, A, A-	Strong
BBB+, BBB, BBB-	Adequate
BB+ and below	Weak to Vulnerable

Which rating should you check first? A.M. Best is the gold standard for insurance. If a carrier has an A.M. Best rating of A- or higher, you generally don’t need to dig deeper. For extra confidence, cross-reference with S&P or Moody’s.

Top Medigap Carriers by Financial Strength for 2026

Below is a summary of the major national Medigap carriers and their approximate 2026 financial strength ratings. Ratings are subject to change—always verify current ratings at ambest.com before enrolling.

Carrier	A.M. Best	S&P	Moody’s	Years in Medigap	Notable Strength
Mutual of Omaha	A++	A+	Aa3	50+	Largest Medigap insurer by volume; mutual company structure
AARP/UnitedHealthcare	A+	AA-	A1	25+	Branded partnership; massive UnitedHealth Group backing
State Farm	A++	AA	Aa2	20+	Exceptional stability; primarily auto/home but strong Medigap presence
Blue Cross Blue Shield (varies by licensee)	A to A+	A to A+	A1 to A3	50+	Network of independent licensees; ratings vary by state BCBS plan
Cigna Health	A	A	A3	20+	Global health insurance giant; strong diversified revenue
Aetna (CVS Health)	A	A	A3	25+	CVS Health subsidiary; integrated pharmacy + insurance model
Humana	A-	A-	A3	20+	Major Medicare insurer; strong MA presence backs Medigap
ManhattanLife	B++	NR	NR	15+	Growing Medigap carrier; lower rating but improving trends
Aflac	A	AA-	A1	10+	Known for supplemental; expanding Medigap footprint
Transamerica	A+	A+	A1	15+	Strong financial foundation; diversified insurance portfolio

Carrier Spotlight: Mutual of Omaha

Mutual of Omaha is the largest Medigap insurer in the United States and consistently earns A++ ratings from A.M. Best. As a mutual company (owned by policyholders rather than shareholders), it has no obligation to deliver quarterly profits to Wall Street, which often results in more stable rate increases. Their AARP-branded plans are among the most widely held Medigap policies in the country.

Carrier Spotlight: AARP/UnitedHealthcare

UnitedHealth Group, the parent company of UnitedHealthcare, is the largest health insurer in the world. The AARP-branded Medigap plans benefit from UnitedHealth’s massive scale and diversified revenue streams. Their A+ rating reflects exceptional claims-paying ability, and the AARP partnership provides additional consumer trust.

Carrier Spotlight: Blue Cross Blue Shield

BCBS is unique because it operates as independent licensee companies in each state. This means a BCBS Medigap policy in Texas is underwritten by a different company than one in Florida. Financial strength varies by licensee—most hold A or A+ ratings, but some smaller state affiliates may be rated lower. Always check your specific state’s BCBS licensee.

What Happens If Your Medigap Carrier Fails

Insurance company failures are rare, but they do happen. Here’s what occurs if your Medigap carrier becomes insolvent:

Step 1: State Insurance Department Takes Over

When an insurer’s reserves fall below legal minimums, the state insurance commissioner places the company into rehabilitation. The commissioner attempts to restore financial health through restructuring, asset sales, or reinsurance agreements.

Step 2: State Guaranty Association Activates

If rehabilitation fails, the company is placed in liquidation, and the state’s insurance guaranty association takes over. Every U.S. state and territory has a guaranty association that protects policyholders.

What’s covered:

• Medigap claims continue to be paid
• Unearned premiums are refunded
• Coverage may transfer to another insurer

Coverage limits vary by state:

Protection Type	Typical Limit
Unearned premium refund	$50,000 (most states)
Aggregate benefit coverage	$100,000–$500,000+ (varies)
Claims payment continuity	Maintained during transition

Some states (e.g., New York, California) offer higher protection limits. Check your state’s guaranty association website for exact figures.

Step 3: Policy Transition

The guaranty association typically arranges for your policy to be transferred to another solvent insurer. Your benefits remain the same, though administrative details (billing address, claims submission) may change temporarily.

Important: While the guaranty system is robust, it’s a safety net—not a substitute for choosing a strong carrier. Delays and administrative headaches can occur during transitions.

How to Check a Carrier’s Rating Before Enrolling

Verifying a Medigap carrier’s financial strength takes less than 10 minutes:

1. Get the carrier’s full legal name from your agent or policy documents. (Marketing names may differ from legal entity names.)
2. Visit ambest.com and search for the company. Registration is free for basic rating lookups.
3. Look for the Financial Strength Rating (FSR). Note both the letter grade and the outlook (Stable, Positive, or Negative).
4. Cross-reference with S&P or Moody’s if you want a second opinion.
5. Check your state insurance department website for complaint ratios and any regulatory actions against the carrier.

Red Flags to Watch For

• Rating downgrade in the past 12–24 months — investigate the reason
• Negative outlook from any major agency — signals potential future downgrade
• Multiple name changes — may indicate past insolvency or restructuring
• New to the Medigap market — less than 5 years of claims data
• Unusually low premiums — could signal aggressive pricing that leads to future rate shocks

Should You Switch Carriers If Ratings Drop?

A rating downgrade doesn’t automatically mean you should switch. Here’s a decision framework:

Situation	Recommendation
Downgrade from A++ to A+	No action needed — still Superior
Downgrade from A+ to A	Monitor but don’t panic — still Excellent
Downgrade from A to A-	Pay attention; check if other agencies also downgraded
Downgrade from A- to B++	Consider switching if you can pass medical underwriting
Multiple downgrades across agencies	Strong signal to explore alternatives
Placed under state supervision	Switch immediately if possible

The Switching Dilemma

Remember that switching Medigap carriers usually requires medical underwriting outside of your Open Enrollment Period or guaranteed issue situations. You may not qualify for a new policy if your health has changed. Some states (CT, ME, MA, NY, VT) offer year-round guaranteed issue rights, making switches easier.

Before switching:

• Compare premiums and rate increase history for the new carrier
• Confirm you can pass medical underwriting (if required)
• Verify the new carrier’s rating is meaningfully better
• Check our Medicare Supplement Switching Rules Checklist for step-by-step guidance

A.M. Best Rating Categories Explained in Plain English

Rating	Plain English Translation	Risk Level
A++ (Superior)	“Rock solid. This company has exceptional reserves and virtually no risk of default.”	Extremely Low
A+ (Superior)	“Extremely strong. One of the safest insurers you can choose.”	Very Low
A (Excellent)	“Strong and dependable. Well-capitalized with good claims-paying history.”	Low
A- (Excellent)	“Solid but monitor. Financially secure, but closer to the downgrade threshold.”	Low-Moderate
B++ (Good)	“Adequate. Will likely pay claims, but more vulnerable to market downturns.”	Moderate
B+ (Good)	“Marginal. Functional today but concerning if conditions worsen.”	Moderate-High
B (Fair)	“Vulnerable. Significant risk of financial stress.”	High
C or below	”Danger zone. Avoid for new Medigap enrollment.”	Very High

Comparing Medigap Carrier Stability: What to Look For

Beyond letter ratings, consider these stability indicators when evaluating Medigap carriers:

1. Market Tenure

Carriers with 20+ years in the Medigap market have weathered multiple economic cycles and healthcare cost trends. They have proven pricing models and claims management systems.

2. Rate Increase Consistency

A carrier averaging 3–5% annual rate increases demonstrates disciplined pricing. Erratic increases (2% one year, 15% the next) suggest poor actuarial forecasting.

3. Diversified Revenue

Insurers with diverse product lines (life, auto, home, commercial health) are less vulnerable to losses in any single segment. UnitedHealthcare, Cigna, and Aetna all benefit from diversified revenue.

4. Mutual vs. Stock Company Structure

Mutual companies (like Mutual of Omaha and State Farm) are owned by policyholders and tend to prioritize long-term stability over short-term profits. Stock companies must balance shareholder returns with policyholder obligations, which can pressure rate decisions.

5. Regulatory Track Record

Check your state insurance department for any enforcement actions, consent orders, or excessive complaints against the carrier. A clean regulatory record is a positive sign.

Frequently Asked Questions

What is a good AM Best rating for a Medigap insurance company?

For Medigap carriers, an AM Best rating of A- (Excellent) or higher is considered good. The strongest carriers hold A++ (Superior) or A+ (Superior) ratings. Avoid insurers rated B++ or lower, as these indicate greater financial vulnerability and potential claims-paying risk.

Which Medigap companies have the highest financial strength ratings in 2026?

Mutual of Omaha, AARP/UnitedHealthcare, and State Farm consistently hold A++ or A+ ratings from AM Best. Blue Cross Blue Shield affiliates, Cigna, and Aetna also maintain strong ratings in the A to A+ range. These carriers have decades of claims-paying stability and diversified revenue streams.

What happens if my Medigap insurance company goes bankrupt?

If your Medigap carrier becomes insolvent, your state’s guaranty association steps in to cover claims. Most states protect up to $50,000 in unearned premiums and continue paying claims, though benefit limits vary by state. Your coverage transfers to another insurer or is administered by the guaranty association during the transition.

How do I check a Medicare Supplement insurance company’s financial rating?

You can check ratings for free at AM Best (ambest.com), which specializes in insurance ratings. S&P Global Ratings and Moody’s also publish financial strength ratings. Your state insurance department website may also list complaint ratios and financial reports for carriers licensed in your state.

Should I switch Medigap carriers if the company’s financial rating is downgraded?

A single-notch downgrade (e.g., A+ to A) is rarely a reason to switch. However, multiple downgrades or a drop below B++ warrant serious consideration. Keep in mind that switching Medigap carriers typically requires medical underwriting unless you have guaranteed issue rights or live in CT, ME, MA, NY, or VT.

Do state guaranty associations cover all Medigap benefits?

State guaranty associations generally cover Medigap claims up to the policy limits, but coverage caps vary. Most states limit unearned premium protection at $50,000. Some states provide up to $500,000 in aggregate benefits. Check your specific state’s guaranty association for exact limits and protections.

What is the difference between AM Best A++ and A+ ratings for Medigap carriers?

Both A++ (Superior) and A+ (Superior) fall within AM Best’s highest “Superior” category. The difference is marginal—A++ indicates the absolute strongest financial position with maximum capital redundancy, while A+ reflects slightly less buffer but still excellent claims-paying ability. Both are considered top-tier for Medigap carrier selection.

Are newer Medigap insurance companies riskier than established ones?

Not necessarily, but newer carriers have less claims history to evaluate. A company with 20+ years in the Medigap market has a proven track record of pricing and claims management. If considering a newer carrier, verify it holds at least an A- rating from AM Best and carefully review its rate increase history.

Internal Resources

• How to Choose a Medicare Supplement Insurance Company 2026 — Complete insurer comparison checklist covering financial stability, rate increase history, and pricing methods
• Medigap Rate Increase Survival Guide 2026 — What to do when your Medigap premiums rise and how to evaluate whether switching makes sense
• Medicare Supplement Switching Rules Checklist — Step-by-step guide to switching Medigap carriers, including medical underwriting requirements and guaranteed issue rights
• Best Medigap Plans by Health Profile 2026 — Find the right Medigap plan letter for your specific health needs and budget
• Medicare Supplement Penalty Calculator
• Best Time to Buy a Medigap Policy

Ready to Compare Medigap Carriers?

Don’t leave your Medicare Supplement coverage to chance. Use our Medicare Supplement Penalty Calculator to estimate your costs, then compare quotes from top-rated carriers in your area. Choose an insurer with an A.M. Best rating of A- or higher, strong rate increase history, and a track record of claims-paying reliability.

Your Medigap policy could protect you for decades. Make sure the company behind it will be there just as long.

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Disclaimer

This guide is for educational purposes only and does not constitute insurance, legal, or financial advice. Insurance company ratings change over time. Always verify current ratings at ambest.com, consult your State Health Insurance Assistance Program (SHIP), and speak with a licensed insurance agent before making enrollment decisions. Guaranty association limits vary by state—contact your state’s insurance department for specific protections.

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