Which Medigap Plans Are Best?
It’s difficult to state which of the Medicare Supplement plans is best for you, as everyone’s situation is different. It is however, very easy for an agent to simply tell you something like “Medigap Plan F is the best. It has the most coverage out of any of the plans.” This is only half-true, as it does over the most coverage. But because Plan F also comes with a higher price tag, depending on your health and income status there could very well be better options. For instance Medigap Plan G and N both have lower premiums than Plan F, but there are cost-sharing benefits included such as deductibles or copays. If someone is on a severely limited income, yet healthy, they could easily save as much as $40 or more on monthly premium and just have a small deductible to pay. A good agent will first determine your personal situation and then suggest plans based on that.
I can’t change Medigap Plans until the end of the year, correct?
You may change a Medicare Supplement policy any time throughout the year. Many people think they can only change during the open enrollment period, which lasts from October 15th through December 7th each year. This period is designated only to change Medicare Part D drug plans, to change Medicare Advantage plans or return to Original Medicare from an Advantage plan, or to enroll in an Advantage plan for those who had Original Medicare.
Do I need to call my doctor to see if he or she will accept a certain Medigap company?
If your doctor accepts Part B Medicare, he or she will accept all of the Medigap Plans as they cannot pick and choose which ones they will accept. In some instances certain clinics may only take an Advantage plan, often owned by the clinic, however if your doctor accepts a Medigap Policy from say, AARP, they must also accept a policy from Mutual of Omaha or any other company. The plans are standardized and all work, and are all accepted, the same. If you’re doctor tells you otherwise they are likely thinking you have a Medicare Advantage Plan. In this case you have an opportunity to teach them how it works! This happens far more than you might think.
Will I be accepted into a Medicare Supplement Plan with preexisting conditions?
If you are turning 65 and first entering Medicare, you will have a six month period to enroll in a Medigap plan with no medical underwriting. The period begins with your Part B effective date. This means regardless of your current health status or preexisting conditions you will be issued coverage and cannot be denied. For those older than 65 who have already enrolled in Part B and are coming off employer health coverage, there may be a guaranteed issue period of 63 days from the date your employer coverage begins. During this period you will not be asked Medical questions. This does vary by state and situation, so be sure you work with a qualified, independent agent who understands your situation completely.
Why Should I use an agent if I can just call the company direct?
Medicare Supplement premiums can vary as much as over $100 per month between companies for the exact same coverage. Also, the premiums are the same whether you enroll direct with a company or use an independent agent, however the key word is independent. For no extra cost you can use the skills of an independent agent who likely represents several of the top companies. They can check who has the lowest premiums and rate increases and choose a company based on your best interest, not theirs. And if you get a rate increase they can easily shop the market for you when you do to see if there are lower premiums with another company. If you sign up direct the insurance company will never tell you there’s a better rate with another company, because all they sell is their product.
Does a Medicare Supplement Plan include Part D drug coverage?
Medicare Supplement policies do not include prescription drug coverage. You will need to enroll in a separate Medicare Part D drug plan if you would like coverage. For those turning 65 you have until 3 months after your birth month to enroll without a penalty. Also, if you do not enroll during this time, you must wait until the next enrollment period to do so.
I just received a rate increase on my supplement, why is it so high?
Medigap companies set rates according to their risk pools and the group you are in. Rates are calculated based on the ratio of the amount of premiums coming into the group vs. the amount of claims being paid out. This is called the “loss ratio”. If a group has a large amount of claims, the insurance company must increase the rates to meet those numbers by law. The underwriting guidelines of the carrier can also play a part with premium increases as well. We can easily help you determine which carriers might be a better option based on your health and enrollment status, and the past track record of the company. That being said, no one including the insurance company knows what future rate increases will be.
Do I need to renew my Medigap Policy each year?
You do not need to actually renew a Medigap policy each year because they are guaranteed renewable each month. As long as you pay your premiums your policy will automatically renew unless you cancel it. Also in most cases rate increases and renewals are not based on a calendar year, as people sign up at different times each year. You may have a 1 year lock in on your rate and you signed up in April for example. This does not mean the following January 1st of next year you will see any changes.
Why are the premiums so different for each company?
Medicare Supplement rates are different with each company as they all have different claims history. As well, initial premiums must be approved at the state level with each state having their own regulations. Sometimes companies are well established but just release a Medicare Supplement product, and because they have no history of claims their premiums will be lower than others.
Will my Medicare Supplement insurance pay a claim if Medicare doesn’t?
A Medicare Supplement policy will never pay any amount of medical bills unless they are Medicare-approved expenses, in which case Medicare pays first. They only supplement Medicare, they do not pay if Medicare doesn’t.