It is essential to understand that Medigap plans and rates are not mandated to go by the calendar year. That said, many of the companies do choose to change their rates along with the calendar year. Plan coverage, however, does not change – once you are in a plan, you are in that plan unless you opt to cancel it or do not pay the premium.
While the rate changes that may occur on 1/1/2014 have not been announced yet, it is not too early to get ready to compare plans. In fact, it is not too early to even compare the plans if you would like to do so. Since there is no annual enrollment period for Medigap plans, you can compare plans at any time and, if a savings is found, you can change plans for equal coverage and a lower premium.
Most companies do increase rates over time – annually in many cases – and when the rates do go up, it is generally advantageous to compare other options to see if there is a savings to be found.
Over the last 3-5 years, there has been a definite upward trend in rates for Medigap plans, on average, nationwide. However, rates have, on the whole, stabilized somewhat in the last 12 months, as many new companies (or new to the Medigap space) have released plans. This has caused mean rates, in many cases, to actually go down. It is too early to tell what rates will do moving into 2014, but with the onset of the ACA (“Obamacare”), I think it is reasonable to assume that overall health insurance premiums will go up. Although the ACA does not pertain specifically to Medicare products, I believe there will continue to be some effect on Medigap rates.
Another variable that could impact Medigap plans and rates for 2014 is the passage of legislation regarding what plans can be offered. There has been, over the past few years, much talk surrounding the 10 standardized plans and revamping those plans. There have been some changes made already – i.e. the elimination of Plan J, adding Plans M and N – but a common belief is that there will be additional limits on first-dollar coverage at some point in the future.
2014 Medigap plans and rates are still up in the air right now. Although we cannot, in May 2013, foresee exactly what the rates will look like on 1/1/14, we can say without certainty that Medigap plans are now, and by all accounts, will continue to be a vital part of a sound financial plan for those on Medicare. If you have questions about this information or anything else related to Medicare or Medigap plans, you can contact us at Medicare Supplement agency or 877.506.3378. Also, please check back to our website, as we will have more information about changes to Medigap plans or new plans or rates as this information becomes available.