Three Reasons the Name of Your Medigap Company Is Not Important

One of the most common thoughts, and understandably so, for many people “shopping” seniors looking at computer
for a Medigap plan is what company or companies have I heard the most about. This leads to people looking, primarily, at the companies that do the most marketing or the company that a neighbor or family member has. While this can lead to some good results – personal testimonials are often a great predictor of future performance – it can also lead to some “tunnel vision” and a lack of understanding of how the plans actually work and what factors should truly go into your decision-making process.

Put simply, the name of your company – even the rating of the company – is not ultimately very important when it comes to choosing a Medigap policy. This does not hold true with other types of insurance, where there are more variables and less standardization. But for Medigap insurance, the name of the company is virtually irrelevant. Here is why:

  1. First of all, the plans are Federally-standardized. This means that the coverage with one company is the same as the coverage with another company. For example, a Plan F with one company is the same as a Plan F with another. This means that price is, or should be, the primary differentiating comparison factor.
  2. Claim payments are paid through the Medicare “crossover” system. This is the same system used by all Medigap companies – it links your “original” Medicare Parts A and B up with your Medigap and insures that claims are paid on the same time schedule and in the same amount regardless of who your Medigap company is.
  3. You can use any doctor or hospital that takes Medicare regardless of which company you have. Different plans are not more or less widely accepted. As long as your doctor takes Medicare, he/she is required to take any of the standardized Medigap plans. Note that doctors offices, and particularly those that work in the insurance/billing offices, are not always well-versed on the different types of plans. And, some companies offer both Medigap and Medicare replacement plans like Medicare Advantage. Very often, someone in the billing department will say that they do not “accept” a certain Medigap plan, when in reality, they don’t have a choice as all claims are paid through the Medicare “crossover” (see point #2 above) and they are not filing specifically to the individual companies anyway.

It is important not to make a decision on a Medigap plan simply because you’ve heard the plan pays well or someone else is “happy with it”. Frankly, everyone is (or atleast should be) happy with their Medigap plan’s claim-paying performance because it is the very same from company to company. It is prudent to have an understanding of the above three points and compare Medigap plans on what really matters – price – before selecting a plan based on imagined or superficial differences. Otherwise, you could, like many others, end up paying “extra” every month for the exact same products that works the exact same way.

If you have questions about this or want to further discuss, you can contact me online or call 877.506.3378.

2014 Medigap Plans

2014 Medigap plans will be the same, coverage-wise, as 2013 Medigap plans. With Medigap, coverage is Federally-standardized and all plans go by the Medigap coverage chart. This has been changed in recent years – effective June 1, 2010 – but since that point there have been no changes to the coverage chart. The Federal government – CMS, really – is the one that sets forth this chart and determines what Medigap plans will cover. Although the prices for the plans from different companies can vary considerably, this ensures that the coverage is the same for “like” plans. In other words, a Plan F with one company is the same as a Plan F with another.

So, although the coverage on the 2014 Medigap plans is the same as the 2013 plans, there are other factors to consider. First of all, many people mistakenly think that there is an annual enrollment period for Medigap plans – this is not the case. The annual enrollment period that runs October 15-December 7 is actually for the Part D Rx plans and the Medicare Advantage plans, which take the place of Medicare. For Medigap plans, you can sign up for, leave, or change plans at any time of the year.

As far as companies and rates go, there are always changes going on with Medigap. Over the past year or two, there have been several new companies to enter the marketplace, including CIGNA, AFLAC, Stonebridge Life, and Central States Indemnity, that have very competitive rates in many states and are striving to become market leaders due to price competitiveness and financial stability.

Just like there is not an annual enrollment period for the plans, Medigap rates do not change with the calendar year necessarily. So while your Medigap company may change rates 1/1/14, it is more common that your plan will change rates on your policy anniversary date.

Moving into 2014, it looks like the aforementioned companies, as well as some old “stand-bys”, such as Mutual of Omaha, AARP/United Healthcare, Aetna, etc will continue to be prominent players in the national Medigap market. The rates, of course, depend on what state you are in, your age, gender, and sometimes, other factors. So, it is important, if you are comparing plans, to get an accurate depiction of what is available in your area and what the actual rates would be.

Medicare-Supplement.US is a leading, independent Medigap brokerage that works with 35+ companies in 39 states. If you want a comparison for your specific situation, contact us online or call us at 877.506.3378.

 

Time for a Check-Up… A Medicare Supplement Insurance Check-Up

Your doctor or dentist sends you a postcard or gives you a phone call when it’s time for your annual or bi-annual check-up. This is important to your physical health – ensures that any medications are doing their job and being administered in the correct dosages, it can be preventive of future problems. In short, it helps to maintain your health. Likewise, doing a periodic check-up on your Medigap insurance is a crucial part of any sound financial plan.

Medigap insurance, if you don’t already know, is the type of insurance that people on Medicare obtain to fill in the gaps in Medicare Parts A and B. These plans are Federally-standardized, so coverage is the same from one company to another. However, costs can vary considerably. For example, the same Plan F with one company may be $145/month while it is $100/month with a different company (all Plan F’s provide the same coverage and work the same way).

For this very significant reason, it is essential to perform a periodic check-up of your Medicare Supplement insurance. I typically recommend that you do this on an annual basis, although I have some clients that do it every two years. Regardless of how often you do it, it is essential that it gets done.

So, what exactly does this look like – a Medicare Supplement check-up? Well, first and foremost, it is essential to understand the basic tenets of Medigap insurance (the terms Medigap and Medicare Supplement are interchangeable). The basic tenets are: the plans are standardized, the coverage is the same from one company to the next, the claims are all paid through the same Medicare “crossover” system, and there is not an annual enrollment period (you can change at any time).

Next, you can simply compare the rates for the plan that you have. If you have Plan F, for example, as around 40% of people do, you can compare other Plan F rates very easily. If you find one that is less expensive, which is very likely if you have been in the plan more than a year, you can simply change plans and realize an instant savings for the same coverage.

Because this is our specialty, we work with many clients who are doing this. Some of the biggest concerns/questions are changing plans and the perceived “risk” of getting with a company that does not “pay as well”. It is important to understand that, with Medigap policies, companies pay through the Medicare “crossover” system, so claims are paid on the same time schedule in the same amount, regardless of company. There are, literally, no experiential differences from one company to the next.

So, what are you waiting for? Whether it is through us (compare Medigap rates) or someone else, get the comparison of the Medigap plans in your area. Compare the rates to what you are paying now and see if you can save yourself some money.

If you have questions about this information or wish to speak to someone directly, contact us on Twitter, email or fill out our quotes request online.

 

2014 Medigap Plans and 2014 Medigap Rates

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.

May 2013 Medigap Plan Report

Contrary to popular misconception, there is no such thing as an annual enrollment period for Medigap plans. In reality, you can change, or sign up for, a Medigap plan at any time of the year. There are no restrictions on when you can sign up for this type of plan.

The rates for Medigap plans can change during the year also, and many companies do change rates mid-year. Because of that, it is important to stay “on top” of your rates and compare rates when your rate changes or if you feel like you are paying too much. In almost all cases, if you have been on a plan more than a year, you can obtain the same coverage for a lower price through a different company.

May is as good a time as any to sign up for, or change, your Medigap plan. There are several newer companies that have become major players in the Medigap market in recent months. Some of the “old” names are still prominent – i.e. AARP/United Healthcare and Mutual of Omaha. But also, new companies like Central States Indemnity, Forethought, AFLAC, and Cigna Supplemental Benefits are competitively priced in many states and making a name for themselves in the Medicare marketplace.

Keep in mind that, with Medigap plans, the coverage, claim payments and doctor acceptance are the same with all of the companies. So there is no variation from one company’s plan to another, although the rates can vary greatly.

Overall, in the last three to five years, rates have certainly trended upward in most states. However, in recent months, with the influx of new companies offering lower, more competitive rates, rates may have actually come down in quite a few markets.

Plan F continues to be the most prominent plan, holding 40+% of the market share. However, people are purchasing Plans G and N at increasing amounts, as the Medicare-eligible population becomes more educated on the differences in the plans and how the benefit differences line up with the premium differences. For many people, particularly those in good health, Plans G and N actually make more sense than the more common Plan F.

If you have specific questions or want to get quotes that are customized for your age and zip code, you can contact us online at Medicare-Supplement.US or toll-free at 877.506.3378.

 

New Insurance Companies in the Medicare Marketplace

Medicare Supplement market is always changing. Companies change rates frequently, and sometimes, the companies themselves change. That has been the case even more so recently, as several “big name” insurance companies have entered the Medigap insurance sphere. Below, we’ve mentioned a few of these for reference and your future exploration. Note that not all companies do business in each state, so you would always need to check with your Medicare insurance agent to see what is available in your situation.

AFLAC – The “duck” has re-entered the Medicare marketplace, and they are competitively priced in many states, including GA, AZ, TX and NC to name a few. They are ‘A+’ rated by AM Best.

Central States Indemnity (owned by Berkshire Hathaway) – Central States Indemnity offers plans in many states now. They have made a name for themselves quickly in this space, among agents and clients, due to moderate rate increases. It is a good option in a good number of states, and they also now offer Plan G in many states. They are rated ‘A+’ by AM Best.

Combined Insurance – Combined Insurance is an older insurance company that has been around for a while. They are a reputable company with competitive rates in many states. They are rated ‘A’ by AM Best.

CIGNA – CIGNA is one of the largest insurance companies in the country. They recently purchased Great American Senior Benefits and its subsidiaries. They recently came out with a plan through one of those subsidiaries, which looks to be a competitive option for new turning-65 customers and those already on a plan with a different company.

This list just names a few. There are, of course, lots of options when it comes to Medicare insurance. However, some states have more options than others. As always, it is important to compare both the premiums of the plans offered and the company financial strength ratings. Since coverage, claim payments, and doctor acceptance are the same among plans, those are the factors that are more important to consider.

If you have any questions or want to get some quotes from the companies that are offered in your zip code, please contact us by phone (877.506.3378) or online at Medicare-Supplement.US quotes.

Medigap Rates – Who Determines Them and Why Do They Go Up?

Medigap rates change over time. That is, quite simply, a fact. Some companies will be more stable than others – some plans are more stable than others. But overall, all rates, regardless of the company, plan or where you live will change. The important thing is understanding how those rate changes work, when they occur and why they occur. This allows you to minimize the effect rate increases have on your pocketbook and know when to make changes to your plan if necessary.

First of all, rate increases are always approved by the state departments of insurance. Your state is responsible for screening both the increase itself, as well as the size and administration of that increase (i.e. when it occurs). You cannot be singled out for an increase. One of the most common questions that we receive is… “I have not been to the doctor’s office but once all year, so why is my rate going up?” Unfortunately, that is not the way insurance works. Your rate goes up based on the claims experiences of everyone who has that company in your geographical area (usually in your state). So, your rate, when it goes up (not IF, but WHEN) will go up based on a percentage. For example, if your Plan F rate is $100 and the company has a 6% increase on Plan F rates, your new rate will be $106. The company is required to give you advance notice of any rate changes – 30 days in most states.

There are many things that differentiate the increases that companies will have. Besides geographical and claims experience factors, there is also the factor of which plan you have. In other words, most companies have different size increases on different plans. In general, a plan that is not Federally-required to be offered on a “guaranteed issue” basis in certain situations will be more stable over time. The plans that are required to be offered in “guaranteed issue” situations (i.e. losing employer coverage or Advantage plan coverage) are A, B, C, F, K and L. The other four plans would be, historically speaking, more stable over time due to NOT having to be offered in “guaranteed issue” situations.

Now, when your rate is going to go up, you do have some recourse, particularly if you are in relatively good health and are getting a significant increase. There are NO enrollment periods for Medigap plans (When is the Medigap enrollment period?) so you can change plans any time that your rate goes up. It is always advisable to re-evaluate your rates against those of other plan options when your rate goes up.

If you have questions about this or would like a rate quote comparison for the plans available for your age and zip code, please call us at 877.506.3378 or contact us on our website at Medigap quotes from Medicare-Supplement.US.

How Does Medicare Part D Work?

Medicare Part D, the part of Medicare that covers prescription drugs, is sold by private companies, who are authorized by the Government’s Medicare program to provide Part D plans. These plans are approved on an annual basis, and generally, are sold as an annual contract.

In most states, there are 30-40 plans that are offered and premiums range from approximately $15/month to $100+/month. So there is a big range. Likewise, there is a big variance in the benefits provided by the plans, so it is essential to compare based on your specific needs, medications, etc. The plans can, and often do, change each calendar year. If your medication needs change, the plan changes, or something changes about your health, you can, and should, re-evaluate the plans on an annual basis. You can change plans during the annual election period (AEP), which runs from October 15-December 7 each year.

Medicare Part D plans can typically be used at most “chain” pharmacies, and many plans also have a mail-order option. However, it is important to check with your current pharmacy, particularly if you use a local or independent pharmacy, to make sure that they accept your plan.

When you pick up your medications at the pharmacy, you will pay a co-pay amount that is called the “Initial Coverage Level”, unless you have not met your plan deductible or have entered into the “coverage gap”. If you enter into the coverage gap, which starts at $2930 in retail costs, you will pay a larger portion of the costs of your medication – 50% on brand name medications and 95% on generic medications.

Part D plans can be used nationwide, in most cases, at chain pharmacies that accept your plan. However, if you plan to be traveling, it is always a good idea to either take your medications with you or call ahead to make sure there will not be a problem picking up your medications where you will be.

Part D plans are an important part of your future financial security, as the average person on Medicare does need multiple medications at some point. That said, it is an optional part of Medicare. You do not have to enroll in a Part D plan. If you do not, though, there is a penalty that Medicare charges. The penalty is 1% per month that you don’t have a Part D plan. This 1% is applied to your premium when you do sign up for a plan. For example, if you decline a plan for a year, then you would pay a 12% penalty on your premium when you do sign up.

If you have any questions about Part D or want more information, please contact us on our Website. Or, you can call us at 877.506.3378.

 

Medigap Plan N – Who Is Choosing This Plan?

Medigap Plan N is a relatively new Medigap plan. It came out as part of the revision of the standardized plans in 2010, and it has really become one of the more popular plans. Due in large part to the incorporation of the plan into many companies offerings, many people are choosing it as a lower-cost alternative to some of the other Medigap plans. So, what is Plan N and who is choosing this plan?

First and foremost, you must understand what Plan N covers:

  • It is the same as the more expensive plans at the hospital (Medicare Part A). It still covers the Medicare Part A deductible and the 20% that Medicare doesn’t cover at the hospital, skilled nursing facility, etc. (Part A costs).
  • The differences come under Part B. Plan N doesn’t cover the Medicare Part B deductible ($140/year for 2012). Also, Plan N doesn’t cover the Medicare Part B Excess charges. These are very rare but occur when a doctor does not accept Medicare “assignment” (in other words, he/she doesn’t accept the Medicare payment schedule). The doctor can charge up to 15% over the normal Medicare payment schedule, and Plan N doesn’t cover this (What Are Part B Excess Charges?). This, incidentally, only happens in about 1% of cases nationwide. Lastly, Plan N does include some small co-pays. The co-pays are $20 for doctor’s visits and $50 for a trip to the ER. So, there are really three differences: Part B deductible, Part B excess charges, and co-pays.

With these differences in mind, you can see that, although ‘N’ is definitely a lower level of coverage than something like Plan F or Plan G, it can be a very good option and still provides comprehensive coverage, including the full coverage at the hospital that is so attractive about the Medigap plans. Moreover, because it is one of the standardized Medigap plans, it still provides the security of nationwide coverage, no networks, guaranteed renewability, etc. that all of the supplement provide – in contrast to Medicare Advantage plans which have co-pays like ‘N’ but are not national plans, all have networks and are not guaranteed renewable.

Plan N is typically about $40 less than Plan F, on average with most companies that offer it. Many companies have adopted it and now offer it as their alternative for people in good health who may not want to pay the larger cost for Plan F. It is certainly something to consider.

If you have questions about this information, want more information on Plan N, or want to get a Medigap Plan N rate for your area, please contact us on our website or call us at 877.506.3378.

Avoiding a Lapse in Coverage When Changing Medigap Plans

You can change Medigap plans at any time of the year, contrary to popular belief. Many people believe, incorrectly, that you can only change during the annual enrollment period, which is at the end of year. In reality, that time period only applies to Part D drug plans and Medicare replacement plans, like Medicare Advantage. With Medigap plans (Medicare Supplements), you can change plans at any time of the year.

Not only can you change plans at any time, it is highly advisable to do so, if you can save money by doing so. Rates for Medigap plans go up often, and to ensure you have the best deal available, you should consider changing any time your rate goes up (Help! My Medigap Rates Went Up).

When you do so, it is important to understand exactly how to do it. The most important thing is what we are going to cover here – how to change plans without experiencing a lapse in coverage or gap between plans. This is very easy to do and is nothing to be concerned about – certainly nothing that should keep you from making a necessary change.

  • First of all, when you change plan, you should complete a new application for the new company. You should apply for a future effective date. To be safe, I would always recommend an effective date at least two weeks in advance of the current date – 3-4 weeks is even better. It can take that long for a Medicare Supplement plan to get approved.
  • When you apply, you will list this future effective date. Then, the new policy will get approved. It is imperative that you do NOT cancel your current plan just because you applied for the new one. You could be turned down for coverage, experience some delay or numerous other things. You do not want to be without coverage and this will prevent that from happening. Do NOT cancel your “old” policy until you have the new policy or card in hand or confirmation from you agent that it has been approved.
  • Once the new plan is approved, and you have some confirmation of this, then you can cancel the old plan effective the same date that the new policy starts. Make sure you do not leave any overlap days in there, or else you will end up paying for two plans for those days. The policies should start/stop on the same date.

Changing plans does not have to be an intimidating process, although it is for many people. With a good agent and a basic understanding of the process, changing plans and saving money off of your premium is very easy to do.

If you want more information or want to find out if you can save money on your Medigap plan, call us at 877.506.3378 or visit our website linked above.