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.

Effects of “Obamacare” on Medicare & Medicare Supplements

“Obamacare”, or the PPACA, was signed into law in March 2010. Many of its provisions have been slowly becoming integrated into our health care system. And, in 2014, many of the individual health provisions take effect. For people on Medicare, many are wondering how “Obamacare” will affect them. As a Medicare Supplement brokerage, this is a question we receive almost daily.

If you have Medicare, regardless of what type of supplement coverage you also have (if any), you will be affected by the PPACA. First of all, there have been some relatively significant changes to how the “donut hole” is administered on Part D (Rx coverage). If you have not “felt” these changes yet, it is because they are being rolled out little-by-little over the next few years, culminating in 2020.

On Medicare itself, although there were many significant changes discussed, the coverage on Parts A and B (hospital and doctor’s office, respectively) were not overhauled or changed in prolific ways. Some things were changed, however. These include more preventive care being covered (i.e. wellness checks) and more protection against fraud and abuse of the system.

Now, as you no doubt know, this legislation did not come without a price tag. Some of the PPACA was paid for through reductions in funding to privatized Medicare plans called Medicare Advantage. These plans, although they still exist, may experience reduced funding and thereby not be able to deliver benefits that are as “rich” as they have been in the past.

For Medicare Supplement policyholders, the changes are non-existent to your current policy. Nothing changes about your plan or coverage. The PPACA did not even change the standardized plans chart, although this was a part of some of the discussions and may happen in the future. Medicare Supplements remain one of the few relatively stable things about the current state of affairs in our healthcare system.

If you have questions about this or how your coverage has been, or will be, affected, feel free to contact us online or call 877.506.3378.