Medicare Supplement Quotes
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Medigap Plan Information and Quotes
The purpose of comparing Medigap quotes is to ensure that you are not paying too much for the same thing. Many people who get Medicare Supplement insurance do not realize that coverage is the exact same, so they sign up with the first company that sends them information, has a good TV commercial or that their friends or neighbors have. However, much savings is to be had by simply getting quotes, comparing the options and making an educated choice.
Here are the top three mistakes made when comparing Medigap quotes and choosing a plan:
- Going on 10 websites to request information.You may wonder why we would say that. After all, that's how we do business. However, we recommend using only one, at most two, independent agencies, to compare rates and coverages when comparing plans. Independent agencies/agents all have access to the same rates/plans, so you will get the same coverage or rates, no matter how you sign up. Comparing rates from dozens of agencies only further complicates the matter and adds to the enormous amount of "junk" you will receive. So regardless of who it is, be careful how much you put your personal information out there. As a side note, try to find websites that are actual agencies, NOT "quote farms" who will sell your personal information to 8-10 agents.
- Choosing a company based on something OTHER than price. Many people overcomplicate what can be a simple process. You see, with Medicare Supplement plans, coverage and claims are handled the exact same way, regardless of company. What this means is that a Plan F with one company is the exact same as a Plan F with another company. Legally, the companies cannot add/subtract anything from the standardized coverage. So, you should make company premium rates the primary focus of your comparison and decision process.
- Not understanding the difference in the two options - Medigap and Medicare Advantage. When you are looking at Medicare insurance, there are two options – Medigap and Medicare Advantage. These two options are very different and to make a choice between the two, you should understand the implications of both. While Medicare Advantage is frequently less expensive, there are some drawbacks, including doctor availability, claim payments, and future changes, that you need to understand before selecting this option. Medicare Advantage is NOT a Medicare Supplement - it doesn't supplement Medicare, it replaces it. An independent agent should be able to explain these differences to you to your satisfaction.
What Do Medicare Supplement Plans Cover?
Medicare Supplement plans supplement the parts of "original" Medicare - Medicare Part A and Medicare Part B. By itself, "original" Medicare covers many things; however, there are several deductibles that are a part of Medicare. Additionally, Medicare covers (for most services) 80%, leaving an unlimited 20% as the responsibility of the individual. What a Medicare Supplement does it come in where Medicare coverage ends. The top level Medicare Supplements (i.e. Medigap Plan F) cover both Medicare deductibles (Part A and Part B deductibles), as well as the 20% that Medicare doesn't cover at the doctor and hospital.
Lower tier plans, such as Medigap Plan G and Medigap Plan N cover many of the "gaps" in Medicare but not all of them like Plan F does. Plan G, for example, does not cover the Medicare Part B deductible (which is $162/year for 2011); however, in the case of Plan G, the monthly premium savings off of a Plan F is often greater than that annual $162 deductible, making Plan G a better overall value. Plan N also does not cover that Part B deductible. Additionally, it has some small co-pays that the insured must pay at the doctor (up to $20/visit) and emergency room ($50/visit). Again, the premium is lower than on Plan F, so the monthly savings may make this a plan to consider, depending on your health and needs.
There are also other plans, although these three have been the most common/popular over the last couple of years. Other plans are similar with some small differences. The standardized Medigap coverage chart shows what all plans cover. All companies must offer plans straight from this chart - this is Federally-mandated. So it is easy to compare Medicare Supplements based on price and company reputation, since coverage is the same. You can view the standardized plans chart here: Medigap Coverage Chart.
Medicare Supplement Rates
Medicare Supplement rates vary from state to state. While many of the same companies operate nationwide, they set their rates on a geographical basis. That is just one of the factors that determines the rate you will pay for a supplement plan. Other factors include:- Age
- Gender
- Zip Code
- Tobacco usage
- Height/weight (with some companies)
Generally speaking, with Medicare supplements, there are no “rate-ups” as there are with some other types of insurance. When you apply, you are either approved or declined based on your answers to the health questions on the application. However, if you apply during an “open enrollment” period or “guaranteed issue” period, you do not have to answer medical questions. Also, some states have special enrollment periods or rules that preclude you from going through medical underwriting. Check with an independent agent to find out more about your eligibility.
There are also a few different methodologies that companies use to set their plan rates. These can determine how quickly rates change over time and to what extent; however, all companies will go up in price over time. The difference is what those increases will be based on. If an agent tells you a certain company does not ever increase the premiums, our advice is ‘hold on to your wallet!’ The three rating methodologies for Medicare Supplement rates are:
- Attained-Age Rated: This is, by far the most common of the rating methodologies and probably the most straightforward. You pay the premium based on how old you are at the time. Premiums go up as you get older. These plans are generally most competitively priced.
- Community-Rated: Some companies use this methodology in all states and some companies use it a select few states. This is when the companies set the rates the same for everyone in a certain area without consideration of their gender, age, or whether they use tobacco. Rate changes are based on claim ratios within that community.
- Issue-Age Rated: This is the least common of the rating methodologies. Issue-age plans start very high (often double the attained-age pricing) but do not go up based on age, only on claims experience of people that have the plan. They do, however, go up over time, typically on an annual basis.
Getting Medigap Quotes - Five Things to Keep in Mind
Comparing Medigap options can be a time-consuming, overwhelming process. However, it doesn't have to be that way. If you are turning 65 or going on Medicare, you will, no doubt, be inundated with offers from lots of different companies and plans. Here are a few things to keep in mind when getting Medigap quotes:
- Plans are completely standardized. There are no variations from one company to another, within the same plan. Many people try to find the "catch", since pricing can vary so greatly. Medigap rates are just like anything else on the free market - the companies set the rates based on demand, their administrative costs, etc., which leads to the large variation among equal plans.
- You do not have to pay more or less to use an agent. One agent does not have better rates than another, and rates are not better (or worse) by getting a plan directly through the insurance company.
- An independent agent, or broker, can give you information on multiple plan options so you can compare in an unbiased, centralized place.
- Many agents will recommend, even push, Medigap Plan F. This IS the most comprehensive, and most common, plan; however, that doesn't mean it's always the best choice for you. In reality, sometimes the lower-tier plans, such as Medigap Plan G or D are more advantageous, when you weigh the premium savings against the benefits you give up.
- Medigap quotes can change from time to time. Companies often revise their rates once a year, so rates can change. If you are in open enrollment, due to turning 65 or going on Medicare, you can "lock in" your rates as early as 6 months in advance of when your Medicare starts. So this can save you some money for your first year of coverage.
How Do Medicare Supplement Plans Work?
Medicare Supplement plans all work the same way, regardless of which company sells you the plan. First and foremost, they are standardized, so coverage is the same across "like" plans. Secondly, they can all be used at any doctor or hospital, nationwide, that takes Medicare. There are no networks for Medigap plans. Additionally, the plans pay claims through the same Medicare "crossover" system, so regardless of which company you have, your claims will be paid in a timely manner and directly to the doctor/hospital without your involvement in the claims process.
A common misconception about Medicare Supplement plans is that there is an annual enrollment period. This is not the case. On the contrary, you can sign up for or change your Medicare Supplement plan at any time of the year. Companies may use medical underwriting when you do this (in most states); however, they do not limit when you can sign up. Medical underwriting varies from company to company, so if you have pre-existing conditions, it is highly advisable to work with an agent that can advise you of your options.
The Advantages to Getting a Medicare Supplement Quote
There are many advantages to getting Medicare Supplement quotes. If you are just now turning 65, it is important as a way to understand the different options and choosing a plan. If you are already on Medicare, it is a great way to put extra money in your pocket and we recommend re-evaluating your plan every two years (at a minimum). Here are the primary advantages to getting Medicare Supplement quotes:
- Since coverage is standardized, it is easy to compare plans based on rates.
- Rates change every year with many supplement plans, so it is important to verify that you have the best option available to you.
- It is easy to do and doesn’t require any obligation on your behalf.
- New companies and plans enter the marketplace each year, which affects the rates.
- Lastly, it can provide thousands of dollars in savings a year.
When Can You Enroll in a Medigap Plan?
Contrary to popular misconception, there is NOT an annual enrollment period for Medicare Supplement plans. You can enroll in, or change, your Medigap plan at any time. The type of plans that have an annual enrollment period are Part D plans and Medicare replacement plans (i.e. Medicare Advantage).
The best time to enroll in a Medigap plan is during your "open enrollment" period, which occurs when you turn 65 or go on Medicare for the first time. After that point, you can enroll; however, if you do it outside of your initial open enrollment period, you do have to qualify medically to get a plan. There is another period called "guaranteed issue" - these periods occur, in most cases, when you are losing other coverage (i.e. Medicare Advantage, employer coverage, etc.).
If you have questions about your eligibility to enroll in a Medicare Supplement plan, the best thing to do is check with your agent or the company you are considering. Underwriting requirements can vary by state and company, so it is important to speak with someone knowledgeable about the requirements and restrictions in your specific situation.
