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How insurance companies set Medigap costs

Private insurance companies sell Medigap plans, and each insurer prices its plans differently. When deciding on a plan, consider your age and how the insurance company sets its prices. The way that an insurance company prices (or "rates") its Medicare supplement insurance plans can strongly affect what you pay later on, even if the plan costs are initially low. Buying from a highly advertised insurance carrier is not necessarily the best decision. There are many insurance carriers registered in the state of Indiana to choose. Look at their pricing history, look at their AM Best rating. At Indiana Insurance Alliance a significant part of our business is helping seniors get better premiums on their Supplemental plans. You can change plans and carriers at any time of the year. You do not need to wait for an OEP.

 

There are three ways an insurance company rates its Medicare Insurance insurance plans:

  • Under a community-rated or no-age-rated plan, all beneficiaries pay the same Medigap costs and premiums, regardless of age.
  • In an issue-age-rated or entry-age-rated plan, Medigap premiums are based on your age when you first enroll.
  • Under an attained-age-rated plan, your Medigap premiums are based on your current age in a given year.

Understanding the difference between Medicare supplements pricing options is good to know, but the point is somewhat moot because of all plans currently on the market increase as you age. Almost every insurance company only sells Age Attained plans. The few Community Rated plans available often offer discounted rates for the younger member, so the price increases as you age since the discounted rate is less each year you are enrolled. Therefore, it's best you choose the plan that offers the best rate when you first enroll but also, has a history of smaller rate increases as you age thru Medicare.

If you are trying to switch to a better Medigap plan, and especially if you are trying to change because of poor health, find out whether your insurance company considers current health status during Medigap enrollment. You may have guaranteed-issue rights even after open enrollment, depending on your situation and reason for changing plans.

Contact Indiana Insurance Alliance for free quotes on multiple plans and carriers.

* Pre-existing conditions are generally health conditions that existed before the start of a policy. They may limit coverage, be excluded from coverage, or even prevent you from being approved for a policy; however, the exact definition and relevant limitations or exclusions of coverage will vary with each plan, so check a specific plan’s official plan documents to understand how that plan handles pre-existing conditions.

Medigap Costs — Comparing the Prices of Medigap Insurance Plans

There are up to 10 Medigap plan types available in 47 states. Each plan is identified by a letter, and each letter has different, yet standardized, essential benefits. This means that no matter which insurance carrier you buy from, the essential benefits of each plan type of the same letter will be the same. In other words, a Plan G is a Plan G no matter what insurance carrier you purchase. That is why you should use an independent broker like Indiana Insurance Alliance to give you multiple options.

However, while the plans' basic benefits are standardized across insurance companies, Medigap costs can be vastly different. So even though you'll ultimately be getting the same essential benefits per the plan you choose, it pays to shop around for the best prices. Select the plan with the most competitive pricing from an independent broker like Indiana Insurance Alliance.

Buying a Medicare Supplement plan

The best time to buy a Medicare Supplement plan is when you are first eligible, during the Medicare Open Enrollment Period (OEP). This is the six-month window that automatically begins three months before your 65th Birthday and enrolled in Medicare Part B. During this time; you have a guaranteed issue right to buy a Medicare Supplement plan. Regardless of your health status or any pre-existing condition* you may have, the insurance carrier is required to sell you a policy regardless of your health status without charging you a higher price based on health status. During your OEP, you can choose any of the 10** Medicare Supplement plan options regardless of your health status, as long as those plans are available where you live.

If you don't enroll in a Medicare Supplement insurance plan during your OEP, you might not be able to buy the plan you want later on. The insurance company may require you to undergo medical underwriting and can reject you based on your health status, or charge you a higher premium.

In general, once your OEP is over, you can't get it back again and typically won't have guaranteed issue should you decide to change plans. However, certain exceptions may give you guaranteed issue later. Your age when you initially buy a Medigap plan can be an essential deciding factor concerning the Medigap costs you might pay.

The chart below shows necessary information about the different benefits Medigap policies cover.

Yes = the plan covers 100% of this benefit
No = the policy doesn't cover that benefit
% = the proposal includes that percentage of this benefit
N/A = not applicable

Medicare Supplement Benefits

Medicare Plans

A

B

C

D

F*

G

K

L

M

N

Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used up

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Part B coinsurance or copayment

Yes

Yes

Yes

Yes

Yes

Yes

50%

75%

Yes

Yes***

Blood (first 3 pints)

Yes

Yes

Yes

Yes

Yes

Yes

50%

75%

Yes

Yes

Part A hospice care coinsurance or copayment

Yes

Yes

Yes

Yes

Yes

Yes

50%

75%

Yes

Yes

Skilled nursing facility care coinsurance

No

No

Yes

Yes

Yes

Yes

50%

75%

Yes

Yes

Part A deductible

No

Yes

Yes

Yes

Yes

Yes

50%

75%

50%

Yes

Part B deductible

No

No

Yes

No

Yes

No

No

No

No

No

Part B excess charge

No

No

No

No

Yes

Yes

No

No

No

No

Foreign travel exchange (up to plan limits)

No

No

80%

80%

80%

80%

No

No

80%

80%

Out-of-pocket limit**

N/A

N/A

N/A

N/A

N/A

N/A

$5,240

$2,620

N/A

N/A

* Plan F offers a high-deductible plan. If you choose this option, this means you must pay for Medicare-covered costs up to the deductible amount of $2,240 in 2018 before your Medigap plan pays anything.

** After you meet your out-of-pocket yearly limit and your annual Part B deductible, the Medigap plan pays 100% of covered services for the rest of the calendar year.

*** Plan N pays 100% of the Part B coinsurance, except for a copayment of up to $20 for some office visits and up to a $50 copayment for emergency room visits that don't result in an inpatient admission.

Contact Indiana Insurance Alliance to walk thru all of your plan options and costs.

Are you tired of paying too much for your Supplement premium let us help you save money? You can change plans and carriers anytime throughout the year

Contact: Indiana Insurance Alliance

Website: www.INinsureALL.com

Phone: 765-462-6002

Email: kjones@INinsureALL.com

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