Medicare supplement rates go up over time, just like rates with other types of insurance. Most companies increase rates each year on your policy anniversary date, while others do it annually with the calendar year. Others may have less frequent but larger increases. Regardless of when or by how much companies increase rates, the common thread is there – Medicare supplement rates go up over time. There is, unfortunately, no way around this. So, what can you do about it?
Well, first of all, it is important to understand that Medicare Supplement plans (also called Medigap plans) are completely standardized. The plans are the same regardless of which company sells the plan to you. In other words, if you have a Plan F, you can easily compare other Plan F option rates (from other companies) with the assurance that you are comparing “apples to apples”. This actually makes Medicare supplement rates the easiest to “shop” and compare.
Today, I spoke with a lady that was paying $210/month for her Medigap Plan F. For her age and zip code, the Plan F rates actually start at $148/month. She has had her plan for only 3 years, but she is paying almost $800 a year too much for her insurance, when she could easily get equivalent coverage and “pocket” the savings. Moreover, if she switched to Plan G (Find out why someone would/should do this), she could increase her net savings by another couple hundred dollars a year, all without sacrificing on coverage, claim payments, etc due to the standardization of plans.
Situations like the above story are an everyday occurrence. So many people – especially the Medicare market, frankly – prefer the “set it and forget it” method for insurance. However, this is a big mistake, particularly with a standardized insurance product with high price variability like Medicare Supplement plans.
So, what are the steps in comparing/reviewing rates to see if you can save money? Well, first of all, you should know what you have. Know what plan you have and what you are paying. You should be able to get this information by looking on your insurance card or policy and your bank statement. Next, contact an independent agent or broker that can help you compare plans in an unbiased way and provide you with a full comparison of the available options. We do that (Medigap quotes from SMS) but any agent that does business like us would be able to provide this information.
Next, you can review the quotes and make your decision (if there is a savings to be had, which there likely will be if you have had your plan for a year or more) based on price and, to a lesser extent, company rating/reputation. All you have to do is apply for a new plan with a future effective date (without cancelling your old plan). Then, once it is approved, you can cancel your old plan effective the same date that the new one will start and that’s it! You are all set and can “pocket” the savings.
If you have questions about this or how the process works, you can call us at 877.506.3378 or contact us online.