Medicare and Medigap Trends – Five Things to Keep Your Eye On

going on medicareLike many things, insurance is always changing. This has been particularly true over the last few years, and we believe it will continue to be the case into the future. As such, it’s a good idea to keep an eye on some trends that affect Medicare and Medigap insurance. We’ve listed five Medigap trends here that are pertinent for people on Medicare.

  1. Doctor acceptance of new Medicare patients. Some people have been concerned about this for years, and we have heard reports of doctors not seeing Medicare patients in certain geographic areas. Overall, I don’t think this will become a prohibitive problem. But nevertheless, if it occurs in large numbers, it could create quite a “bottleneck” effect for Medicare patients at doctor’s offices that do accept Medicare patients.
  2. Reduction in number of choices in Medicare Advantage plans. This is a trend that is certainly already under way. In many counties, there were 20/30 + plan choices in past years. Those numbers have been greatly reduced, and there are now some counties that have just a couple of companies offering plans. This is due, at least in part, to government regulations that have made it more difficult to make money in and participate in this market. Overall, I think its clear that lack of competition will be a bad thing for the overall appearance of these plans.
  3. Growth of “newer” Medigap plans – a move away from Plan F. This, too, is a Medigap trend that has already begun in earnest. Plan F, which is the most comprehensive Medigap plan, still has the majority of the market share in Medigap plans. However, with the onset of the 2010 re-standardization of plans, there are new offerings, some of which may appeal to different people and have a lower premium. One of the plans that appears to have caught on the most is Plan N, which is a lower level of coverage that still offers comprehensive Part A coverage but does have some out of pocket costs under Part B charges.
  4. The Online Movement. Because you’re reading this online, we’ll assume this comes as no surprise to you. As the next generation of “age-ins” turns 65, the likelihood will continue to increase that they are computer-savvy and more and more comparing and shopping for Medigap and Medicare plans will be done online. Companies will continue to endeavor to meet this demand by making more and more information available online. This and other Medigap trends will certainly have an impact on how companies “market” to the new generation of turning-65ers.
  5. New Medigap Companies Entering the Marketplace. We have seen several companies that are new to the Medicare market enter the fray over the last couple of years, trying to capture the large influx of Baby Boomers aging into Medicare. This includes companies like CIGNA, AFLAC and others, who have either begun or expanded their Medicare plan offerings recently. This will likely continue, with companies that have not offered Medigap plans beginning to do so.

Overall, it is a good idea to stay apprised of any changes to Medicare and Medigap insurance. Certainly, all of them will not affect you, and some may not come to fruition, but being aware of them allows you to be prepared if or when they do.

As always, if you have any questions or want to discuss further, you can contact us at 877.506.3378 or online.

South Carolina Medicare Supplement Plans M and N

June 1, 2010 marks an important day for Medicare Supplement plans in South Carolina and the rest of the country. The South Carolina Medicare Supplement plans are changing for the first time since 1992. We have addressed some of the changes in our previous post, which can be seen here: The 2010 Medigap Changes.

Possibly the change with the effect on the largest amount of people is the addition of Medigap Plans ‘M’ and ‘N’. These plans are totally new to the marketplace and have never before been offered. In fact, nothing like these plans has been sold as a Medigap plan previously. We’ve outlined the coverage that will be offered in those plans below, as well as what we believe to be the benefits of these plans, when compared to existing Medicare insurance options.

Plan ‘M’
Plan ‘M’ will be very similar to the current Plan ‘D’. It will still cover the 20% not covered by Medicare at the doctor’s office, hospital and skilled nursing facility. However, it will use cost-sharing in exchange for lower monthly premiums. The insured will be responsible for 50% of the Part A deductible, which is currently $1068 per benefit period. Current plans either cover the Part A deductible fully or not at all. Most people expect that the premiums for Plan ‘M’ to be about 15-20% less than current Plan ‘F’ premiums.

This plan may be a good fit for those who currently have a Medicare Advantage plan, that is terminating coverage or that they are leaving. Many of those individuals are used to having a hospital deductible, and with Medicare Advantage premiums expected to go up next year, Plan ‘M’ premiums project to be very close to Advantage plan premiums anyway.

Plan ‘N’
Plan ‘N’ is the second of the two new Medigap plans. This plan is also similar to the current Plan ‘D’, in that it covers the 20% that Medicare doesn’t cover at the doctor, hospital and skilled nursing facility. Instead of using a deductible method, like Plan ‘M’, this plan will use cost-sharing through co-pays to keep premiums lower. Insureds will have a co-pay at the doctor’s office of $20 and a co-pay of $50 for emergency room visits. This plan projects to have premiums that will be 30% less than current Plan ‘F’ coverage.

Just like Plan ‘M’, the expected market for Plan ‘N’ is the Medicare Advantage customers who are either losing or dropping their current coverage. Plan ‘N’ can definitely be a valid alternative for those losing or dropping this coverage, but who want to avoid Plan ‘F’ premiums.

Overall, the 2010 Medigap changes offer many benefits to those on Medicare+Medicare Supplement insurance, through additional benefits and new plan options. We get asked all the time how health care reform will affect them and their Medicare. While it remains to be seen what will happen with that and how it will effect those on Medicare, the 2010 changes have already been announced and everyone who has a Medicare Supplement should educate themselves about how this will affect them.