Healthcare costs. Premiums. Deductibles. Prescription drugs. It all adds up!
How much is Medicare? How much money do I need to have set aside to cover my healthcare expenses?
You’re not alone if you have concerns about the continually rising costs of Medicare, medications, and healthcare in general. Healthcare is the second-biggest spending category in senior households according to data from 2020, averaging over $6,600 a year. (source)
What does all of this mean? Rising healthcare costs put seniors at risk because it means older Americans may postpone or skip vital care visits due to cost-related reasons. We do not advise this! It is so important to have routine medical care and easy access to healthcare. Even though Medicare is designed to help provide financial protection, many older adults are still facing a significant financial burden when it comes to healthcare.
Like most Americans over 65, you may be living on a fixed income. What do you do if you get a health insurance rate increase you can no longer afford to pay?
You have options if any of this information applies to your situation.
Today we have answers for you. We’re talking about how to save or reduce your Medicare Supplement Plan premium, and why it’s important to work with an independent agent!
Affordability in Medicare is a Big Deal
As we’ve explained when we have talked about Medicare costs in our past blogs, your costs are made up of several things: Medicare Part B Premiums, IRMAA Charges, Medicare Supplement Plan premiums, your deductible, your prescription drugs, etc. All of these costs vary depending on your income, your plan, and your medications.
Often times I refer to the phrase “Knowledge is Power.” This is exactly when this phrase comes into play. You can save significant costs by doing your research on supplement plans and guidelines around changing plans when rates increase.
Why Does Medicare Vary So Much?
As a reminder, the Medicare supplement plans are standardized. This means that the same supplement policy in any state and with any insurance carrier, has the exact same benefits. Coverage and benefits are determined by the federal program, not the insurance carriers. While the insurance carrier does not dictate coverage, they can and do charge varying premiums for the exact same plan. This means you could be paying more than someone else is for the exact same coverage! Therefore it is critical for you to work with an independent agent instead of a captive agent who only works for one carrier.
If you find you have a high rate increase one year on your premium, you can switch into the same exact plan with a different carrier and save money each month, and nothing else will change. You would have the same medical plan, same coverage, and same benefits, just a different insurance carrier. And of course, less money out of your pocket! It’s a win win.
Medicare supplement plans have annual rate increases to keep up with healthcare inflation but also tend to have rate increases based on age. Typically, rates increase at a higher percentage as you age. If and when you receive a rate increase, it is important to know your options. And equally important is to be certain you’re working with an independent agent, who can search the entire market for you, analyzing every insurance carrier available to provide you options to lower your rates.
Changing Your Medicare Supplement Plan from One Insurance Carrier to Another
Medicare supplement plans have no locked in time periods so you can change your plan any time of year. As usual, there are certain guidelines and rules to be aware of.
When you first enroll in Medicare Part B, you have a six month window where you are able to enroll in any supplement plan without questions about your health or acknowledgement of preexisting conditions. This means there is no medical underwriting for your approval for an insurance policy during this one time only- time frame.
Generally speaking, after that 6 month period, if you want to change your supplement plan from one company to another, for example after a rate increase, or to change which plan you are on, you will need to undergo medical underwriting and answer a set of health questions.
What is Medical Underwriting?
Most applications in this process have a one-page list of health questions that need to be answered ‘no’ for the insurance carrier to approve the policy. In these situations, an underwriter will review your application and decide whether to issue you a policy or decline your application based on the health information provided.
Your agent can and should review the questions with you, so that you can both determine if you would be eligible for approval. If you answer ‘yes’ to any of the questions, your agent should advise you that you are not eligible for the policy.
There are some conditions that get timed out, meaning if you are a certain amount of time past a diagnosis, you are approvable. In some instances, you may be declined one year but not the next, so it is important to keep those dialogues open with your agent.
These medical health questions are typically regarding chronic health conditions, pending medical visits or surgeries, recent hospital stays, and prescription medications.
Are you paying too much for your Medicare Supplement Plan premium? Be sure to talk with your agent about switching carriers! Your medical and financial security are directly tied to your Medicare plan. Let Medicare Dana at JBird Insurance help you understand all your options to plan for your future.