• How Medigap plans are priced — and how to save on yours «


  • How Medigap plans are priced — and how to save on yours

  • Medicare users can buy a supplemental health insurance plan, called Medigap, to cover some of the costs that Original Medicare does not cover, such as co-payments, deductibles and co-insurance.

    There are 11 standardized Medicare supplement plans. However, not all 11 are available in every state. Massachusetts, Minnesota and Wisconsin have their own plans with different names.

    [Let Insure.com help you find affordable health insurance now.]

    It is important to shop around, since insurance companies may charge different prices for identical plans, says Lucas Burton of Golden Age Providers in Largo, Fla. “Everyone is selling the same thing though their prices may vary.”

    Companies that offer Medicare supplement policies use three different methods to price them:

    Attained age. These policies should have the lowest premium if you enroll at age 65. However, the premiums will increase as you get older, typically every year, every three years or every five years. The premium increases are in addition to any rate hikes by Medicare when it adjusts for inflation. With attained age policies, the premiums are likely to be at their highest when you’re in your 80s and 90s and least able to afford them, Burton says.
    Issue age. The premiums for these policies are based on your age when you buy them and will not increase as you get older. They still may increase, though, as Medicare adjusts for inflation.
    Community-rated. With these policies, everyone in the same geographic area pays the same premium no matter their age. “Very few carriers do community-rated anymore,” says Cheryl Matheis, senior vice president of health strategy for AARP.
    How much will you pay for Medigap?
    How much you pay for your Medicare supplement insurance will depend on:

    Where you live.
    Which of the Medicare supplement plans you choose.
    How old you are when you enroll.
    What type of plan you buy (attained age, issue age or community-rated).
    There are ways to keep your premiums low but still get the coverage you need. Choose a plan when you’re first eligible for Medicare. “That’s when you will have the broadest choice,” Matheis says.

    If you choose a plan when you’re first eligible, you can’t be turned down for having any pre-existing health conditions, she notes. If you buy at a younger age and choose an issue-age-rated policy, your premiums can’t go up just because you get older. Issue-age rated policies are a bit more expensive at the start, but are generally worth it if you live into your 80s and 90s, Burton says.

    How much Medigap do you need?
    Supplemental plans that offer the most robust coverage will cost more. If you choose a plan that doesn’t have co-pays, you’ll make up for it in higher premiums. You have to decide whether you want to pay for your health insurance upfront in premiums or at point-of-service, Matheis says.

    Think about how often you visit the doctor and how likely you are to need health-care services during the year. Some plans have lower monthly premiums but cover less of your co-insurance and co-pays than others.

    For example, Medicare supplement “Plan K” offers a lower monthly premium than “Plan L,” but it has a higher co-insurance amount and a higher out-of-pocket limit.

    Using insurance brokers
    An insurance broker who represents multiple companies will be best able to help you find the most suitable plan at the best price, Burton says. Also, your broker will be able to help you review your choices year to year. If your health or circumstances change, you may want to switch plans and you may be able to pay lower premiums.

    Use the Internet to investigate plans and pricing. Many seniors are technologically savvy. If you don’t have access to a computer or the Internet, you can go to a library or a center that assists seniors. You also may be able to ask your children or grandchildren to help you do research online.

    Getting Medicare supplement quotes online
    Burton suggests shopping online because if you invite sales people to your home, “you’re going to get 10 different people telling you 10 different opinions, and telling you whatever they’re selling is the best.” When you shop for Medicare supplement quotes online, you generally have many options and can compare insurance quotes from multiple carriers.

    More from Beth Orenstein here


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