CHOOSING THE RIGHT MEDIGAP POLICY FOR 2018: A DETAILED GUIDE
“Get ready for Medicare Open Enrollment by choosing the right Medigap policy. Read on to learn what to expect in 2018, how to compare your options and the difference between regular and select plans.”
Choosing the right plan is the second step in the three-step process of purchasing a Medicare Supplement policy. If you’ve made it to this step, then you’ve probably already decided that Medicare Supplement insurance is a better fit for you than Medicare Advantage insurance.
Not sure if Medigap insurance is right for you, refer to our Medicare Supplement Guide which outlines the different parts of Medicare.
Now that you’ve decided to cover Medicare gaps with a supplemental plan you’ll want to determine which supplemental plan is right for you before you start comparing rates.
Or, perhaps you’ve already started to compare rates. In this case, you’ll want to make sure you’re choosing the right plan based on more than just the cost.
Review the information below to determine which supplemental plan is right for you.
COMPARING YOUR OPTIONS
There are 10 Medicare Supplement plans offered nationwide. These plans are standardized, meaning the benefits offered do not change from state-to-state or company-to-company. That is, except for Massachusetts, Minnesota and Wisconsin who have their own standards.
For example, a Plan F offered by Company ABC is the same as a Plan F offered by Company 123. The only thing that does change is pricing.
The chart below outlines the benefits covered by each plan.
Plan A is the most basic plan and Plan F is the most comprehensive. Plan F also offers a high-deductible plan with a deductible amount up to $2,200 in 2018.
Plans K and L are the only plans with an out-of-pocket limit which functions as a deductible. Once you meet your yearly out-of-pocket limit, and your yearly Part B deductible, these plans pay 100 percent of your covered services for the rest of the year.
UPCOMING CHANGES TO PLAN F & PLAN C
If you’ve done any research on Medicare Supplements, you’ve probably heard that a couple of the plans are being eliminated. The good news is that won’t happen until 2020. Starting then, plans F and C will no longer be available for new registrants.
The government is doing away with these plans in an attempt to control Medicare costs by reducing claims.
With baby boomers reaching retirement age and older, Medicare enrollment is at an all-time high. This is partially because, depending on the Medicare Supplement plan, doctor visits can cost next to nothing. This means that Medicare recipients are more likely to see the doctor frequently, even when it may not be necessary.
Since Plan F and Plan C both offer full coverage of deductibles, they’re being removed in hopes that Medicare recipients will be discouraged from visiting the doctor when it’s not necessary therefore reducing the number of claims made.
Those who join Medicare on or after January 1, 2020 will not be able to shop for or purchase a Plan F or Plan C. Plan G is considered to be their replacement. It offers the same benefits as Plan F, except the Part B deductible is not covered.
Fortunately, if you purchase your Medicare Supplement Plan F or C before the year 2020, you’re grandfathered in. You’ll get to keep your plan, as well as shop for and/or change companies after 2020. That is, as long as you qualify medically.
It’s important to note, however, that once Plan F is no longer available to new registrants the risk pool becomes stagnant and therefore prices will increase.
What is the risk pool? The price of a Medicare Supplement policy is determined by the combined health of all the members registered for that plan type. The healthier the members are, the less likely they are to need healthcare. The less likely they are to need healthcare, the less risk they present.
Once the risk pool is cut off, its members will continue to age, their health will continue to decline and they’ll be more likely to use coverage. That means that costs will rise.
HOW TO CHOOSE THE RIGHT PLAN
When shopping for Medicare Supplement plans, many people just choose the cheapest plan they can find. Since Medicare Supplement plans vary in coverage, it’s important to choose a plan that’s not just cheap enough but also comprehensive enough.
Consider your current health status. Are you prone to getting sick a lot? Do you have medical conditions that require seeing a doctor often?
Also, consider your family history and risk tolerance. Is there a history of late-onset diseases in your family? Are you at higher risk for getting sick later in life?
If you answered no to the above questions and you think you’re a fairly healthy individual, it’s likely that you could get away with purchasing a more basic plan like Plan A or Plan B.
If you answered yes to any of the above questions, it’s likely that you'll need a plan with more comprehensive coverage, like Plan F or Plan G.
The Popular Plan F
According to 2016 data from the American Association for Medicare Supplement Insurance, 60 percent of people who have Medicare Supplement insurance have a Plan F.
Why is this plan type so popular? Because insurance companies recommend it.
It's common for insurance companies to recommend Medicare Supplement Plan F because it provides the most comprehensive coverage (and it's more expensive). But, the only difference between Plan F and Plan G is that Plan F covers your Medicare Part B deductible.
For 2018, the Medicare Part B deductible is an annual payment of $183. While your Medicare Supplement insurance premiums depend on your age, health status and where you live, it's possible that you'll pay more than $183 a year for a Plan F than a Plan G.
To ensure you don't pay more than you save, we recommend taking your time to compare all your options to find a plan that fits your health and budget needs.
How to Comparison Shop to Get the Best Rates
As I mentioned, Medicare Supplement plans are standardized. Federal and state governments mandate that the benefits offered do not change from state-to-state or company-to-company (except for Massachusetts, Minnesota & Wisconsin.) What does change is the price of those plans.
Medicare Supplement insurance providers price their plans according to their risk pools. That means, if you shop around you may be able to find your same exact plan for less money.
But shopping around can be time-consuming, right? That's why Ensurem has simplified the process with our Medigap Multi-Quote Tool. With this tool, you can instantly compare rates from top insurance providers in your area.
Ready to shop around? Read this first to learn how you can save the most on Medicare Supplement insurance.
WHAT ARE SELECT PLANS?
Medicare SELECT Plans are almost identical to regular Medicare Supplement plans. The only difference is you’re required to choose a healthcare provider within the insurance provider’s network.
That’s because the insurance companies have negotiated and agreed upon rates within that network. This means the rates are usually much cheaper than regular Medicare Supplement plans.
So, what are the positives of purchasing a SELECT Plan? They offer more affordable coverage.
And, what are the negatives of purchasing a SELECT Plan? Your choice of healthcare providers is limited.
Insurance providers are not required to offer Medicare SELECT plans. And, if they do decide to offer Medicare SELECT, they don’t have to offer one for every plan type.
Fortunately, Ensurem partners with a large network of insurance providers to deliver you as many options as possible.
In order to compare Medicare SELECT plans in your area, just fill out our Medigap Multi-Quote Tool and choose ‘Yes’ under the ‘Show me SELECT plans?’ option.
Choosing the right Medicare Supplement policy doesn’t have to be hard. Remember to compare plans according to more than just the cost. Consider your coverage needs and the rating types as well.
If you have any questions about which Medicare Supplement plan or rating type is best for you, we recommend you speak with an insurance broker, like Ensurem, who employs licensed senior insurance specialists.
These specialists are licensed insurance agents. They know everything there is to know about senior products like Medicare and Medicare Supplement insurance.
The benefit here is that these licensed agents aren’t affiliated with an insurance company. That means they’re less likely to push one plan over another and more likely to give you an unbiased recommendation.
Speak with a licensed insurance specialist today. Just give us a call at 866.621.9295.