Welcome to Part II of our two-part series regarding the most frequently asked questions our agency encounters about Medicare Supplement insurance policies. In this installment, we discuss the nuances of these plans including: rates, underwriting, making changes and the agent’s role.

Click Here To Read Part I Med Supp FAQs  →

Learning About Medicare Supplement Rates & Increases

Can My Rates Go Up Each Year? Why Do They Increase?

Yes, rates with most plans and most carriers increase each year. It does not matter which type of plan you choose (Attained Age, Issue Age or Community Rated) as rates usually increase on your yearly anniversary.

There are several reasons for increases including: changes to Medicare, overall claims experience, policyholder birthday, etc. It’s important to understand that each year CMS shifts more costs to Medicare supplement policies and that affects rates for all plans – both new and old.

With most supplements, your rates are locked in for 12 months. After your 12 month rate lock is over, then rates can increase at irregular times. Insurance companies are not obligated to stay on a 12 month cycle, but many do.

Can I Be Singled Out For A Rate Increase?

Insurance companies cannot single you out for a rate increase. Rates will increase equally for everyone in your block of business which could include several thousand people.

When rates increase, they are adjusted for all policyholders in your block. For instance, United Healthcare might announce a 4% increase on all plans next year for the state of Ohio and that would be that. Another carrier, Stonebridge Life, might announce an increase in that state of New Jersey of 6% on all plans except Plans G & N – which will increase by 4%. Insurance companies are not obligated to raise rates on all plans equally.

Are Some Carrier’s Rate Increases More Friendly Than Others?

Without a doubt, some carriers have a much better track record with rate increase history than others. In our experience, this is one of the most important aspects of Medicare supplement insurance – renewal rates.

You don’t want to shop on first year rates alone. You want to ask about renewal history with the carriers you are interested in. All plans experience rate increases – even Issue Age Medicare supplements. As it can be difficult to switch carriers in the future, buying a plan with stable rates is of utmost importance.

Is It Possible To Know What My Rates Are Going To Be In The Future?

No. If you’re age 65, you can ask about rates for an 80 year old, but that number would be for an 80 year old applying today. As agents, we only know new business rates and in some cases renewal history. We have no way of knowing what your rates will be in the future – no on does.

Can I Get Rated-Up Based On My Health? 

There are a lot of factors that can affect your rates including: your state and zip code of residence, gender, age, tobacco use, height/weight, marital status, etc. These are all items you want to disclose to your broker when discussing rates.

If you’re in your open enrollment window, then some of these factors won’t matter. Very few carriers underwrite to your overall health. You are either accepted or declined if applying outside of open enrollment or guaranteed issue periods.

Are Issue Age Plans Better Than Attained Age?  What About Community Rated Plans?

In our experience, you are simply shopping for a Medicare supplement carrier with a history of reasonable rate increases. It’s important to know that there really is no silver bullet here  – all carriers raise rates to some extent.

Even though an Issue Age plan might not raise your rates because you are older, that does you no good if there normal rate increases are 5% above the next best Attained Age plan. In many cases, Issue Age plans increase rates just as quickly (if not more so) than Attained Age supplements.

On the other hand, Community Rated plans charge the same rate for everyone (male or female) who is the same age and living in the same state. That can be beneficial to males living in the most expensive zip codes, but detrimental to a female living in a less expensive zip code. In other words, Community Rates plans may only benefit a select few.

Thus, you may not want to put too much emphasis on how a plan is rated. It’s better to focus on an insurance company’s historical performance of rate increases.

What About Preexisting Conditions? Are They Covered?

If you are in an Open Enrollment or Guaranteed Issue window, then Medicare supplement carriers cannot ask about the status of your current health. They must accept you (not necessarily for all plans) and cover any conditions you have right away.

If you are outside of one of these windows, then you must go through medical underwriting by answering several yes/no health related questions. A phone interview may be required as well.

Typically one of two things will happen if medical underwriting is required: You will either be accepted or turned down for coverage. If you are accepted, then most carriers will cover any preexisting conditions assuming you have been truthful during the application process.

There is at least one insurance company that can adjust their rates based on medical underwriting. This is not the norm, but it means a healthier person will pay less than someone who has one of the conditions listed on the application. Again, this is a moot point during Open Enrollment & Guaranteed Issue windows of time.

Changing Medicare Supplement Insurance Carriers

Can I Be Turned Down If I Want To Switch Plans Or Carriers?

Yes. In most cases, medical underwriting will be required if you want to switch from one insurance company to another – or if you want to upgrade or downgrade your supplement (like moving from a Plan N to a Plan F, for instance.)

A few states have a few exceptions to these rules, but most don’t. There is no annual Open Enrollment for Medicare supplement insurance, so you want to choose a strong plan with a reputable carrier the first time. The Annual Election Period (AEP) that runs from October 15th through December 7th each year does not allow you to switch Medicare supplements no questions asked. Medical underwriting is still required at this time in almost all cases.

Are Discounts Offered If I’m Married Or I Pay A Certain Way?

Yes, several carriers offer marital discounts. These can range from 5% -12% for the policyholder. Some insurance companies require that both spouses apply while others do not. And in other cases, a discount will be made available so long as someone age 50 or older is living in the same household.

Usually the least expensive way to pay your premiums is monthly or annually. If you pay monthly, most carriers will require an automatic bank draft or credit card debit. Very few carriers will send a paper bill each month.

Other companies will bill you quarterly or semi-annually, but a a check for the first installment will be required with the application. In our experience, a monthly bank draft is the least expensive and most reliable way to pay for and keep your insurance in force.

Supplemental Insurance – An Agent’s Perspective

Do I Need A Medicare Supplement?

I can’t answer that. It’s insurance like any other – your home, your car, etc. Some insureds may access their policy infrequently, but that’s okay. We have a saying in this industry: The best kind of insurance is the kind you don’t use.

However most people buy a supplement for the proverbial rainy day. Anecdotally, I worked with a person recently who did not own a supplement. She had to pay a $3,000 bill after an emergency room visit and overnight hospital stay for what turned out to be a caffeine attack. The out of pocket costs she paid (after Medicare covered its portion) were a rude awakening. (She’s a client now.)

What Are The Most Popular Medicare Supplement Plans?

The policies purchased most often from our agency are Plans F, G, N and High Deductible F. We see some interest in the others, but these four are the most popular by far.

Plans F & C are very much alike, but more carriers offer F, it can be less expensive than C, and it covers Part B Excess Charges – so it might be a better choice. Plans G and D are also a lot alike, but Plan G is offered by more companies, has only one gap (the $183 Part B deductible), and can be less expensive than D.

Plan N is just a step below Plan G. It is the only plan that requires a copay at the doctor’s office ($20 maximum) and emergency room ($50), but it is very reasonably priced. Part B Excess Charges are very rare and disallowed in some states (Ohio for instance) and that can make Plan N a good choice.

High Deductible F is the least expensive Medicare supplement of them all. In many areas it can be around $30 a month for a 65 year old. It does have a $2,240 deductible (for 2018), but many of our healthier clients like the premium savings it offers. Additionally, it does not have network limitations like $0 Medicare Advantage plans sometimes do.

Which Medicare Supplement Insurance Plans Offer the Most Value?

In our opinion, the Medicare supplements that offer the most value are Plan G on the higher end and High Deductible Plan F on the lower end. Plan N is probably in that discussion as well.

In many cases, the difference in premium between Plan F and Plan G more than makes up for the one-time $183 Part B deductible that G does not cover. And Plan G is not a guaranteed issue plan. That can translate to smaller rate increases with Plan G – and stable rates are the holy grail of Medicare supplement insurance

As mentioned in the previous question, High Deductible F is very inexpensive. In fact, it has the lowest rates available in many areas of the country. And your premium savings can help to cover the deductible if it’s ever encountered. If there is one knock against HD Plan F, it’s that you may have trouble upgrading your coverage in the future if you have health issues.

Do I Pay An Agent To Help Me Enroll? Does It Add To The Cost?

No, you never pay an agent and it never adds to the cost. If you are a 65 year old female in Pennsylvania and you want a Plan G from Mutual of Omaha, then the cost will be the exact same no matter your source of purchase – even if you call Mutual of Omaha directly.

Prices are controlled by law and agents cannot mark-up or mark-down the rates – no matter how much we like you. We earn a commission on the sale if you buy from us – or someone at the insurance company gets compensated for the sale. Either way, someone wins.

In our opinion, you are much better off with a knowledgeable independent brokerage (like ours, of course) who can shop rates from several carriers. It’s much easier to learn the good, bad and the ugly from someone who has long term experience with several different insurance companies – and it does not cost you one penny extra!

Do I Really Need An Insurance Agent’s Help?

Here’s the primary issue: You don’t know what you don’t know. Working with Medicare beneficiaries daily, it’s amazing the amount of misinformation and misunderstanding that we encounter. We talk to people who have made decisions (sometimes bad ones) on something their doctor or their neighbor told them.

Trust us, it’s wise to consult a professional – someone who works in this industry daily and has years of experience. Almost every single prospective client we talk to says, “Oh, I didn’t know that” at least once during our educational conversations.

Again, it doesn’t cost you a thing and the vast majority of us are very helpful and easy to work with. Plus it’s always a good idea to have an agent at the ready when you have questions or need help with your policy(s) in the future.

If you’re shopping for coverage, you probably have several questions about Medicare supplement insurance plans.

We have been working with these policies for many years and answer the most common questions below. This way, you can make decisions that best fit your needs.

First: A Little About Medicare

What And When Is Open Enrollment For Medicare?

For most, open enrollment occurs when they turn age 65. For others, it’s when they first enroll in Medicare Part B. Not everyone enrolls in Part B at age 65. Some enroll early due to disability and other will defer if they have creditable group health insurance at work. The size of your employer group (20 employees or more) will determine whether you can wait to enroll in Part B.

When first enrolling in Medicare Part B, you’re in your personal Open Enrollment window. You have approximately 7 months to purchase a Medicare supplement plan. Some people enroll in Part B, but still keep their group insurance at work, but that’s not always the best move. Make sure you talk with a knowledgeable insurance broker when you’re making these decisions.

Most everyone has only one Open Enrollment window – either at age 65 – or when they enroll in Medicare Part B for the first time. This is the time to act. If you miss your open enrollment window, then medical underwriting may be required to purchase a Supplement.

No matter the supplemental insurance you choose, you will still need to pay your Medicare Part B premiums. Medicare supplement and Part B premiums are two separate expenses.

(Note: Open enrollment does not occur every year in the Fall. That window of time is called the Annual Election Period (AEP) and does not give you a free pass to purchase supplemental insurance without medical underwriting. More on this later.)

Understanding Guaranteed Issue Windows

I Received A Letter About My Guaranteed Medicare Rights. What Does It Mean?

You may receive a letter from your employer group coverage – or from an existing Medicare Advantage plan – that it’s terminating. Guaranteed issue windows are different than the Open Enrollment time period discussed above. They are shorter in duration and don’t always allow for the purchase of every Supplement available. (Plan N is not a guaranteed issue plan, for example.)

Only someone who is already eligible for Medicare and enrolled in both Medicare Parts A and B will receive (or can request) a letter of guaranteed Medicare rights. Your options will vary depending on your situation, but you can purchase most Medicare supplements. And you can usually enroll in any Part D drug plan during this window of time.

No matter your window, you need to be entitled to Part A (usually through work credits) and enrolled in Part B before you can purchase a Medicare supplement plan.

Understanding Supplemental Medicare Insurance Policies

What Are Medicare Supplements Insurance Plans?

Medicare supplements are private insurance plan that fill in some (or all) of the gaps in Original Medicare Parts A & B. Supplements and Original Medicare work in tandem. Medicare pays its share and then your supplement pays its portion. You present both your red, white and blue government issued Medicare card and your chosen Medicare supplement ID to your healthcare provider when receiving care.

There are ten standardized Medicare supplement plans A-N. There are some variations of certain plans as well. Some policies offer a High Deductible version while others come in a Select variety. View our chart here to better understand the benefits of each policy.

Who Offers Medicare Supplement Insurance?

There are several insurance companies offering Medicare supplement insurance policies – some you have heard of and others you have not. These are private insurance companies like Aetna, Anthem Blue Cross and Blue Shield, Humana, Mutual of Omaha, National General, United Healthcare and many, many others.

You do not purchase these plans from the government. You buy them direct through brokers and agents. You can also buy them from the insurance company. Your cost will be the same no matter your source of purchase. No agent or company can offer a sweetheart deal of any kind.

Why Haven’t I Heard Of Some Of These Insurance Companies?

The first thing to remember is that Medicare supplements work in tandem with Original Medicare Parts A & B. Insurance companies (both large and small) do not have to build any networks of doctors and hospitals. They simply have to pay their share after Medicare.

There are few barriers to entry into this market. It’s very competitive and full of several insurance companies. If your doctors accept Medicare, they will accept most any Medicare supplement you present to them.

This is not like traditional health insurance where certain doctors only accept certain plans. In other words, a United Healthcare Plan F gives you no more choice of healthcare providers than does a Plan F from Tumbleweed Life of New Mexico. (Please don’t go looking for Tumbleweed Life. That’s a joke, but you get the point.)

Are Their Network Limitations At All With Medicare Supplements?

With almost all plans, the answer is NO. The only two plans sold using networks are “Select Plans”. In our experience, Select Plans are not  popular. They are easy to recognize and only offered by a few large insurance companies.

Most of our clients purchase traditional policies – not the Select version. Again, the vast majority of supplements have no network restrictions. A Plan G is a Plan G is a Plan G. If you’re unsure, ask if it’s a Select Plan.

I Called My Doc’s Office – They Don’t Take The Insurance Company I Like. No What?

We run into this more frequently than we should. The folks running the billing departments at some medical offices don’t always understand Medicare. Or they assume you’re asking about Medicare Advantage plans. Most Advantage plans do have network limitations and some doctors will be out of network with these plans.

Don’t worry – Medicare supplements don’t work that way. Explain to them you’re talking about a traditional Medicare supplement – not a Select Plan and not a Medicare Advantage plan. Trust us, they take it. They will bill your insurance company like all others. Sometimes, they just don’t always understand the process or your question.

Do Medicare Supplements Cover Prescription Drug Coverage?

No they don’t. There are no Medicare supplement plans sold today that cover prescription drugs. Some Medicare Advantage plans include Part D drug coverage, but by rule supplements cannot provide this benefit. Part D prescription drug plans are sold separately from a wide range of private insurance carriers.

We’ll help you for find the right Part D drug plan. We have software that allows us to compare all of your best options based on what you take. Your Part D drug coverage can be just as important as your supplemental insurance.

What Are Medicare Advantage Plans? Do I Need One Of Those Too?

You can learn more about Medicare Advantage (MA) plans here. They are network driven insurance plans that privately cover the benefits of Medicare Parts A & B and also some of the gaps left behind. MAPD plans usually include Part D drug coverage and oftentimes require the use of in-network facilities and a primary care physician.

MA plans are offered from carriers like Aetna, Anthem Blue Cross and Blue Shield, Humana, United Healthcare and others. Original Medicare (Parts A & B) is a public insurance program. Advantage plans are private and while highly regulated, they operate differently than what’s offered from the government.

By rule, you should not own both a Medicare supplement and a Medicare Advantage plan. It’s one or the other. We can help you understand which type of insurance might work best for you.

Does Original Medicare Only Cover 80%? Will A Supplement Pay The Rest?

Our clients ask about the 80% number often. It’s a bit of a misnomer. Your remaining bill after Medicare can be more, less or equal to 80% depending on what you’ve encountered. Part A (hospital inpatient services) is much different than Part B (doctor’s office) costs.

If you study a Medicare benefit grid, you’ll notice there are different deductibles, copays, coinsurance and cost sharing that will add up to more or less than 80% of a medical bill. So don’t make any decisions based on the 80% number you hear about so often.

How Does Billing Work? Do I Have To File Claims? What If It’s Not A Medicare Approved Expense?

Roughly 95% of doctor’s offices and hospitals handle the billing for you. You give them your ID card and they will bill your insurance company. Medicare coordinates with most Supplements directly. Insurance companies are very good about paying claims quickly. Medicare is very regimented; there is no wiggle room. Insurance co’s know their exact finacial responsibility and pay it accordingly.

If you seek medical care for something that is not a Medicare approved expense (homeopathic medicine, for example) then your supplement will not cover it. Medicare supplements only cover their portion after Medicare… and only for approved expenses. That’s all, nothing else.

Am I Covered When I Travel Domestically? How About Abroad?

Almost all Medicare supplement policies cover you domestically. The only ones that may not (other than for emergencies) are called Select Plans and as mentioned above. If you summer in Ohio and winter in Florida, these policies will travel with you. You purchase your supplement based on your state of residence, but you don’t need to notify your insurance company when travelling.

Plans C, D, F, G, M and N are the six plans sold today that cover Foreign Travel Emergency. There is a $250 deductible and $50,000 lifetime limit on this coverage gap. If you travel abroad frequently or for extended periods of time, then there are other affordable health insurance policies better designed to cover you during such trips.

What Happens If I Move To A New State?

Typically your Medicare supplement will travel with you when you move to a new state. You only need to call your insurance carrier (or contact your broker) so that your carrier is aware of your new address. Your rates might be adjusted based on your change of residence, but that’s all.

(It’s important to note here that prescription Part D drug plans do not typically travel from state to state. When you move, you may need to inform your insurance company and sign up for a new plan even though it’s the same plan as you had in your former state of residence.)

 Do Some States Have Different Medicare Supplement Rules? What If I’m Under Age 65?

Yes, some states have different rules, but the plans themselves rarely differ. In other words, a Plan F is a Plan F in most places.  What can differ is how the plans are rated, access to plans and rules about changing plans.

Some states only offer Issue Age rated plans. This does not mean your rates will never go up, but they won’t go up because you’re a year older in these states.

And some states allow those under age 65 to purchase a Medicare supplement if they are eligible for Medicare due to disability. Tennessee and Illinois are two examples. This rule is very much state specific. A Medicare Advantage plan may be the only option for those who reside in states where supplements are not for sale under age 65 – like Ohio and Indiana for instance.

And a couple of states – like Missouri and California for example – offer periods where the insured can switch plans (no questions asked) during an anniversary or birthday window of time. Consumers in these states can save money by switching to “like or lesser coverage” each year during their individual anniversary window.

When shopping for coverage it is smart to inquire about, and familiarize yourself with, any rules that are unique to your state or residence.

Do Medicare (and/or Supplements) Cover Long Term Care Expenses?

Not really and not for very long. Medicare pays the full cost for the first 20 days – and part of the cost of the next 80 days – for skilled care only. Most Medicare supplements fill in the skilled nursing facility coinsurance gap for those same 80 days . After day 100, neither Medicare or any Medicare supplement will pay for your long term care costs – period.

And it’s important to note that Medicare, when combined with supplemental insurance, only pays for the first 100 days of skilled care.  That’s care administered by a doctor. Most people need intermediate or custodial care. That’s help with the activities of daily living.

The only policies that pay for skilled, intermediate and/or custodial care for significant periods of time are long term care insurance policies. In other words, you don’t want to rely on Medicare (or your supplement) to pay long term care expenses in the short or long run.

Can You Explain The So-Called “Open Enrollment” Window Each Fall? What Is It?

This is the yearly window of time that runs from October 15th through December 7th. People will refer to it as “Open Enrollment” but it’s actually called the Annual Election Period – or AEP for short.

During AEP, you can switch prescription Part D plans, change or move in and out of Medicare Advantage plans, but it has little bearing on Medicare supplement insurance. In other words, AEP gives you no free pass to purchase a Medicare supplement policy or change to a new one.

While a lot of consumers switch Medicare supplements during the AEP window, it’s not because there is no medical underwriting. It’s just a time of the year when people are actively thinking about their insurance plans and rates.

Click Here To Read Part II Med Supp FAQs  →