Tucson Citizen.com
Medicare and More -

Medicare Supplements: Price, Price, Price?

by on Oct. 20, 2011, under Health

There’s a full-page ad in today’s Arizona Daily Star for a Medicare supplement company. The message is to pick a Medicare supplement based on the company with the lowest price.

What to ask about the pricing for Medigap plans:

Ask the question, “How much will this lowest-priced supplement go up in a year?” Then ask, “and what about three months after that, or at the two-year mark? How much will my premium go up within two years?”

Every insurance agent, or the helpful person at a company’s call center, should be able to give you an answer.

The problem with choosing a Medicare supplement based on the lowest price is that that price will certainly go up over time. And if the price goes up 30 to 40% in one year (or just over a year), you may not be able to go shopping for another Medicare supplement.

With Medicare supplements, when a person turns 65, or first gets Part B of Medicare, he has six months to buy a Medicare supplement without answering any medical questions. But after that, when the premium has skyrocketed, that person will have to answer medical questions if he applies with another company. And if that person has health problems (diabetes, cancer history, heart disease….) he can be turned down for coverage.  He will then be stuck with that Medicare supplement policy with a premium that will go up 20 to 40% each year.

So be sure to ask what the average price increase is after one year, or two years.  If the person you’re talking to won’t give an answer, you should walk away or hang up the phone.

To learn more about Medicare supplements, Medicare Advantage, Part D, and much more, you might want to take a course on  Medicare. Click on the image below.

This entry was posted on Thursday, October 20th, 2011 at 8:35 am and is filed under Health. Tags for this post: , , , , , , , . You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

RSS feed for this post (comments)
  • Jill

    Your article is only 50% accurate.  Prices are set based upon risk pools and profitability.  Therefore, past price increases do not predict future price increases (especially considering the recent economic climate) and insurance companies, agents, and call center employees have no idea what future prices will be as there is no possible way of knowing what the current risk pool looks like. 

    Furthermore, your claim that an insurance company can raise there prices 20 to 40 percent every year is factually inaccurate as no state department of insurance would approve the price increases year after year.  

    Believe it or not, there is a method to the madness.  Please make sure you inform consumers with all details so they can make good decisions.   

     

  • medicareblogger

    I should have proposed the question, “What is your company track record for premium increases?” And the honest answer from some companies would be 20% to 40%.  Other companies can say their rate increases average 5-8% each year, while others will say their average increase is 10%.
    Some companies have a record of going into markets with very low premiums. Then they have a record of raising their premiums drastically a year later.

«
»