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.

Yesterday afternoon, I received and email/newsletter from a very large insurance company that linked to a press release titled “Industry Seeks Savings from Medicare Beneficiaries”.

Here are some excerpts from the press release and my reaction to them:

Seeking to fend off larger cuts in federal medical spending, executives from big pharmaceutical, hospital and insurance companies are crafting their own plan to reduce the deficit which calls for wringing Medicare savings from beneficiaries, not just from hospitals and drug makers. 

Members of the Healthcare Leadership Council—which includes top executives from Pfizer Inc., Aetna Inc. and the Mayo Clinic—are expected to approve a proposal that would call for raising Medicare’s eligibility age and shifting the program toward private plans for beneficiaries. My reaction:  I can’t print it here – The idea of raising the eligibility age really gets my blood boiling.

The group plans to press members of the congressional “supercommittee,” charged with finding $1.2 trillion in budget savings, to include the changes in its broader cost-cutting plan. My reaction:  So lobbyists will play a big role in influencing the closed-door meetings of the Supercommittee??   Who will be representing seniors, whose average income is around $30,000 per year??

The council’s proposal is part of a larger effort inside the health industry to overhaul how lawmakers achieve savings from federal health programs. For years, Congress largely has relied on slicing payments to doctors and hospitals that treat Medicare beneficiaries to shrink spending in the program that insures 48 million elderly and disabled Americans.  My reaction: American doctors make hundreds of thousands of dollars per year – poor them. For-profit hospitals make profits, even with the cuts they have faced over the years. Pharmaceutical company profits are huge.

Frustrated at being the target, the health industry is pushing back, arguing that some of those savings should come directly from the pockets of Medicare beneficiaries.  My reaction: Let’s compare the percentage of an average senior’s income spent on the health care costs to the profits of the companies represented by this Healthcare Leadership Council.

……The health-industry council estimates its plan would save $410 billion over a decade. The central plank is reworking Medicare so that, starting in 2018, beneficiaries could either shop for a federally subsidized private insurance plan in a new Medicare-only exchange, or stay in traditional Medicare. My reaction:There’s that Ryan Plan again… that would “end Medicare as we know it”…all so for-profit companies can make more money.

My Final Reaction: As I re-read this press release, it really seems like a joke or a prank. How can The Healthcare Leadership Council think their proposal would not be seen as garish and greedy?  And doesn’t it seem strange that they openly admit their highly-paid lobbyists will be all over the Supercommittee to stick it to seniors? Wow. This press release would be comical – if it weren’t serious.