Why Does My Medicare Supplement Plan Continue to Go Up?
This is one of the top questions we get from our Medicare clients. Most people, when they retire, are on a fix budget. Just like most things we purchase in life, Medicare supplements (Medicap) do and can go up. What causes the increases and what can you do about it?
Medical Inflation
Just like most things in life, Medicare supplement plans general do go up. One reason is medical inflation. We have one of the best healthcare systems in the world. World class technology and treatments do not come cheap. Per Forbes magazine, medical inflation this year is 6.5%, double the general inflation rate. Another cause of the increase is when the Part A or Part B deductibles for Medicare change, carriers must adjust that change in the pricing of their plans.
How Its Rated
When you make the decision to purchase a Medicare supplement policy will determine the current and future pricing of your Medicap plan. Let’s look at the examples:
Community Rated
With this plan, the community will all be charged the same rate if enrolled in the same plan. If you enroll in a plan at 65 or 70 you would be charged the same rate. Premiums can go up, but age will not be a factor in an increased Medigap premium.
Issue Age
Issue age policies are based on the age you took out the policy and does not go up based on your age. Premiums may go up due to inflation, but it will never go up because of your age.
Attained Age
An attained age policy is based on the age you took out the policy and does go up as you age. While we think that understanding the difference between Medigap pricing options is good to know, the point is somewhat moot because most plans currently on the market increase as you age. Most insurance companies only sell Age-Attained plans.
How can I lower the cost of my Medicare supplement?
Apply for coverage with another insurance carrier
It is always a good habit to check the pricing of other carriers in your area. Carriers do lower rates in a state to be competitive. The important question to ask yourself is, am I healthy? Carriers will require you to fill out a medical questionnaire to see if you are in good health. If you are not, they will decline to write you a policy.
Another thing to keep in mind when purchasing a Medicap plan is to know how long a carrier has been in the state. Sometimes a carrier will enter a market and “lowball” a rate to buy-up local business. So be careful of who you select as a carrier. Remember when choosing a Medigap plan it’s always a good idea to go with someone who has been in your state for a long time and has a record of providing good service and long stable rates.
Household discount
The Medicare Supplement Household Discount is a percentage off your Medicare Supplement premium, and it’s generally for two spouses who hold a Medicare Supplement with the same company at the same time. There are companies that will offer a household discount even if your spouse or partner doesn’t have a policy – they just have to live with you. The thought behind this is that people who live alone are more likely to have more insurance claims. The discount can vary so it’s good to check with different carriers to see what that discount is.
The proper Medicap plan is very important. There are several options to choose from in SC. Research or speak with someone who works with reputable carriers to determine what best meets your needs.
