Today’s seniors have many choices when they need to determine the best way to use their Medicare benefits. Over the last few years, Medicare Advantage (MA) plans, some of which include Medicare Part D, have become increasingly popular alternatives to just relying upon traditional Medicare. At the same time, the market for Medicare supplemental plans, which are very different than MA, has continued to grow. People who want to buy Medicare supplement plans can still find plenty of top companies offering familiar choices.
We can help you compare Medicare plans to find the right solution for your own unique health needs and budget. Get started by entering your ZIP code in the form on top of this website. If you would prefer to discuss your needs with an experienced agent, we also welcome your phone calls.
Why Buy Medicare Supplements in?
Original Medicare covers many medical and hospital bills, but it doesn’t cover everything. For example, you currently have to pay a hospital deductible of $1,216 for each benefit period. For long hospital stays, over 60 days, you could be responsible for coinsurance payments of hundreds of dollars a day. Once lifetime limits are exhausted, you will be faced with paying the entire bill for inpatient hospital stays.
You are also responsible for 20% of the cost of doctors, therapists, and medical equipment.
Seniors purchase supplements to protect themselves and their families against these expenses. While some individuals choose very comprehensive plans that provide “first dollar” coverage, others select less expensive plan levels that only cover the most expensive potential medical bills.
Also, Medicare establishes rates for a variety of different medical services and products. Some providers may charge more than the allowed amount. Some supplements cover these excess charges, and this gives the policy holder more freedom to select their doctors and hospitals. If these higher prices are not covered by a supplement, individual beneficiaries either have to pick providers that don’t charge more than Medicare allows or pay the difference out of their own pocket.
Statistics for Medicare Supplement Insurance Plans
According to the Kaiser Family Foundation, these are some trends for Medicare supplement premiums over recent years:
- Average premium increase per year: 4.1%
- State with the most Medicare beneficiaries: California with about 3,802,500
- Average US monthly premiums: $181
- Average Florida premium: $181
- Average Texas premium: $190
- Average Arizona premium: $166
- Average New York premium: $226
- Average Pennsylvania premium: $163
- Average Ohio premium: $178
- Average Illinois premium: $193
- Average Alabama premium: $174
- Average North Carolina premium: $162
- Average Massachusetts premium: $201
- Average Missouri premium: $178
- Average Colorado premium: $181
Judging by the past trend of small yearly price increases, it might also be reasonable to expect a modest rate increase in 2015 and beyond. Also, supplement rates vary by location, plan level, and sometimes, health and age. Even within the same state and city, rates can vary by company for the same supplement plan level.
When choosing a new plan, people tend to select the cheapest of the highly rated insurers. However, those who already have coverage may not be quick to switch to another company just to save a few dollars if they are already satisfied with their benefits and service. Finding the right supplement in any local area may also consist of researching a company’s reputation for paying claims and handling customer service issues.
How Does Health Reform Change Medicare Plans?
Many beneficiaries have concerns over the way that health reform may change Medicare. Health reform does impact Medicare, but many of these changes will not be that obvious to beneficiaries.
First, Medicare health insurance plans are not on the new state or federal health insurance marketplaces. In fact, it is illegal for an agent to try to knowingly enroll a Medicare beneficiary in a marketplace plan. This means that beneficiaries will continue to enroll in their insurance policies through an agent or an insurance company in the way they have before. Private marketplace plans are mostly for people who do not have other affordable health insurance, so they are not open to people who already have Medicare.
However, health reform will impact Medicare in the future. These are some of the visible changes to Medicare caused by health reform:
- Preventative services: More preventative services, like colonoscopies and mammograms, will be covered at no extra cost.
- Prescriptions: The infamous “donut hole” will begin to close with more help with brand name drugs, and it should get totally closed by 2010.
- Medicare trust fund: The trust fund has been renewed until 2029 because of a reduced fraud and waste.
Top Companies for Medicare Supplement Plans
Supplements, sometimes called Medigap plans because they cover the gaps that original Part A and B don’t, continue to appeal to many consumers. According to CSG Actuarial, these companies have reported growth in the number of plans they sold in recent years:
- Aetna Medigap Plans
- United Healthcare medigap plans
- Humana Medicare plans
The network that evolved out of the oldest health insurance company in the country also offers popular Blue Cross Blue Shield Medicare supplements. Cigna, Bankers Life, Mutual of Omaha, and Gerber Life are also common providers in some parts of the country.
Which Medigap company should you choose? Again, your first task will be to find the right plan level. After that, you might just shop by price between top insurers in your city. Since the levels have been standardized by CMS, they provide the same benefits.
Popular Medicare Plans
Supplements have been standardized with different letter names from A to N for each level of coverage. The right choice really depend upon each beneficiary’s budget and health needs, but it might be interesting to learn which supplements have been most popular.
Nationwide, these are the two most popular plans according to a Kaiser Family Foundation report:
- Plan F: Chosen by 40% of supplement owners
- Plan C: Chosen by 13% of supplement owners
The difference between these two plans is that F also pays excess charges when medical providers charge more than Medicare says they should. But they both provide what is covered first dollar coverage, meaning they cover the Part A and B deductibles. For example, for most medical services, Medicare pays 80% and the recipient pays 20%.
This explains the differences between some other common Medigap policies:
- Plan D is similar to C, but it does not pay the Part B deductible.
- Plan G is more like F, but it does not cover the Part B deductible.
- Plan A and B provide basic coverage, and premiums may be cheapest.
Note that there is also a high deductible version of plan level F. The deductible is subject to change each year, but it was $2,140 in 2014. This choice might provide a solution for individuals who want robust coverage but don’t mind paying some expenses in exchange for lower premiums.
How Medicare Works with Supplements
Supplements are meant to cover some of the expenses that are not paid by Part A and Part B. By paying for this extra coverage, beneficiaries can control and predict their expenses during the year. People who buy supplements have to pay a premium just like they do with other types of health insurance.
This is very different from how Medicare Advantage plans work:
- With a supplement, original Medicare and the supplement work together to provide more robust coverage.
- With MA, the new plan replaces original Medicare with a plan that CMS has approved because it provides coverage that is equal to or better than Part A and Part B.
Also, supplements do not really include prescription D drug plans though you may be able to buy both Part D and a supplement from the same company. Many popular MA plans do include Medicare Part D. MA plans have also grown increasingly popular because applicants do not have to answer health questions.
Probably the main reason that many seniors choose Medicare Advantage is because many MA plans do not charge an additional premium, so they provide an affordable way to extend benefits. When MA plans do charge an additional premium, it is usually fairly modest. In most areas you can find many $0 additional premium HMOs. PPOs are more likely to come with a small monthly charge.
With an HMO, MA plan members virtually always need to seek covered services from a medical provider who is a member of the plan network. With a PPO, members pay less if they use their plan’s network of medical providers. However, the plan will still cover out-of-network providers at a lower benefit level.
Do You have to Answer Health Questions on the Application?
Beneficiaries can take advantage of special enrollment periods when they get guaranteed rights to sign up for any plan sold in their local area. The most common example of this guaranteed right is when a beneficiary first becomes eligible for Part A and Part B. Other circumstances may be trial periods with other types of senior health plans and rare occasions when an existing plan terminates or does not follow the rules.
At other times, beneficiaries may be subjected to medical underwriting, and people with preexisting health conditions could get charged more or even declined. In contrast, general Medicare Advantage policies cannot ask any medical questions to qualify members for coverage. That said, you can find special needs MA plans that have been developed to provide the best benefits for people with specific medical problems.
Find the Right Medicare Plans for You
Today’s seniors have a lot of choices when it comes to finding health insurance to help them make good use of their valuable Medicare benefits. However, having all of these choices can make it difficult to make a good choice without help. We are here to provide that help by offering online quotes and personalized assistance from trained and experienced senior health insurance agents.
You can begin to compare Medicare health plans in your local area by typing your home ZIP code into the form at the top of this web page. We also welcome your phone calls if you have more questions or need help enrolling in either a supplement, Medicare Advantage plan, or Part D plan. Let us know how we can help you find the right benefits at a price you can afford.