Medicare supplement insurance is “conditionally renewable.” That means that as long as you pay your premium, the insurance company cannot cancel your policy. Unfortunately, it also means that your insurance company is allowed to increase your premium provided they make the same increase for everyone.
For younger retirees, the cost of Medigap is often very affordable. As they reach their 80s, what was easily afforded can become quite expensive.
BE CONTENT WITH ORIGINAL MEDICARE
There is no law that says that you must have Medicare supplement insurance. As of today, Original Medicare will be sufficient to meet the “Essential Benefit” mandate in Obamacare.
Before you cancel you Medicare supplement insurance completely, remember why you bought it in the first place.
Medicare B has no cap on the co-insurance amount. If your medical bills for the year are $100,000 you have to pay $20,000. Medicare supplement insurance will pay that for you. If you cancel your Medicare supplement insurance, you will have to use your retirement savings, Social Security or pension income to pay your medical bills.
The most popular Medicare supplement is also the most expensive plan. Plan F pays for all Medicare approved expenses that Medicare does not. That includes deductibles, co-pays and doctor’s “Excess Fees.”
There are 10 different Medicare supplement plans from which you may choose. Plan F is just one of them. If your insurance company will allow you to change to a plan that pays fewer benefits, you can lower your monthly premium without exposing yourself to all the bills that Medicare does not pay.
If you are still in average health for your age, you may consider changing insurance companies to get a better rate. If you do, there are a few things to remember.
- NEVER cancel your current policy until the new one has been approved and issued.
- Unless you qualify for “Guaranteed Approval” you will be subject to medical underwriting.
- When you switch companies, make certain that the one you switch to is satisfactory for the long-term. If you develop a serious health issue later, you may not be able to switch again in the future.
During Medicare’s Annual Enrollment Period (Oct. 15 – Dec. 7, 2012) you are allowed to change to a Medicare Advantage plan. Advantage plans differ from Medicare in the way they pay benefits.
Unlike Medicare B, Advantage plans have a cap on the amount you would have to pay for health care during the year.
Be careful, however, if you elect to change to an Advantage plan. Most Advantage plans have “network” limitations. If your doctors and preferred hospital are in the plan’s “network,” Advantage plans can be a wonderful option.
However, if you prefer to keep your options open, Advantage plans are not the best option for you. Many people are surprised to find that the doctor or hospital they went to for non-emergency health care is not in their insurance company’s network. When that happens, they are required to pay the doctors and hospitals directly.
Medicare Advantage is a wonderful program but only for those people who take the time to understand what they can and cannot do. If you are not committed to understanding your policy’s limitations, Medicare Advantage can be a nightmare.
As doctors and hospitals continue to raise their fees, Medicare must follow suit and Medicare supplement insurance premiums will continue to increase.
For many seniors who are living from pay-check to pay-check, I know that the cost of Medicare supplement insurance is a significant expense. Something has to give!
If the cost of Medicare Supplement has gotten too high for you, remember that there are ways to protect you from the unlimited financial exposure that you have under Medicare B.