10 Medicare Shopping Mistakes

Before 1992 it was next to impossible for most people on Medicare to compare or know if the plan they had was suiting their needs or if and when to make a change to another plan. In other words it was like comparing “apples to oranges” when one was looking to see if changing plans would be a wise decision.

In 1992 Congress did act on this problem and for once I can say they did a great thing in helping out their constituents. What they did was have ALL Medicare Supplement/Gap plans be identical in benefits and how the plans would pay the amounts not paid by Medicare. They labeled these plans A – J. In other words if one had a Plan C for example, all companies Plan C’s would pay exactly the same regardless of which company one had. The payment amounts were all regulated the same by the government and the insurance companies could not add to their plans any additional “bells & whistles” or take out any of the benefits mandated by law.

Again in 2003 the government added two additional plans K & L which have been available since.

What this legislation did was allow folks to be in a better position to compare which plan suits their specific needs and which company offers that plan at a fair premium. It also removed the need some perceived at pre-1992 times, to have more than one supplement at a time. In fact it is against the law to have more than one supplement or gap plan at the same time.

All companies must and do pay the claims and do so promptly. It has been a very long time since I have heard anyone say the Medicare supplement plan they had was not paying their claims.

Some of the supplement plans will pay for the Part B deductible and some don’t. Until the last couple of years that deductible remained at $100. However, the deductible has increased and will continue to increase each year based on the inflation rate of the country. Others rarely see a doctor and that deductible might not be incurred each year yet the higher premiums paid on those plans that cover the deductible would be paid each year and the deductible not used by the insured.

Also, sometimes one might think that their Medicare supplement policy will pay for expenses not covered by Medicare. This is simply not true. If Medicare does not approve an expense or procedure, then the supplement plan does not pay either. In other words if Medicare does not approve they will not pay and neither will the supplement plan.

This may or may not be in your best interest. Not all companies are all things for everyone. An insurance company may have an excellent major medical plan but not be as committed to the Medicare supplement area of policies. This is particularly important when one turns 65. Turning 65 is one of the rare if not the only time in one’s life that they can get any supplement/gap plan from any company that sells Medicare supplements in your state, without being at risk of denial due to current and/or past health conditions. In other words, you cannot be denied a plan because of your pre-existing conditions if you have any. This is called your “Open Enrollment” and only lasts for a few months.

All plans are now and have been standardized since 1992 so all plans with the same letter ( A – L ) will be the same no matter which company is offering them.

Each company however does have their own underwriting guides. This means that each company will look at different health conditions differently. I have companies that will accept a health condition that another one of my companies will not accept once one is past their Open Enrollment period. Being a client of mine you can feel confident that as circumstances change I am monitoring those changes in your behalf. As has been said, “Life comes at you fast and things can and do change in an instant”. This is what I do for a living I have made it my practice to follow the changes and stay up to date within the insurance industry.

With the commonality of cell phone, e-mail and toll-free phone numbers being able to “get in touch” with your agent is now very easy. I have implemented all of these new technologies and it is very rare if I am not able to return phone calls with in 24 hours of a message being left if I am not readily available.

I have seen time & time again a new company come into the state and offer their plans at ridiculously low premiums when compared to the companies who have been in the state for a time. I have concluded that some companies will try to get as many new policies issued as quickly as possible by offering very low premiums. Then as the next few years come the claims will start to catch up and the next thing you know that company who had the cheapest premium is now the most expensive. Remember, “The sweetness of a good deal is forgotten with the bitterness of poor performance”. When premiums become unaffordable and perhaps due to health conditions worsening with time & age you are not able to change companies what once may have been the best deal is no longer a good one.

In the “Guide to Health Insurance for People with Medicare” which is reprinted by each insurance company and is word for word from Medicare, it outlines the three methods the Medicare supplement policies are priced. They are attained age, issue age and community rates. Each has their distinct advantages and disadvantages. Due to the complexity of these three methods I would simply ask that this discussion be done in person.

The government has not nor will they, in my opinion, ever cover and pay for much more than just a few weeks in a nursing home. As the “Baby Boomers” age in to the Medicare age group the fiscal pressures to pay more than the first few weeks of skilled care will become even more burdensome. Fortunately, other policies are available and very reasonably priced that cover rehabilitative care. These policies provide for the kind of care which is now needed and is not covered by Medicare.

Medicare Advantage Plans are back again but with a new name and more money than was in the Federal Budget in times past. As budget restraints on the Federal level change so will the funding for these plans. If the funding going to these plans decrease as some in Washington have made it known they would like to do, then the benefits and advantages which are touted by the Plans will change. Let me simply say that in over 25 years I have yet to see an insurance company want to simply “break even”. So what may seem a sweet deal now may not be so later.

The various and complex nature of how these plans work with their co-pays and co-insurance work this arrangement may work for some and being able to go into any more detail in this report would be too long. Currently I have about one half of my clients with this choice and the other half have opted for supplements.

If you are just about to turn 65 or are past that age I would like to thank you for your interest and appreciate you patience in reading this long report. I hope it has provided you with some answers to questions and perhaps even stirred up more questions. In any event I would look forward to the time when I could met you personally and provide you with the foundation needed to help you make an informed choice in your health care coverage in your future.