Medicare Supplement Insurance: Choosing Your Plan
by Weiss Ratings | November 15, 2011
We all want to age gracefully, and we want health care benefits that will keep us agile for as long as possible. And while Medicare provides basic health benefits as a safety net for seniors age 65 and older, it won’t cover much beyond the basics.
If you want to secure your future health, you’ll want to look at the benefits you can get from a Medicare supplement insurance plan. They’re often referred to as Medigap plans because they’re designed to fill the “gaps” in Medicare coverage.
If you are enrolled in Medicare Parts A and B, you are eligible for a Medigap plan, which will cover many of the costs of medical care beyond those covered by Medicare itself. There are 10 standard plan types ranging from Plan A, the basic benefit plan, through Plan N. Additional benefits can be added through Plan F, while Plans G through N vary in benefits, co-pays, and deductibles.
The benefits within each plan are set by the government, but the prices of these plans can vary by state and the company offering them. If you’re going to renew or purchase a Medigap plan, it’s worth the time to comparison shop. There are wide variations in premium prices for the exact same plan benefits, so you stand to save hundreds, if not thousands, of dollars by comparing benefits and prices.
In fact, a recent study by Weiss Ratings found that premium rates within each plan type can vary as much as 1,316 percent. That’s for the same set of benefits!
The Weiss Ratings study analyzed more than 5.6 million premium rates for more than 165 insurers offering Medigap insurance in 2011, and the cost gap is staggering. For example, if you’re a 65-year-old male, rates for Plan A range from a minimum of $439 to a maximum of $5,776. That’s a huge difference and one that you can remedy by shopping around.
And while you may think such large price differences defy logic, it’s business-as-usual for the private insurers that sell these plans. Like all businesses, they have a profit motive and the regulations designed to prevent them from gouging you are sometimes circumvented or not enforced. It’s up to you to sort through the benefit and price choices to find the right plan before signing on the dotted line
Now, choices are a good thing. But you know that getting the information to make these choices isn’t so easy – it can be downright confusing. This year, when you review your Medicare supplement health-coverage choices, here are some things to consider.
Are the services you need covered?
It’s hard to predict what the year may bring in terms of your health or the health of a loved one. But it’s important to take a hard look and try to anticipate things like hospital, rehabilitation and potential hospice needs. That information will help in your review of the services and benefits available for each plan type.
Do you have other coverage?
If you have other health insurance, maybe from a current or past job, or through someone in the family, it’ll be important to understand how that coverage will work with a Medigap plan. Perhaps a Medicare supplement with fewer benefits will be all you’ll need if you have other coverage in addition to Medicare.
Premiums and Deductibles
Naturally, premiums and out-of-pocket costs will be important to consider. Do the homework. At WeissRatings.com you can get the high and low range of prices for each plan type, for free. You can also get a personalized report listing specific insurance companies that offer plans in your area and the premiums they charge. (This information is not available at Medicare.gov.)
Plus, insurance agents generally only quote premiums for the insurance companies they represent. So, this kind of information is not easy to come by. And the $99 fee you’ll pay for your personalized Weiss report will be well worth it, even if it’s just for the peace of mind that you’ve made a reasonable choice. But, it’s more than likely you’ll find savings of a few hundred dollars or more! Best of all, there’s a money-back guarantee, so purchasing the report is risk-free.
When it comes to picking the right Medigap plan for you, remember you get what you pay for. The lowest-cost health plan option may not be the best choice for you. Arm yourself with as much information as you can before making the big choice. Depending on your health, you may not be able to change plans in later years, so these choices are very important.
Doctors and Hospitals
Like most people, you probably have a relationship with your current doctors. You’ll want to check with those providers to see if they will accept the new coverage. If you have a Select plan, you’ll also want to make sure your doctors are in the insurer’s network and if you will need a referral to see a specialist.
Quality Ratings
While Medicare provides star ratings on a scale of 1 to 5 based on a range of measures that assess quality for original Medicare and Medicare Advantage plans, the ratings do not apply to Medicare supplements (Medigap). But, there is no doubt that the care you receive from doctors and hospitals can affect your long-term health. So, you will want to make your own assessment of providers and hospitals within any plan you consider.
Financial Strength Ratings
The financial strength of an insurance company can affect claim payments. You will want to check WeissRatings.com to make sure the insurer backing the plan you select is rated B+ or better. If you’re paying for insurance, you want it to be there when you need it.
Convenience
As you age, you’re likely to be less able or willing to travel distances to get the care you need. Check to see if the plan providers are located near your home. What are their hours? And if you travel a lot or spend part of the year in a different state, make sure you know whether the coverage will be available wherever you plan to be.
Your health is precious and only you know what will work for you and your family. That’s why it’s important to have all the information before you make decisions on health care plans to see you through your senior years.