Medicare Supplements – Why Pay Wholesale When You Can Pay Retail?

Yes, you read the title correctly. When it comes to Medicare Supplement plans, which are also known as Medigap plans because they pay for the “gaps” in coverage that are not paid for by Medicare, some of my clients prefer to pay retail instead of wholesale! That’s right, “Why pay less when you can pay more?”

retail

Most people that I meet are very happy to save a lot of money on their insurance premiums, but there are always some that really don’t seem to care. Or maybe they are skeptical because it just “seems too good to be true,” which I can totally understand.

A Tale of Two Cities, I Mean Two Clients…

I was working with two different clients yesterday, Client “A” and Client “B.”

two clients

Client “A”

Client “A” has Plan F with Blue Shield of CA, and his monthly premium is $279 per month. I shopped around for him and found several other insurance carriers that are offering Plan F at much lower rates. The lowest rate that I found for him is $179.33 per month. That is a savings of $99.67 per month or $1,196.04 per year for the same identical plan and coverage!

Many people who have Plan F have been switching to Plan G because both plans are identical except there is no deductible with Plan F, and there is a small $166 (Part B) deductible with Plan G. That is the only difference between the two plans!

However, Plan G is usually much more cost effective (cheaper) because the rates are lower. So even if you pay the $166 deductible, in most cases, you still end up spending much less money with Plan G than Plan F.

In addition to getting the current Plan F rates for Client “A,” I also provided him with the current Plan G rates for comparison. If he switched from Plan F to Plan G, he would have saved even more money! The best Plan G rate is $156.70 per month. That would be a gross savings of $122.30 per month or $1,467.60 per year! If he spent the $166 deductible, his net savings would still be $1,301.60 per year! In this particular case, Client “A” would have saved even more money by switching from Plan F to Plan G.

Inexplicably, Client “A” decided to keep his current plan for another year!

Client “B”

Client “B” also has Plan F with Blue Shield of CA, and her rate is $219 per month. I shopped around for her and, like Client “A,” I found several other insurance carriers that are also offering Plan F at much lower rates. The lowest rate that I found for Client “B” is $170.99 per month. That is a savings of $48.01 per month or $576.12 per year for the same identical Medicare Supplement plan and coverage!

Client “B” also had the option to switch from Plan F to Plan G, and again, she would have saved even more money on her premiums by doing so. Her current Plan F rate is $219 per month, and the best Plan G rate for her is $147.19 per month. That would be a gross savings of $71.23 per month or $854.76 per year! If she spent the entire $166 deductible, her net savings per year would still be $688.76 per year!

Just like Client “A,” Client “B” also decided to keep her current plan for another year!

Some Common Misconceptions

It’s very baffling to me when I can literally save someone hundreds and even thousands of dollars a year on their premiums for the same exact plan and coverage, and for whatever reason they are not interested in doing so.

If my auto and homeowner’s insurance agent told me he could save me $100 a month on my premiums, I would be thrilled to be able to save that much money. I guess that some people just aren’t as happy about saving money as I am!

Save-Money

Misconception #1 – By Switching Medigap Plans, I Won’t Be Able to Go to the Same Doctors

Some people are reluctant to change Medigap plans because they are afraid that they won’t be able to continue seeing the same doctors. This is a misconception because you can go to ANY doctor or hospital in the US with your Medicare Supplement as long as the doctor or hospital accepts Medicare. If your doctor accepts your current Medicare Supplement plan, then they have to accept ANY Medigap plan or insurance carrier that you have, PERIOD.

Misconception #2 – The Rates Are Too Good to Be True

If the new rates are significantly lower than the current plan, some people think it’s either too good to be true or a huge rate increase is soon to follow. This is also a misconception because most of the carriers that I work with lock in their rates for the first 12 months, so there wouldn’t be any unexpected rate increases.

Misconception #3 – My Coverage Will Not Be the Same

Another common misconception is that the coverage will not be the same, even if someone is switching from Plan F to Plan F or Plan G to Plan G, etc. There are 10 “standardized” plans to choose from, Plan A through Plan N. This means that the coverage for every standardized plan is exactly the same with every insurance carrier. So if someone has Plan F with Blue Shield and they want to switch to Plan F with Mutual of Omaha, etc., the coverage is exactly the same. Plan F is Plan F is Plan F…Period!

One of the other reasons people don’t want to switch their Medicare Supplement plan is because they fear change. “Everything has been going great so far. Even though the rates are cheaper and the coverage is the same, why take a chance by going with a different carrier?”

If you decide to switch carriers, the transition is seamless. Your coverage with the first insurance carrier will end at the end of the month, and the new coverage begins on the 1st of the following month. There are no forms or paperwork to fill out. When you go to the doctor after your new coverage begins, they will make a copy of your new Medicare Supplement card, and after that, everything will be the same as before.

The California Birthday Rule

In California, there is a law called the California Birthday Rule. If you have a Medicare Supplement, you are lucky to live in California for more reasons than just the beautiful weather and the great beaches!

happy-birthday

This law guarantees you the right to switch insurance carriers, EVERY YEAR, within 30 days of your birthday (before or after) REGARDLESS OF YOUR HEALTH and without answering any health questions on the application! This is known as your annual open enrollment period. If another insurance carrier is offering the same plan that you currently have, or if they are offering another plan that has fewer benefits, you are guaranteed the right to switch carriers every year if you want to, and you cannot be turned down due to health reasons.

For example, if you have Plan F and another carrier is offering Plan F for a lower rate, you are guaranteed the right to switch to the other carrier every year around your birthday, without answering any health questions on the application. Likewise, you are guaranteed the right to switch to a plan with fewer benefits as well. So if you have Plan F, which has the most comprehensive coverage, you could switch to Plan G if you want to because Plan G has fewer benefits than Plan F.

NOTE: Under the California Birthday Rule, if you have Plan F, you can switch to any other plan, but if you have any other plan, you cannot use the California Birthday Rule to switch to Plan F because it has more benefits than any other plan.

You can actually switch insurance carriers or plans any time of the year, but if you do so at any time other than during the 30 days before or after your birthday, you will have to answer the health questions on the application, you will be medically underwritten, and you could be turned down for coverage due to medical reasons. If you have any serious health conditions, you should apply during the 30 days before your birthday!

In most other states, there isn’t a birthday rule. That means that once you sign up, if you later develop any serious health issues, you would have to meet minimum health and underwriting requirements if you wanted to change your Medicare Supplement plan or your insurance carrier. If your insurance rates increased significantly, you could be stuck paying very high premiums for many years! In California, that would never happen because you can always change your insurance every year around your birthday, regardless of your health!

Rates Vary Significantly Between Insurance Carriers For the Same Identical Plans and Coverage

In California, rates are based on “attained age,” which means that your rates are based on your current age, and they usually go up in price every year as you get older. As mentioned before, there are 10 “standardized” Medicare Supplement plans to choose from, Plan A through Plan N. When I say “standardized,” that means that the coverage for Plan F, Plan G, etc. is exactly the same no matter which insurance carrier that you are with.

Although the coverage is exactly the same with every insurance carrier, the rates (prices) vary significantly between insurance carriers!

dollars

For example, in the 92056 zip code the Plan F rates for a 72 year old man range in price from $164.06 to $278.86 per month! That is a difference of $1,377.60 per year for the same exact plan and coverage! In other words, some 72 year old individuals in the 92056 zip code are paying $164.06 per month for their Plan F coverage while others are paying $278.86 per month for their Plan F coverage!

Examples of How I Recently Saved Clients Money By Switching From Plan F to Plan F

Here are some examples of how I took advantage of the California Birthday Rule and saved my clients a lot of money on their annual premiums by switching them from Plan F with one carrier to Plan F with a different carrier:

  • $142.08
  • $257.64
  • $334.08
  • $338.64
  • $349.68
  • $432.84
  • $498.24
  • $501.78
  • $501.78
  • $516.96
  • $536.76
  • $879.84
  • $1,003.56

Examples of How I Recently Saved Clients Money By Switching From Plan F to Plan G

Here are some other examples of how I took advantage of the California Birthday Rule and saved my clients a lot in their annual premiums by switching them from Plan F with one carrier to Plan G with a different carrier:

  • $203.12
  • $278.96
  • $349.16
  • $425.48
  • $462.68
  • $600.00

Although it’s not the norm, the most I have ever saved one of my clients, a married couple, was over $5,300 per year just by switching from Plan G with one insurance carrier to Plan G with a different insurance carrier! As you can see, it’s really important to shop around and compare rates!

Sometimes I Feel Like “I Get No Respect!”

Once in a while, however, I feel like Rodney Dangerfield because “I get no respect!” Most of my clients are 65 or over and many are retired and on fixed incomes. The majority are very receptive to saving money on their insurance premiums, but once in a while, I have to practically beg people to let me save them hundreds and even thousands of dollars a year on their premiums, and quite honestly, that drives me crazy!

Rodney_Dangerfield2

For whatever reasons, some people, like Client “A” and Client “B,” are apparently not so budget conscious. I was very excited and happy to tell them how much money I could save them, and their response was basically “Let me think about it!”

Think about it? Really? What is there to think about! It seems to me that it’s pretty much a no-brainer. I can hear them now. “Do I want to save $1,200 per year on my premiums for the same exact plan and coverage? Hmm, this is really a tough one. What am I going to do with an extra $100 a month? This might complicate my taxes! Eh, who needs this kind of stress and aggravation!”

stress

I don’t want any of my clients to feel stressed or aggravated! If you’re one of those individuals that prefer to pay wholesale instead of retail, instead of the other way around, please don’t hesitate to contact me if you have any questions or if I can help in any way. If you’d like me to, I’m happy to do the shopping for you, EVERY YEAR, to save you money on your Medicare Supplement insurance!

NOTE: Although this article focuses primarily on Medigap plans in California, I am licensed and work with Medicare Supplement insurance plans outside of California as well. If you need premium rates for other states, I am happy to provide you with that information as well.

If you or someone that you know would like a free quote, please let me know. If you know anyone that might enjoy reading this blog, please feel free to forward it on! And please feel free to send me any of your questions, comments, and feedback!

Thank you,

Ron Lewis

Major Medicare Supplement Rate Discrepancies Between Insurance Carriers!

Do you know that Medicare Supplement (MediGap) rates vary significantly between insurance carriers for the same identical plan and coverage? In the US, there are 10 “standardized” Medicare Supplement plans to choose from, plans A through N.

medigap

NOTE: The plans are labeled A, B, C, D, F, G, K, L, M and N to signify the plan differences. (Plans E, H, I and J are no longer available.)

The word “standardized” means that the coverage for Plan F, Plan G, etc. is exactly the same no matter what insurance carrier you have. For example, the coverage for Plan F is exactly the same with Mutual of Omaha, UnitedHealthcare, Blue Shield of CA, Aetna, Cigna, Anthem Blue Cross,  etc.

Although the coverage is exactly the same between insurance carriers for the standardized plans, the PREMIUMS ARE NOT THE SAME! In fact, most people are paying hundreds of dollars per year more for their insurance premiums than they should be!

For example, the Plan F premiums for a 70 year old living in the 92056 zip code in San Diego range in price from $153.98 per month to $264.19 per month. That’s a difference of $110.21 per month or $1,322.52 per year for the same identical plan and coverage! On the following rate sheet, you can see the different Plan F rates for 18 different insurance carriers in the 92056 zip code. Obviously, some carriers are more competitively priced than others!

Mary Jones Plan F Rates_Page_1

Mary Jones Plan F Rates_Page_2

As you can see, in the 92056 zip code, the Plan F rates for a 70 year old range in price from $153.98 per month to $264.19 per month! Again, that’s a difference of $110.21 per month or $1,322.52 per year for the same exact plan and coverage!

It’s Important to Shop Around Every Year!

The Medicare Supplement market is constantly changing, and so are the premiums. If you have a Medicare Supplement and you haven’t shopped around during the last year, there’s a good chance that you’re paying hundreds of dollars a year more for your insurance than you should be! Many people that I meet haven’t shopped around at all since they first signed up for Medicare! Many of these individuals haven’t heard from their insurance agent since then as well!

This past year, two of my clients (a husband and wife) had Plan G, and they were paying $809 per month for both of them, approximately $404.50 each! I shopped around for them and found them Plan G with a different carrier, Mutual of Omaha, and their total monthly premium is now $367.01 per month! That’s a savings of $441.99 per month or $5,303.88 per year! While this is not the norm, I can usually save most of my clients from $300 to $600 per year each on their Medicare Supplement insurance premiums and often more.

What is the Price Range for Plan F Medicare Supplement Rates?

In the following chart, I have taken the lowest and highest Plan F premiums for ages 65 through 90 in the 92056 zip code. As you can see, the monthly and annual differences are significant for every age group.

2 Lowest Plan F vs Highest Plan F

Is There An Open Enrollment Period for Medicare Supplement Plans?

No. Unlike Medicare Advantage (MA) plans, which have an annual open enrollment period from October 15th through December 7th every year, you can shop around and apply for Medicare Supplement plans all year long.

NOTE: There is a six month-open enrollment period for Medicare Supplements when you first sign up for Medicare Part B.

Do I Need to Be In Good Health to Get a New Medicare Supplement Plan?

Unless you are in a Special Enrollment Period (SEP), if you already have a Medicare Supplement, you need to be in relatively good health to apply for a new Medicare Supplement with a different carrier. However, if you have a Medicare Supplement and you apply during the 30 days before or after your birthday, you don’t have to answer any health questions on the application, and you cannot be turned down due to health reasons if you apply for the same plan or another plan with fewer benefits. For more details, please see the California Birthday Rule section below.

Heart

What Happens If I Am Not In Good Health? Can I Still Apply For a New Medicare Supplement Plan?

Yes, absolutely! Because of the California Birthday Rule, if you already have a Medicare Supplement and you have serious health issues, YOU CANNOT BE TURNED DOWN FOR COVERAGE if you apply during the 30 days before or after your birthday.

California Birthday Rule

In California, there is a law called the California Birthday Rule. This law guarantees you the right to apply for a new Medicare Supplement plan EVERY YEAR, as long as you apply during the 30 days following your birthday. This is also known as the annual 30-day open enrollment period.

NOTE: Although the California Birthday Rules specifies that you can apply, REGARDLESS OF YOUR HEALTH, during the 30 days following your birthday without being turned down for coverage, several insurance carriers will let you apply during the 30 days BEFORE or AFTER your birthday!

This is more advantageous for you because the premiums with these carriers are based on your current age when you apply, and your rates will be lower if you apply during the 30 days prior to your birthday. With these carriers, your new rates are also guaranteed and locked in for the first 12 months of your policy, so there won’t be any unexpected rate increases.

NOTE: Not all insurance carriers lock your rates for the first 12 months.

If you want to take advantage of the California Birthday Rule and apply during the 30 days before or after your birthday,  YOU CANNOT BE TURNED DOWN FOR COVERAGE as long as you apply for the same plan that you currently have OR if you apply for a different plan that has fewer benefits. For example, if you have Plan F (the most comprehensive plan) and you want to apply for Plan F with another carrier to save money on your premiums, or if you have Plan F and you want to apply with Plan G, etc.

NOTE: If you apply under the California Birthday Rule, there are no preexisting waiting periods for prior health conditions.

If you are in relatively good health, you can apply for a new Medicare Supplement plan any time of the year. If you have serious health issues, you should take advantage of the California Birthday Rule and apply for coverage during the 30 days before your birthday to save money on your premiums.

Consider Plan G to Save More Money On Your Premiums

Besides shopping around every year to make sure that you aren’t paying too much for your premiums, if you currently have Plan F, you should consider Plan G. Why? Because Plan G is identical to Plan F in EVERY way except you would pay a small $166 Part B (Medical) deductible one time per calendar year. That is the only difference between the two plans!

NOTE: I have an Obamacare Bronze plan, and my individual medical deductible is only $6,000 per year! I would gladly pay $166 per year for my medical deductible!

In other words, the most you would pay for any out-of-pocket expense with Plan G in any calendar year is $166. However, in most cases, you will save significantly more than $166 per year on your premiums, which usually makes Plan G a better value and more cost effective.

NOTE: The Part B (Medical) deductible is subject to change each year, but historically, it has remained stable.

To see the difference in coverage between Plan F and Plan G, please see the following chart:

Medigap Chart Plans F and G

As you can see, when you compare Plan F and Plan G, everything is exactly the same except for the $166 Part B deductible. Plan F has no deductible, and Plan G is basically Plan F with a small, $166 deductible.

Price Differences Between Plan F and Plan G

Although the two plans are almost identical in coverage, the rates for Plan G are usually significantly less than the Plan F rates. For a 70 year old in the 92056 zip code, the Plan F rates (above) range in price from $153.98 per month to $264.19 per month. The Plan G rates (below) range in price from $132.64 per month to $152.32 per month!

Plan F or Plan G

Plan G Rates Age 70

As you can see, the Plan G rates are significantly less than the Plan F rates for almost the same identical coverage.

Conclusion

The rates vary significantly from one insurance carrier to the next for the same identical plan and coverage. I recommend that you take advantage of the California Birthday Rule and shop around, every year, to make sure that you aren’t paying too much for your insurance. I would also suggest that you check out Plan G as another way to save a lot of money on your insurance premiums.

If you have any questions, or if you would like a free, no obligation quote, please don’t hesitate to let me know! I’m always happy to help!

Ron Lewis OHCC AD

Also, your feedback and comments are appreciated!

Thanks!

Ron Lewis
Ron@RonLewisInsurance.com
(760) 525-5769 – Cell
(866) 718-1600 – Toll-free

Save Money On Your Medicare Supplement by Comparing Rates Each Year

One of the most rewarding parts of my job is helping my clients save money on their Medicare Supplement (Medigap) insurance premiums. Most of the time, I can usually save individual clients at least $30 to $50 per month ($360 to $600 per year) on their premiums. Occasionally, I have saved them as much as $1,000 to $1,200 per year on their premiums!

medigap

I don’t mean to come across as bragging, because I’m not. However, I am very happy and excited because this past week I was able to save one of my clients (a husband and wife on a fixed income) over $5,300 per year on their Medicare Supplement premiums!  I was able to do this just by simply switching them to the same exact plan that they had, but with a different carrier!

They had Plan G with another company for quite a few years, and they were very happy with the company and their coverage. Their insurance rates were very low when they originally took out their plans, and the company always paid their claims promptly and without a problem, just as most Medicare Supplement insurance companies do. However, over time, their rates crept up, slowly but steadily. Until this past week when they called me, they didn’t realize that they were literally paying thousands of dollars more for their insurance than they should be!

Most people shop around every year or two and compare rates on their auto and homeowner’s insurance. Medicare Supplements are no different. If you have a Medicare Supplement plan, it is critically important that you shop around every year and compare rates between various companies because insurance rates vary significantly from one carrier to the next for the same identical plan and coverage. For example…

For a 72 year old female living in the 92056 zip code, the current Plan F rates range from $164.06 per month to $245.50 per month! That is a difference of $81.44 per month or $977.28 per year more for the same exact insurance coverage!

Attained Age

In California, Medicare Supplement insurance premiums are based on attained age. This means that as you get older, your rates usually continue to go up every year. Many companies start off at the “younger” ages (65 to 70) with very competitive rates, but over time, the rates continue to go up. Every company is different, and some companies raise their rates a lot more than others.

If you become complacent and don’t shop around every year to compare rates, you are probably paying hundreds or even thousands of dollars more per year on your insurance premiums than you should be!

California Birthday Rule

In California, there is a law called the California Birthday Rule. This law allows anyone with a Medicare Supplement to switch to another insurance carrier every year within 30 days of their birthday (before or after), REGARDLESS OF THEIR HEALTH and without medical underwriting, if another insurance carrier is offering the same plan, such as Plan F, at a lower rate. During the annual 30-day open enrollment period, you are also guaranteed the right to switch to a “lesser” plan, such as from Plan F to Plan G, etc.

CA Birthday Rule

If you have a Medicare Supplement plan, you are guaranteed the right to shop around every year within 30 days of your birthday to save money on your insurance premiums. During this period, you cannot be turned down for coverage, regardless of your health.

You Can Apply for Medicare Supplement Plans All Year Long

Unlike Medicare Advantage plans that have an Annual Enrollment Period (AEP) from October 15th to December 7th every year for a January 1st effective date, you can apply for Medicare Supplement plans all year long. The only difference is that if you apply using the California Birthday Rule within 30 days of your birthday, you do not have to answer any of the health questions on the application, and you cannot be turned down for coverage due to health conditions.

If you apply for a Medicare Supplement plan any time of the year other than during your annual 30-day open enrollment period, you will have to answer the health questions on the application, and if you have certain health conditions, you could be turned down for coverage. If you are in relatively good health, you should not have any problem qualifying for a Medicare Supplement plan.

Guaranteed Issue Situations In California

In California, there are certain circumstances when you would qualify for a Medicare Supplement due to a guaranteed issue situation.

CA Bear

If you can answer YES to any of the following questions, you may be eligible for guaranteed issue:

  1. Has your employer-sponsored retiree plan that is supplementing Medicare involuntarily terminated?
  2. Has your employer-sponsored retiree plan stopped providing Medicare supplement benefits or the Medicare Part B 20% coinsurance for services?
  3. Have you lost eligibility for an employer-sponsored retiree plan due to divorce or death of a spouse or family member?
  4. Has your Medicare Advantage plan increased your premium or co-payments by 15% or more, reduced your benefits, or terminated its relationship with your medical provider who was treating you?
  5. Have you moved out of the area of your MA plan or Program for All-Inclusive Care for the Elderly (PACE) organization?
  6. Has your MA plan, Medicare SELECT Plan, PACE provider or any other health plan under contract with Medicare: (a) committed fraud; (b) ended or lost its contract with Medicare; (c) misrepresented the plan you bought, or (d) failed to meet its contractual obligations to Medicare beneficiaries, as determined by the federal government?
  7. Did you join a MA plan or PACE organization when you first became eligible for Medicare at age 65, and you want to switch to a Medicare Supplement policy during your first 12 months in the MA plan or PACE organization?
  8. Have you switched from a Medicare Supplement policy to a MA plan, PACE organization, Medicare SELECT plan, or any other health care organization contracting with Medicare, for the first time since becoming eligible for Medicare within the past 12 months?
  9. Has your MA plan left your area, and if so, did your MA plan benefits end within the past 123 days?

NOTE: Many people with Medicare Advantage plans who have serious health issues can still qualify for a guaranteed issue Medicare Supplement plan. See item #4 above.

What Insurance Carriers Do I Work With?

As a licensed independent insurance agent, I work with ALL the major insurance carriers in California. Most importantly, I WORK FOR YOU, not a particular insurance company! I’m also licensed in Arizona, Colorado, Nevada, and Washington state. Here are some, but not all, of the Medicare Supplement insurance carriers that I work with:

  • Aetna
  • Anthem Blue Cross
  • Blue Shield of California
  • Cigna
  • Health Net
  • Humana
  • Individual Assurance Company (IAC)
  • Mutual of Omaha
  • Oxford
  • Stonebridge
  • Transamerica
  • UnitedHealthcare (AARP)
  • United of Omaha

Let Me Do the Shopping For You!

While it is unusual for me to be able to save most of my clients over $5,300 per year on their annual insurance premiums like I did this past week, it is not unusual for me to give someone a free, no obligation quote and save them anywhere from $300 to $500 per year on their Medicare Supplement premiums. That happens quite frequently.

As an independent insurance agent, I have access to insurance quote engines and other information that is not available to the public. You should take advantage of my knowledge and experience and let me do the shopping for you to save you money on your insurance premiums.

grocery-shopping-cartIf you have a Medicare Supplement plan, please contact me for a free, no obligation quote. More than likely, I will save you hundreds of dollars on your Medicare Supplement insurance premiums.

As one of my clients, I will contact you every year, about a month before your birthday, and I will let you know what the best rates are at that time. You always have the option to either keep your current plan, or you can take advantage of the California Birthday Rule and change carriers if another company is offering better rates.

Either way, I strive to build trust and relationships with my clients. I will not do a magic act and disappear after you have your new policy, 😉 and you will always have the peace of mind knowing that you are not paying hundreds or even thousands of dollars more than you should be for your Medicare Supplement insurance.

If you have any questions, or if you or anyone that you know would like a free Medicare Supplement quote, please contact me at (760) 652-6060 or toll-free at (866) 718-1600. You can also reach me by email at Ron@RonLewisInsurance.com. Your questions and feedback are always welcome!