Most people know what a Medicare Supplement is. If for some reason you don't, they aren't to difficult to explain! Medicare supplement plans, or Medigap plans, are plans that are purchased through a private insurance company to pay the 20% that Medicare leaves behind. Medicare supplement plans are standardized, meaning that the plans are designed by the government and then given to private insurance companies to market. This means, essentially, that all of the insurance companies that offer these programs offer the exact same plans, just for different prices. The only other difference between one carrier and another, typically, is the company's long-term rate increases. You see, typically Medicare Supplement companies raise their rates every year as you get older. They do this for many reasons, which is such a long explanation it will have to wait for a future article.
Some great ways to spot an insurance company that raises rates 15% per year opposed to one that only raises 5% a year can be tricky for a consumer. Here are a few ways you can do just that!
1.) Big names: Make sure you are working with a name you recognize. Usually the big companies (or the blue chips as I like to call them) are the companies that are best equipped to keep a price consistent. If a company has a smaller, unknown name, that usually means you are not the only person who is not familiar with them. They may be good some day, but do you really want to go through growing pains with your insurance company?
2.) Rate increase history: Ask your broker to show you the company's rate increase history for the last 5+ years. History is a great indication for what the future should hold (roughly) in terms of what to expect. If the broker or agent cannot provide these numbers, get a new broker or agent!
3.) Make sure you are enrolling into plans that are long-term and not short-term. For example, Plan F has stopped taking customers with all carriers that are newly eligible to Medicare starting 01/01/2020. This means without new customers coming in, and the existing customers aging, the prices are expected to shoot up with a majority of Plan F companies. Here is a video I made all about it!
Founder & President of Christian Brindle Insurance Services. Host of "The Everything Medicare Podcast!". Author of the books "The Insurance Funnel" & "Medicare Guidance: Picking the Plan for You.".
I have worked with people on Medicare my entire adult life. You probably don't have to wonder how exciting my life is! Over the years, I have helped countless individuals figure out this extra complex world of Medicare as they age into retirement.