What to Consider When Choosing a Medicare Supplement Insurance Policy: What Plan Best Suits Your Needs?
The federal government permits insurance companies to offer up to 10 different Medicare Supplement Insurance plans. The plans are designated by letters A through G and K through N. Plans H, I and J were formerly offered, and people who purchased them can continue with them, but they are no longer available to new purchasers. No matter which insurance company you choose to deal with, no plan other than those approved by the government can be offered, and each must be designated by its assigned letter. This means that a Plan F offered by one company must provide the same coverage as a Plan F offered by every other company. Individual companies are not required to offer all ten plans.
Therefore, the first decision one should make when selecting a Medicare supplement insurance policy should be which plan best suits your needs. All plans cover Medicare Part A coinsurance plus hospital costs for 365 days after Medicare benefits are used up. Plans A through G and M also cover Part B coinsurance, three pints of blood, and Part A hospice care coinsurance. Beyond that, the coverages of the plans vary considerably. Plan F is the most comprehensive, and usually the most expensive.
What to Consider When Choosing a Medicare Supplement Insurance Policy: What can I afford?
The Plan chosen should depend upon the amount one can afford to pay in premium, the amount one can afford to pay in out of pocket expenses, and one’s lifestyle. For example, some plans cover foreign travel. While that is a valuable coverage for some people, it may not be of interest to others. Plan F offers a high deductible option, and Plans K and L require higher co-pays until fairly high out-of-pocket limits are reached. For the individual who seldom sees a doctor, and can afford to pay the deductible in the event of a major medical event, the lower annual premiums of these plans may result in considerable savings over several years.
What to Consider When Choosing a Medicare Supplement Insurance Policy: How Does the Insurance Company Price Policies?
There are three different ways insurance companies set annual premiums for Medicare Supplement insurance policies. These pricing policies can result in vastly different prices for the same coverage, and differences in how prices change over time.
- Community Rated policies: Each person who buys, for example, a Plan F from the company, will pay the same price. Price changes over time may occur based on economic factors, but not based on the policy holder’s age.
- Issue Age Rated policies: The price of each policy is based upon the age of the person when the policy is issued. One who is 70 years old when he or she first buys a Plan F will pay more per month than the person who is 65 years old when the policy is first purchased. However, the price will remain the same for as long as the person holds the policy.
- Attained Age Rated policies: The price of each policy is based upon the age of the person each year the policy is held. The price of a Plan F will be the same for all persons who are age 65, but the cost will increase each year as the person gets older.
Because the way a company chooses to price Medicare Supplement insurance policies can cause big differences in prices for the same coverage, one should compare the prices of several different companies in order to find the price that is the most cost effective for his or her circumstances. For a person age 65 and in good health, the Issue Age rating may be best. For one who is older when purchasing the policy, a community rated policy may provide a better deal, for example.
What to Consider When Choosing a Medicare Supplement Insurance Policy: What Kind of Service does the Insurance Company Offer?
This factor may be more individual, location related, and time related than any other. Different insurance companies service their clients in different ways, and different insurance agents behave in different ways. Do you have an insurance agent or broker with whom you have a long relationship, and whom you can count on to provide excellent service at all times? If so, continue to deal with him or her, and the company he or she represents. Otherwise, if you know you and your doctor will need to deal by phone and mail with a company claims center, it would be wise to check on-line and/or with your state insurance regulator to see if that company which offers the really cut-rate deal has a good track record for paying claims quickly, resolving disputes promptly, and treating customers with respect. No one wants to spend hours or days waiting for calls to be returned, being passed from one claims handler to another, and listening to excuses why a doctor has not been paid amounts due. If a company has done that before, it can be expected to do it again. Better to choose a Medicare supplement insurance provider with a known excellent reputation for providing top quality service, even if it means paying a bit more.
What to Consider When Choosing a Medicare Supplement Insurance Policy: Open Enrollment Status
During a person’s open enrollment period (6 months following one’s 65th birthday and Part B coverage or certain other specific circumstances) he or she can purchase any of the Medicare supplement insurance plan offered by a company without regard to a pre-existing medical condition. If one is not in an open enrollment period, consideration must be given to how a particular company treats pre-existing conditions. Coverage may be excluded, or provided only after a waiting period. Different companies have different rules and different waiting periods, so it is wise to check with several before making a choice.
Apart from Medicare supplement insurance policies, it is possible to supplement the benefits provided by Medicare with a Medicare Select plan or a Medicare Advantage plan. These plans are beyond the scope of this article Generally, Medicare supplements provide more comprehensive coverage, but a person investigating options may wish to check out these other plans as well. A Medicare Pathways Benefit Advisor can help you chose the plan right for you.
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