Five Tips For Buying Medicare Supplement Insurance

When you turn 65 and become eligible for Medicare, you’ll need to make another important decision.

You may want to choose to enroll in a Medicare Advantage (MA) plan. About one-third of Medicare enrollees choose an MA plan. In some states like California, they are readily available. However, in other states, there are few MA options.

One of the other more popular options is a Medicare Supplement plan. These are sometimes referred to as Medigap plans and we will use these two terms interchangeably. About 15 million Americans currently have a Medigap plan which offers complete freedom to see any medical professional who accepts Medicare.

We’ll focus on several important facts about Medigap insurance that can help you get the best coverage for the best cost. In fact, the information shared may help you save significant money. That’s always good.

But saving money today is not the only reason to read the tips shared here. They can also save you heartache in the future. That’s because when you choose a Medigap plan option now, it might be an irrevocable choice limiting your future.

TIP #1: Don’t Overpay. Why Pay Double For The Same Plan?

Prices for Medigap insurance vary significantly. Rates are generally established by county and it’s common to find one company charging twice as much as another.

According to the American Association for Medicare Supplement Insurance’s 2020 Medicare Insurance Price Index, a 65-year old Chicago woman could pay as little as $92 a month or as much as $234 monthly for identical coverage. The Price Index reports the lowest and highest prices for Medigap Plan G for some 100 cities across the country.

No one company always offered the lowest cost. And, no single company was consistently the most expensive according to the Price Index. In fact, in some cases, the company that had the lowest cost for men did not have the lowest cost for women. Frustrating? Not really, it just means asking the ‘right’ questions.

TIP #2: Shop For Rate Stability

Insurers can and do raise rates. A policy appearing to be cheap today can be costly tomorrow.

Some insurance companies are new to the Medigap business and may not have real experience on which to base their rates. Others may offer lower premiums as a way to get more initial sales.

This sometimes causes above-average rate increases in future years. For that reason, you’ll want to compare both current costs as well as price stability.

TIP #3: Discounts Can Add Up

Today, many Medigap insurance carriers offer spousal and/or household discounts. Not all do. However the discounts can range from five to as much as 14 percent. The savings can add up to hundreds of dollars a year. And since you are likely to live another 10 or 20 years, you are talking about real money – so don’t pass this up.

TIP #4: Benefit From Savings and Points

Some insurers will give you a discount when you set up automatic payments. Some will offer discounts when you pay annually. Some will let you charge the payments to a credit card. You can see where we are headed.

Let’s say your monthly Medicare Supplement insurance premium is $300. Starting at age 65 and paying for 20 years that equates to $72,000 in premium. If you are married, double that. A credit card that offers a two percent rebate means you’ll save nearly $3,000. If your credit card awards airline points, you will have earned some nice credits.

Tip #5: The Easy Way To Comparison Shop

You sometimes hear the saying, that if you act as your own lawyer or doctor then you have a fool for a client. Choosing the right Medicare plan can be confusing.

There’s nothing wrong with calling any of the dozens of 800-numbers competing for your attention and business. But, often they may represent only one company or have a particular preference.

For that reason, it generally pays to compare your choices and recommendations by seeking out a local Medicare Insurance agent. Some will only focus on Medicare Supplement but today many offer comprehensive options including Medicare Advantage.

It’s nice to have an unbiased agent in your back pocket when you have questions. A national directory of Medicare insurance agents lists some 1,000 specialists by Zip Code. Access is available free and, perhaps best of all, is completely private. You get to see their information without having to enter any information.

A great resource for the latest information is the American Association for Medicare Supplement Insurance’s website. That’s where you’ll find the 2020 Medicare Insurance Price Index and well access to the agent directory.


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