Last month my article discussed COVID-era telehealth provisions that have been extended several times. Nothing like waiting until the last minute! While these temporary telehealth benefits continue for now, please note that if these provisions are not permanently approved, the way you receive healthcare may need to change in the future.
What's Behind Rising Medigap Rates
We are receiving emails and phone calls in regard to the rate hikes on Medigap Supplements this year. There could be several reasons for this – if you are with a smaller company with a small risk pool, their loss ratio may be too high – meaning they are paying out more than they are taking in. Another reason is inflation. We have had record high inflation rates the past few years and medical goods and services are not immune to that – in fact, the medical inflation rate usually averages higher than inflation on other goods and services – sometimes twice as much. Some of the other factors affecting rates are the aging in to Medicare of Baby Boomers – it is estimated that 4.1 million Americans are turning 65 each year through 2027. There are 71 million "baby boomers" in the U.S. currently and many of them are in their mid to late 70's. As people are living longer, health-care costs for those folks are rising. In addition, Chronic conditions like diabetes, heart disease and obesity are on the rise which requires ongoing care and leads to higher healthcare spending. There are new technologies and new drugs – most of which come with high price tags. Other costs that affect rates are administrative costs, waste, and increasing labor costs.
Across the country, we're seeing significant rate increases from major carriers. These increases reflect the broader trends affecting all Medicare Supplement insurers nationwide.
If you want to review your Medigap supplement for lower premium options, we are certainly happy to meet and go over your options but, in most cases, you will have to medically qualify to change. If premiums become too unaffordable, you can always look at Medicare Advantage PPO plans during the upcoming annual enrollment period this year.
If you'd like to schedule a meeting with your advisor, give us a call at 602-281-3898. We are happy to help make your healthcare journey 123Easy.
By American Retirement Advisors
American Retirement Advisors helps retirees and pre-retirees navigate Medicare, estate planning, and retirement income — so you can enjoy the retirement you've earned.
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Easy Eddie's Take
This explanation of Medicare Supplement rate increases really hits home for a lot of folks I talk with. Let's take a look at this together. When people ask me "Why is my Medicare Supplement Plan G premium going up so much?", I explain that Medicare Supplement plans (also called Medigap) are different from Medicare Advantage plans. With Medigap Plan G, Plan F, or Plan N, you're in a risk pool with other people who have the same plan from the same insurance company. When medical costs rise across that group, everyone's premiums go up together.
Here's what many people don't realize: you do have options even when facing a big rate increase. During Medicare Open Enrollment (October 15 through December 7 each year), you can switch from a Medicare Supplement to a Medicare Advantage plan without medical underwriting. Medicare Advantage plans often have lower monthly premiums, though they work differently with networks and copays. The Centers for Medicare & Medicaid Services also allows you to try a Medicare Advantage plan and switch back to Original Medicare plus a supplement within your first year, though you may need to qualify medically for the supplement.
A little planning ahead can help you understand all your Medicare coverage options before you need to make a change.