Friday, January 27, 2012

Can Medicare Supplement Insurance Plan Premiums Be Standardized?

Every year, approximately 10 million seniors supplement their Medicare Parts A and B with a Medigap plan. The goal is to handle all of the health care expenses left out of traditional Medicare coverage. Many of these beneficiaries don't even realize that they are paying too much for their Medigap plan, though.

One of the biggest problems faced by those who hope to buy a Medicare Supplement Insurance plan is the variability of premiums as set by insurance companies. Although the benefits of Medigap plans are standardized, insurance companies can sell a plan for whatever price they can get. It's let the buyer beware, and only educated buyers find the best value for their money.

According to a report from the independent rating agency Weiss Ratings, millions of seniors are having trouble shifting through a barrage of plans coming at them from various insurance companies. Here's why.

Even for beneficiaries of the same age and living in the same city, one specific plan, such as Medigap Plan C, can be selling for very different premiums with absolutely no difference in the benefits. Prices can vary by as much as 1,300 percent among plans sold across the nation and here's why.

State regulators allow insurers to price Medigap plans based on the insurance company's expenses and medical costs. If you get Medigap Plan F, for example, you can pay as low as $3,654 or as high as $5,419. There's no difference in coverage, but someone is getting it for almost $2,000 less a year than someone else is.

You Can Get Medigap Plans Without Becoming A Mark

One of the best ways to protect yourself and your money, is to compare prices from several leading insurers before you apply. Talking to an agent who works for every insurance company selling Medicare Supplement plans where you live could take a while, but there is a shortcut. Online websites offer free use of their quote systems. But, using the Internet is not your only option. These websites typically offer free personal assistance as well.

Another thing you want to clear about exactly what each specific type of Medigap Insurance covers. Plan A has the fewest benefits and Plan F has the most comprehensive coverage. The other plans offer a range of choices and combine benefits in various ways. Some plans reimburse for 50, 75 or 100 percent of Medicare's biggest deductible. That's the Part A deductible on hospitalization. It's up to $1,132 and Congress declares how much it will be each year.

While that's a pretty hefty deductible, it's not even an annual cost. The Part A deductible resets after you've been released from a hospital or skilled nursing facility for 60 days. If you need inpatient care again in the same year, Medicare will require you to spend enough to meet the Part A deductible again.

It's important to remember that open enrollment events mean no health questions will be asked. That's another key to keeping your premium costs low. If you shop outside of open enrollment and the insurer is concerned about your health issues, you may be asked to pay higher premiums than healthier people. When you're first eligible for Medicare, you'll have open enrollment, and some insurers offer special open enrollment periods at other times, too.

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