Information Update from Ohio’s Medigap Connection.
Get your Medicare information from a trusted source – Us, the Ohio Department of Aging, and/or Medicare.gov. You have found updated information as of 1/25/2013
What’s up with this Ohio Medigap rate increase?
Questions about these Medicare supplement rate hikes are common. Because we were getting lots of phone calls on the subject, we decided to tell the whole state by the power of the internet. The fact is, most (if not ALL) Medicare Supplement plans in Ohio will give rate increases each year. Most insurance companies rate their policies by attained age status, meaning that their plans can go up each year with your age. Below are answers to frequently asked questions about recent Ohio Medicare supplement rate increases:
Why has my Medicare supplement rate gone up?.. I haven’t even used my coverage this year!
Medicare supplement rate increases apply equally to all insured members regardless of their health conditions experienced in the last year. An insurance carrier cannot exempt you from rate increases because you are well. Just the same, they cannot single you out for an increase just because you are sick. If they did that, then what would be the point of insurance that you can no longer afford? Instead, Medicare supplement insurance companies calculate their total loss ratios for all clients, and then apply rate increases to certain “blocks of business.”
For example, some Medigap companies increase rates across all clients in a certain geographic area. Others have automatic increases when insured members reach a certain age band, such as age 70 or 75. Still others will apply rate increases to everyone insured on a certain policy, such as Plan F or Plan G or Plan N.
The important things to remember are that every insured member usually experiences at least one rate change per year, and that has nothing to do with whether you are sick or well. The nature of insurance coverage relies on actuarial tables and company’s ability to spread out the potential risk, or losses, over a group of policyholders.
Will my Medigap insurance company raise my rate if I have an expensive long-term health crisis?
The insurance “insures” you against these unforeseen illnesses or medical costs. The company counts on the likelihood of more insured people who are well than there will be those that become ill and have many insurance claims. This natural balance is what protects you from getting targeted for a rate increase if you become sick.
If my Medicare supplement premium goes up, can I just change to a different carrier during the fall Annual Election Period?
Well…not necessarily. The Annual Election Period is for changing your Medicare Part D drug plan. There are no health questions required to change your drug plan. However, the election period has nothing to do with your Medicare supplement.
Actually, you can change your Medicare supplement any time of year – as long as you can pass medical health underwriting. Most of our clients find this confusing because they remember that when they first became eligible for Medicare, they got to enroll in a Medicare supplement policy with no health questions and no pre-existing health condition waiting periods. This is called your Open Enrollment Period, and you only have access to that window for 6 months after your Part B is active. In Ohio, when you want to change Medigap plans, the insurance company can accept or decline you based on health risk.
How can I try to avoid Rate Increases?
First of all, choose a secure insurance company; preferably “A” rated by A.M. Best. Most seniors looking for insurance coverage want to choose an A rated carrier. We highly recommend this because research shows that companies with B+ ratings or higher have a certain level of stability.
Another way to do this is by choosing a non-guaranteed issue Medicare Supplement instead of a plan that is guaranteed issue. For example, a Plan F has guaranteed issue rights. This plan is available with no health questions to people in certain situations. Obviously, these plans will see higher rate increases most of the time because the block of business is not as healthy. Plan G and a Plan N are great alternatives to the Plan F Medicare Supplement.
Shop and change plans every two to three years or so if your health does not stop you from answering the health questions. Our average customer sees over a $500 a year savings … couples will see over $1,000 a year savings.
Get your Medicare information from a trusted source – the Ohio Department of Aging, Medicare.gov, and/or us!
This has been an information update from Ohio’s Medigap Connection.