Medicare Supplement Premium Out of Control? What You Can Do About It

The Challenge of Rising Premiums

If you have a Medicare supplement, it is likely because you want great coverage and want to be able to choose your own doctors. Medicare supplements typically offer very good coverage with little or no out-of-pocket cost when you use your supplement. (However, see Which Medicare Supplement Best for You?) In addition, a Medicare supplement allows you to choose your own doctors (including specialists), which is an attractive feature to many. (Though your supplement will only work with doctors who accept Medicare, 91% of doctors work with Medicare.)

While Medicare supplements have attractive features, one knock against them is the rising premium of supplements. Some insurance companies raise their premiums faster than others, meaning one should choose a supplement wisely; but if you are stuck with a company that is raising its premiums beyond your budget, there may be good news for you, as there may be some things you can do about it.

Consider a Different Medicare Supplement

First of all, if you have a Plan F supplement, consider going with a Plan G. As I explained in “Is the Plan F Supplement Going Away?,” Congress’s announcement that, as of 2020, Medicare will not offer Plan F to new Medicare recipients means the premium of Plan F will soon begin to exponentially escalate. Overall, the Plan G Medicare supplement will save you money (but keep in mind you will have an annual deductible [$183 for 2017] with that plan)—both now (anywhere between $200 and $300 savings per year even after paying out the $183 deductible) and even more in the future. (The premium gap between the Medicare Plan G supplement and the Plan F supplement will grow wider each year.) Thus, the Plan G Medicare supplement will be easier on your budget.

Shop Different Medicare Supplement Companies

In addition, shop Medicare supplement insurance companies. Two differences between Medicare supplement companies are: 1) the premiums they currently charge now; and 2) rare increases they will assess. Therefore, compare the rate of the same Medicare supplement, such as Plan G, with different insurance companies offering Medicare supplements. In addition, find out the rate increase history of each of those companies. (Suggestion: Locate a reliable, independent insurance agency specializing in Medicare benefits. That agent should be able to educate you on the rate increase history of different Medicare supplement companies.) Do not settle for the company offering the lowest rate, as that company may turn out to be a nightmare in terms of skyrocketing your premium. If you can discover a Medicare supplement company that has among the lowest rate increase histories along with one of the lowest premiums, that is the company with which you should make application for your supplement.

Understand that changing your Medicare supplement will be based on health qualification. In other words, when you try to change your supplement or apply with a different supplement company, you will have to go through underwriting. That means answering health questions, listing your medications and your doctor, and giving the insurance company permission to access your medical records. This also means there is a possibility you could be declined for coverage with that company.

However, if you are declined for coverage with one company, you can always apply with another company. Underwriting standards vary from one company to another, and I have seen someone be declined with one company and approved for coverage by another company. That would just mean finding another reputable and reliable Medicare supplement company for you.

Perhaps, a Medicare Advantage Plan?

If your current Medicare supplement premium becomes unaffordable for you, and your health history or your current health situation does not allow you to be approved for coverage for another supplement that would save you money, you can always consider an Advantage Plan. An Advantage Plan will definitely provide you with a much lower monthly premium, but you will need to understand that Advantage Plans have networks; that is, it will be important to make sure your doctor(s) is / are in network for the plan you choose.

Furthermore, Advantage Plans are cost-sharing plans, meaning you will pay something each time you use it. It is likely that you will pay more out of pocket for your usage of an Advantage Plan than you will for a Medicare supplement, but you will save on the premium with an Advantage Plan. In fact, it is entirely possible that your overall savings with an Advantage Plan may be greater than with a Medicare supplement; just understand the limitations of an Advantage Plan before enrolling. (For a start, see “Keys to Your Best Medicare Advantage Plan.”)

For some, the Advantage Plan option will be a God-send, while, for others, it may be a last-ditch effort to bring their budget under control. Yet, it is an option.

Fortunately, There Is Hope!

But isn’t it great to know you have options! Thus, if your Medicare supplement premium is skyrocketing out of control, take heart; there is hope. You can bring that spiraling premium cost back down to earth and save your budget.