Let’s say you turned 65, enrolled in Medicare and just bought a Medicare supplement plan. Did you make the right decision? What are some of the traps and mistakes?
Please take 3 minutes to read this then decide if you need to reconsider your decision. It might just save you a lot of time, money and grief.
You are turning 65 and about to go on Medicare. Here are some things you need to know about your journey.
Table of Contents
About That Medicare Supplement Plan You Just Bought
You are not alone.
Roughly 80% of retirees about to turn 65 have never bought health insurance before.
My 40 years in the health insurance business was not enough to prepare me for understanding the Medicare system. It took me about a month of research and talking to Medicare specialists before the light bulb turned on.
If it was that difficult for me I can imagine how confusing it is for you and everyone else.
Medicare supplement or Medicare Advantage?
Your Friends May Offer the Worst Advice
Your friends that are on Medicare are probably still confused about what they have and how it works. I know this because I talk to people every day that were told something about Medicare that is 100% wrong and will prove very costly down the road.
They are probably very good at many things, but Medicare experts they are not.
Ask your friends who THEY talked to in making their decision. If they were pleased, ask for a recommendation. Then you talk with that person and decide if they are giving solid advice or simply pushing a product.
Sadly, most agents talk too much and never listen to your needs.
If they bought a $0 premium Advantage plan (along with a bunch of junk to fill the gaps), or Medigap plan F they will learn to regret that choice later down the road.
Things You Probably Don’t Know
When you turn 65 you have ONLY ONE Initial Enrollment Period (IEP). During that time you can purchase ANY PLAN from ANY CARRIER without answering health questions. Your initial enrollment for Medigap begins the month when you turn 65 AND go on Medicare Part B. It ends 6 months later.
During your IEP you can freely change Medigap plans within the same carrier or move from one carrier to another without penalty. Most people we talk to will end up paying a lot more for their coverage than was necessary. It is not too late to change. Don’t let pride stop you from making a better financial decision. (More on this later)
When Can I Enroll or Change Plans?
You have 60 days from the time you turned 65 and enrolled in Medicare Part B to pick a Part D drug plan or Medicare Advantage plan. If you wait, your next opportunity will be during the Annual Enrollment Period (AEP) and you will pay a LIFETIME late enrollment penalty.
If you bought an Advantage plan and then learned that was the wrong decision you can still purchase a suitable Medigap during your IEP. This happens with some frequency so no need to feel embarrassed.
Many of the newer Advantage plans are “front end loaded” so you pay most of the costs of your care without the benefit of a copay. The networks are also more restrictive than you may have been accustomed to with traditional health insurance.
Discovering What You Bought
Medigap is simple, but not as simple as some might think. Sure, the plans are standardized. All plans with the same letter (plan F for example) are identical in every way except the price you pay.
But the simplicity stops there.
Financial ratings don’t matter. “A” rated carriers like AFLAC and Omaha have sucker punched retirees in the past. Offer a low going in rate then substantial increases in later years. Sometimes they stop writing new business with that carrier name.
Then what happens?
Picking the Right Medigap Carrier
Look for LONG TERM STABILITY in the Medicare supplement market. If a carrier doesn’t have at least 5 years in the Medigap market operating under the SAME NAME, you probably want to cross them off your list.
The carrier names are interchangeable and every 3 – 4 years an old carrier will be swapped for a newer one that has rates 20 – 30% below the “old” carrier. The new, lower rates are only for NEW APPLICANTS.
Some carriers have “hot” rates in Georgia right now. But none of them have more than 2 years in the Medigap business an at least one has already had a 9% rate increase.
Which Carrier Did I Pick for My Own Coverage?
You don’t have to do what I do but consider this. I have more experience in the health insurance business than anyone you have talked to so far. There are some paths I won’t take because I know the pitfalls. Maybe you should do the same.
I enrolled in Medicare in September 2015. How many agents have you talked to so far that are also on Medicare?
My guess is none.
I didn’t buy a plan from any carrier with less than 5 years in the Medigap business.
I didn’t buy Medicare supplement plan F.
I didn’t buy a Medicare Advantage plan. Even if I did, I certainly would NOT buy a hospital indemnity plan, a cancer plan, a heart attack plan, etc to fill the gaps. An agent that pushes those policies is all about making as much money as possible off you.
It’s Your Plan and Your Money
Ultimately, whatever choice you make should fit your needs and budget. I don’t expect everyone to make the same decisions I make, nor would I pressure anyone to buy something just because I am doing it. But I do believe my clients deserve to know the choices I will make and why I am making them.
There are more than 250 different Medigap plans and rates in Georgia. You probably looked at half a dozen or less. What did you miss by not seeing ALL the rates?
There are only TWO or THREE Medicare supplement carriers with competitive rates that have 5 or more years in the Medigap business. If you didn’t buy from them you probably are, or will eventually be, paying too much.
When you pay more you don’t get more. You simply paid too much.
Let me know how I can help. Call (404) 252-5859 to speak with Bob Vineyard.
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