Medicare Supplemental Insurance Plan

Choosing the Right Medicare Supplemental Insurance Plan

Selecting a Medicare supplemental insurance plan can be confusing for many people. Some people think that they do not need it since they signed up for Medicare part A and B. However, they are the ones that actually need it the worst. It is important to get the supplemental insurance within the first six months of starting traditional Medicare coverage. That is the time when insurance companies must accept all patients that apply. After that point, the insurance companies have the option of refusing to accept certain patients due to pre-existing conditions. There are a few things to understand in order to make the best decision on which plan to go with.

Medicare health insurance companies deal with inflation every year. Benefits adjust automatically on January 1 to accommodate inflation. Every Medicare supplemental insurance plan can experience an increase in premiums based on inflation annually. Some insurance policies also make increases based on age or community. Another factor to understand is that the government regulates what plans insurance companies can offer. Each plan is the same matter which company from which you purchase it. The biggest difference is the price you end up paying each month.

Insurance companies use three methods to determine how much each person pays for their Medicare supplemental insurance plan. Insurance companies refer to the first method as community rated. This means that an insurance company charges the same premium for everyone in a certain geographical location regardless of how old they are. If they raise the rate on one person in this area, they will raise the rates on others. This is in addition to the inflation change every year. Insurance companies refer to the second method as issue age. This means that the insurance company sets the premium based on when you purchase the first premium. These policies will not increase premiums based on increases in your age. Insurance companies refer to the third method as attained age. This is not the right option for anyone. As you increase in age, the insurance company increases your premiums based on how old you are. That is in addition to the amount of change each year for inflation.

If you are looking for a Medicare supplemental insurance plan, taking the time to do your homework first is in your best interests. It can save you thousands of dollars in insurance premiums over the lifetime of using the plan.