Medicare Insurance Companies – Best Medicare Supplement Plans
So, you have found the right Medicare supplement plan, but which insurance company should you go with? How do you research Medicare supplement insurance companies? Which is the best Medicare supplement insurance company in your area?
Of all the decisions that must be made when starting Medicare, choosing the wrong insurance company will have the greatest negative impact on your lifetime Medicare costs. More so than which Medicare supplement plan you choose.
In fact, choosing the wrong Medicare supplement insurance company can result in your paying more than twice the premium over your lifetime than you would pay for the exact same benefits with the right company.
How do you research a Medicare supplement insurance company?
When I decided to make a video on researching an insurance company the first thing became apparent was that there is simply too much information to share for one video. That is why this is number two in a three-part series. The first video goes over the number one most common mistake I see people make. It’s a mistake that almost always results in a bad decision, which is why there is an entire video on the subject.
The second thing I realized is that no matter how often I try to steer people toward the right way to research an insurance company, unless I go over what not to do, they always revert to tangents that are not relevant to a Medicare supplement insurance company.
Can you imagine spending days if not weeks on your research only to find out what you are researching isn’t relevant to your Medicare? I want to help you avoid that mistake.
That is why this video is going to focus on what not to do, and why. Where have others gone wrong in their research that corners themselves into a bad decision. Once you know what not to do and why, learning where to focus your energy will be a breeze.
This video on Medicare supplement insurance companies includes a lot of information not disclosed in any of my other videos and that I have not seen anywhere on the internet. In this video, we will focus on how to research Medicare supplement plans and Medicare supplement insurance companies. The information in this video is meant to compliment my other videos. The most popular include Medicare Explained, Medicare Supplement Plans Explained, Medicare Advantage Plans Explained, Medicare Part D Explained and others that detail various Medicare supplement plans and what you need to know about Medicare. An easy way to find those videos on YouTube is to either subscribe to my channel and take a look at the New to Medicare Playlist or simply search hashtag #MedigapSeminars from a Google or YouTube search bar.
In the meantime, grab a pen and paper and let’s get started.
As I go through this video, I am going to assume that you have already chosen which Medicare supplement Plan is right for you. If you haven’t, then please see my videos on the various Medicare supplement plans for help in that area.
I stress in many of my videos; you should find the Medicare plan that you will want to have when you are sick or injured. Not just based on your health today but based on the changes in your health that can happen as you age.
The reason for this is that in most states, the ability to change Medicare supplement plans or insurance companies is not guaranteed. You must qualify medically to make a change. That means you cannot wait for your health to deteriorate and then change to a plan or insurance company that is best suited for your deteriorating condition.
As you choose a plan for your budget, keep in mind that prices will rise over time. Of course. If you are starting your Medicare at age 65, you can have 20 to 25 years or more of compounding price increases ahead of you. You do not want to choose a plan you can barely afford today. That would not be wise.
Please read my companion article on this subject titled How to Research a Medicare Supplement Insurance Company
Here is where this video gets interesting:
I must stress my strong disagreement with some of my competitors and friends on YouTube that trigger your emotions so that you fear price increases. There are videos that show outrageous price increases on certain plans. What is not said or shown is that they are using price increases from small, second or third tier insurance companies. Companies that I avoid and would never recommend to a client. They are scary price increases for sure but are not representative of industry averages or norms.
Your Medicare decisions should be based on logic, not emotion. On Knowledge, not fear. And on the truth, not deception. Do not let anyone scare you out of a supplement plan that may be right for you.
Let’s start with the most important point you need to know about your Medicare supplement choices.
The simple truth is that price increases over time are influenced more by the insurance company you choose to manage your Medicare supplement plan, than by the supplement plan itself.
If you are with the right insurance company, it will not matter if you are in a Medicare supplement Plan G or Plan N, both should have manageable price increases relative to inflation.
Let me repeat this because it is very important. If you get nothing else out of this video, at least remember this; the price increases of your Medicare supplement over your lifetime are influenced more by the insurance company you choose to manage your Medicare supplement plan, than by the plan itself.
I am often asked; Is there one plan with higher price increases than another?
The answer is simply that in general, you should expect that the more benefits a plan offers, the higher the average annual price increases over time. For example, a Medicare supplement Plan F should increase in price at a faster rate than Medicare supplement Plan G, which in turn should increase at a rate faster than Medicare supplement Plan N and so on.
However, I can show you Medicare supplement Plan G with the wrong insurance company that increased at a rate that makes it more expensive than a Medicare supplement Plan F with the right insurance company. Or a Medicare supplement Plan N with the wrong company that is more expensive than a Plan G with the right company.
Let’s take a look. I’ll bet you will find this just a little bit enlightening if not disturbing.
This is a screenshot of my quote engine. What I am illustrating here are Medicare supplement Plan G prices for a 75-year-old non-smoking male in Dallas, Texas. There were 56 separate insurance quotes for this zip code.
This illustration is showing the five lowest cost Medicare Supplement Plan G’s vs the five highest cost. $144.01 to $292.15 per month. Same benefits, exactly. That’s over a 100% difference in price for the same benefits.
If you have a pen and paper, write that range down.
Now let’s look at Medicare supplement Plan N. Same person, same place and same age. $117.38 to $287.71 per month. All Plan N’s have the exact same benefits.
Anyone with the more expensive Plan N insurance companies are paying more for their Plan N than people with the lower cost Plan G insurance companies.
Yes, there are people who have a Plan N with the wrong insurance company that are paying more than some people with a Plan G with the right insurance company.
That is happening in every state.
If your choice of plan was more important to the price you pay than the insurance company, then all Plan N’s would be a lower premium than all Plan G’s. But as you just saw, that is not the case. ….Is it.
Price increases over time are influenced more by the insurance company you choose to manage your Medicare supplement plan, than by the supplement plan itself.
This is not a perfect illustration because it is showing prices if you are purchasing at age 75, not prices if you purchased at age 65 and held for ten years. There is a difference. For many companies, the prices are higher for the person who originally purchased at age 65 and is now ten years older.
But the message is clear; choosing the right insurance company is more important to future price increases than which supplement plan you choose.
Again, if you get nothing else out of this video…at least remember that one point.
I am going to cover some important details you can use to help filter out some of the insurance companies that are at a higher risk for price increase later in this series. That will be very important information for you. But first…
Let’s filter out what you do not need to research, so your time is spent efficiently.
As I was thinking about how to present the information, I want to share with in this video it occurred to me that the majority of people we see that are trying to research a Medicare supplement insurance company are researching subjects that are moot.
They are spinning their wheels looking for things that are simply not relevant.
I will be clearer about this in a moment. But I want to start by going over the things you DO NOT need to research about a Medicare supplement insurance company.
Then we are going to go over the most common mistakes, followed by my suggestions for you.
This is where people make serious mistakes that lead to poor decisions.
The first thing you do not need to research on Medicare supplement insurance company is claims paying experience.
When you have a Medicare supplement, your primary insurance is Medicare. That red, white, and blue card.
Medicare makes all the decisions. The Medicare supplement insurance company simply sits there waiting for instructions from Medicare. It then pays whatever Medicare directs it to pay.
Think about this for a moment, no matter which Medicare supplement you have and no matter which you switch to or from, all the benefit decisions are made by Medicare.
If Medicare pays a claim, then your supplement will pay the deductible or coinsurance or whatever portion of the bill it is contractually required to pay. If Medicare refuses a claim, then your supplement cannot pay the coinsurance or deductible and so on.
Medicare’s intent is to cover your Medicare services and supplies deemed medically necessary, and it relies on your doctor to help make that determination.
It does not matter whether you have a Medicare supplement with the best insurance company or the worst, your claims paying experience will be exactly the same.
I want to stop here for a moment just to mention what we see people do when trying to research an insurance company, that is a big mistake. It’s so important that I detailed it in a separate video all to itself. It has to do with using the internet for your research.
Again, I detail this specifically in a separate video Titled Medicare Insurance Companies Biggest Mistake It’s linked here above my left should and linked in the description details below.
Please watch this video next, if you haven’t yet seen it.
The second feature of a Medicare supplement insurance company that you do not need to research are the benefits.
Unlike any other health insurance in the United States, all Medicare supplement plan benefits are standardized by the U.S. Government. In fact, they are written into Social Security Law.
That means the benefits of all Plan Gs are the same, all Plan N benefits are the same, all high deductible plan benefits are the same and so on. If your supplement suggests they have extra benefits, you as the consumer need to keep in mind that any of those extras are not part of your Medicare supplement contract.
Why is this important? It means the extra benefits can be canceled or changed at any time. The insurance company has no obligation to provide them to you.
A good example of this is the infamous Silver Sneakers gym membership.
I have never seen an insurance company offer Silver Sneakers with a Medicare supplement for more than a few years without also having persistent, substantial price increases and / or canceling the program. Most companies drop the program after multiple price increases. Those few that keep the program make their policy holders pay for it many times over in higher-than-average annual rate increases.
The risk to the consumer (you) is that if you choose a Medicare supplement insurance company because of the Silver Sneakers or other non-contractual benefits, you can lose those benefit and be stuck overpaying for your Medicare supplement plan. They do not lower the price when they cancel the benefits.
If you are healthy, we can help you change to a more stable insurance company. If you are not healthy, you may not be able to change.
But I digress.
The bottom line is that you do not need to research benefits because the benefits of a supplement are standardized. Any side benefit can come and go as the insurance company pleases and should not be factored into your decision.
Were you aware that the extra benefits beyond the standardized benefits could be canceled or changed at any time? Please let me know in the comment section below and do you find it surprising?
Another feature I believe is not necessary to research is Customer Service.
Now this is kind of funny…well, to me it is.
I have heard numerus times people who are not clients ask us for a customer service numbers of insurance company xyz.
They will sometimes tell us that they want to call the insurance company to see how quickly they answer the phone.
Oh man. Put yourself in an insurance company’s shoes. You’re trying to do the best for your customers and have staffed a help line. But you then get 100s of calls every day or every week of just people wanting to see if you answer the phone.
Why is this irrelevant? First, just answering the phone says nothing of the knowledge and experience of the people who answer. Some of these insurance companies have high turnover in Customer Service staff. The result is that you are always talking to someone in training. They may have the best intent but can often provide incorrect information. I figured out years ago the best way to make sure my clients get top notch customer service is to provide it myself.
This is important, we do not outsource customer service to an insurance company. If you work with us to purchase your Medicare supplement, your customer service will be through us. There are some things we are not allowed to do. For example, due to anti-fraud measures we cannot change your address or your payment process. But when it comes to important questions, we want to make sure you are not lead down the wrong path.
I have heard some of my competitors say “work with a large insurance company so you get better customer services.” Aaagh. A better answer is work with us and we will be responsible for your customer service.
We have on staff people who are trained and certified in Medicare billing, appeals, coding and so on. We don’t charge for customer service and I want to make sure you get the best service we can provide.
Again, because of anti-fraud protections we are often not allowed to change your address for you or change your banking information. Other than that, I do not outsource customer service and all you have to do is look at our Google 5-star ratings to realize we get it right.
The last subject you do not need to research, is something you should still understand and is often totally misunderstood.
It has to do with the three different pricing structures of Medicare supplement plans.
All Medicare supplement plans have a pricing structure that fits one of three allowed formats.
They are as follows:
Attained Age pricing
Issue Age pricing or
I am going to go over each briefly, so that you understand them. Then I will explain how they are very often misunderstood and what you need to know when looking at insurance companies and the plans they offer. This is where you might need a pen and paper.
First, all Medicare supplement policies are 1-year contracts that are guaranteed renewable. The policy contract year is not a calendar year. It is a contract year policy based on the day you start receiving benefits.
For example, if your policy starts on September 01, then your policy is an annual contract that renews every September 01. Because it is Guaranteed Renewable, no one can cancel your policy or change your benefits. Your benefits do not change.
In addition, any price increases must be equal for everyone with the same plan in the same area. The insurance company cannot single you out for a price increase.
The Attained Age pricing structure is the most common. With Attained Age, the price of the Medicare supplement is based on your age and often your gender depending on your state rules. Every year, on the month that your policy renews, you will have a small price increase that is usually small, about 2%. The actual amount depends on the insurance company.
Think of it this way, each year as you have Attained A New Age, you have a new price based on your new age on your policy anniversary date. Not every January, on the month your policy renews.
The next pricing structure is Issue Age. With an Issue Age policy you will always pay the rate for the age you were when you were Issued the Policy. If you get a policy at age 65, you will always pay the 65-year old rate. Even when you are 90-years old, you will pay the rate of a 65-year old. The age you were when you were first issued that specific policy.
Warning – Do not expect the 65-year-old rate to never change. Of course it will change and can increase substantially over your lifetime, depending on your choice of insurance company. All an insurance company needs do is apply to the state for a price increase.
There are some pros and cons about Issue Age Policies you need to understand.
First the Pro – if you are with the right insurance company you will seldom have a price increase. Your prices will rise. But price increases should be few and far between. Certainly not every year.
The Cons? When you change insurance companies and possibly if you change Plans within the same insurance company you will lose your Issue Age status. For example, if got a policy at age 65 and ten years later (at age 75) you just do not like the company or maybe its price increases and want to change. If you are healthy enough to change insurance companies, you will lose your Issue Age position. Instead of paying the 65-year-old rate, you would pay the 75-year-old rate. That can cost you.
The second Con with Issue Age policies is that if you are with the wrong insurance company you can experience price increases every year. I know of several insurance companies that use every new year as an excuse to raise rates. Even more frustrating, they only raise rates on existing policy holders. That way their introductory rate on the quote engine never changes, but your price does.
Insurance companies that do this know you are not likely to change companies because you will lose your Issue Age position. It will cost you to move. You are in a bad situation and they take advantage of it.
Again, it is the prime theme of this video, choosing the right insurance company is more important that which plan you decide to use.
The third pricing method is called Community Rated.
The Community Rated price structure is very simple.
Everyone in the same area (a zip code or region) pays the same price for the same policy regardless of age or gender. It doesn’t matter if you are 65 or 85, male or female, you pay the same price.
Prices may still be different between insurance companies, but for the same Medicare supplement plan from the same company, the price will be the same.
As you consider these pricing structures, here are the three things you need to know.
First, you will not have the ability to shop around for different pricing structures.
You will not have this plethora of choices between the different pricing structures.
Some states require that all Medicare supplement policies be priced as either Issue Age or Community Rated. In States without such regulation, you will find Attained Age policies.
Second – there is no one pricing structure that will provide you a lower cost over your lifetime. It does not work that way.
In fact, the most expensive states for Medicare supplement plans are states like New York, Washington State, Connecticut, and Florida. Each of these states requires all their Medicare supplement policies to be priced as Issue Age or Community Rated.
The states with some of the lowest prices over your lifetime include Texas, Virginia, the Carolina’s. Each of these states have no regulation on pricing structure, so those low-priced plans are all Attained Age. And with each of these states you may never pay as high a rate as you do from day one as a 65-year-old in the expensive sates I mentioned.
No matter what pricing structure you have, insurance companies can and will increase their premiums over time. All they do is apply to the state for a rate increase.
There is no pricing structure that turns an insurance company into a philanthropic organization.
Third – if you live in a state with Attained Age policies and you come across a policy that claims to be Community Rated or Issue Age caveat emptor.
In most cases, the only reason an insurance company would offer a Community Rated or Issue Age plan in a state that does not require such pricing is to make you, the Consumer, believe you are getting something you are not getting.
In fact, one insurance company offers plans they call Community Rated and markets it as competing with the Attained Age policies. But that “Community Rated” policy is a different price depending on your age, in some states there are different prices by gender. Even more, it has automatic annual price increases higher than most attained age policies. It is not a true Community Rated policy. But the insurance company knows most people have a false belief that a Community Rated policy offers a lower life-time cost, and they prey on that misunderstanding to generate sales.
The bottom line: if you live in a state that does not mandate that price structures be either Issue Age or Community Rated, you will find the lowest cost over your lifetime with an Attained Age policy.
So, to recap
You do not have to research claims paying history or benefits because that is the same regardless of the insurance company. You do not need to research their customer service if you work with us because we do not outsource our customer service to the insurance company.
Customer service is not about just answering the telephone. It is about having the knowledge and experience to provide you with the correct answer to your questions.
Her is an example that might shed some light on exactly the point I am trying to make.
There was a client who had a very expensive injectable osteoporosis drug. She called the insurance company to see if she could get the price down. The Medicare supplement insurance company told her that was covered under Part D, they can’t help her.
She called the Part D company they told her there is nothing they can do. It’s a tier 3 drug and she can’t get a lower price.
Finally, she called me. I explained that her particular prescription, as she was taking it could was covered under her Prescription Drug plan and very expensive. She knew that.
But then I explained that there was a way that she could change how she was taking the same medication and have it completely paid for by Medicare Part B and her supplement. The drug will go from very expensive, to 100% covered by her insurance.
I walked her through the steps she would need to take and the conversation she needed to have with her doctor.
The problem was solved.
That’s why we do not outsource customer service.
Lastly, you will not find a price structure that automatically provides a lower premium over your lifetime. There is no magic price structure that will make the insurance companies become philanthropists and give up their ability increase prices with inflation.
Now you know what not to do and some of the traps that can easily be avoided.
Your next step is learning what you should do when researching a Medicare supplement company. In the video that preceded this one you found out what resource you can trust to find the legitimate complaints against any insurance company.
In the next video of this series, I go over some of the things I look at when evaluating an insurance company. Each of our clients benefits from both my knowledge and my experience in selecting insurance companies that are more likely to offer you the lowest and most stable prices over your lifetime.