If you are trying to research a Medicare supplement insurance company, to find out which insurance company to use, this article is for you. When it comes to insurance companies, the internet is filled with information that is both inaccurate and often not relevant to your Medicare supplement (aka Medigap Plan). I am often asked what criteria I use to evaluate an insurance company. This article is meant to help you see a bit through my eyes and improve your own research as much as possible.
Medigap Seminars Insurance Agency is an independent insurance brokerage specializing in Medicare. We help people with their Medicare choices in virtually every state from Hawaii to Virginia and Alaska to the Florida Keys. If you find the information presented in our videos helpful, give us a call. Let us show you what we can do for you. Most people start their Medicare research trying to understand the difference between Original Medicare with a supplement versus a Medicare Advantage HMO or PPO, also known as Privatized Medicare or a Medicare Replacement Policy. (Medicare Advantage Plans replace Medicare Part A and Medicare Part B. They do not supplement Original Medicare.) Original Medicare consists of Part A for hospital insurance and Part B for medical services.
After they have come to the conclusion that Original Medicare and a Medigap Plan offer better insurance coverage, more freedom and control over their healthcare they start along the path of researching Medicare supplement plans and then the insurance companies that offer those plans. Different Medicare supplement plans can have varying levels of cost sharing, which impacts out-of-pocket expenses. And that is where they hit a snag or run up against inaccurate and often irrelevant information.
I hope you understand that if you have already decided that you prefer a Medicare supplement plan over a Medicare Advantage you have already made the most important decision. No matter which Medicare supplement plan you choose, you have made the right decision to keep the freedom to choose any doctor or hospital that accepts Medicare. And you have made the right choice to avoid putting your healthcare in the hands of a private for-profit insurance company.
From here, which Medigap Plan is right for you is going to be based more on your personality and your budget more than anything else. I cover that in detail in other videos on Medicare Supplement Plan G and Medicare Supplement Plan N and so on. But what about the insurance company?
Medigap Seminars Insurance Agency Reviews.
To understand how to research a Medicare supplement plan insurance company you must first cross out what we don’t have to research so you can narrow your research to focus on what is important and meaningful.
We know that all Medigap plan benefits are standardized. In fact, the benefits provided by each plan are written into Social Security law so that every person has the exact same experience when it comes to benefits and claims. That mean that when it comes to the medical benefits they offer, all Medigap Plan G’s are exactly the same, all Medigap Plan N’s are exactly the same and so on. You don’t have to research which insurance company offers the best Plan G, for example. They all offer the exact same benefits.
What about paying claims? That’s important because we all know that some insurance companies delay or try to get out of paying claims, right? Well, actually it’s probably all insurance companies. Whenever there is a clause in an insurance contract that allows an insurance company to not pay a claim, they’ll take it. And, if you decided to get a Medicare Advantage plan, that would be an important point to research. But it does not apply to Medicare supplement plans. Let me explain by covering two important features of Medigap plan insurance.
First, when you choose to go with a Medicare supplement plan, Medicare / Original Medicare is your primary insurance. That red, white and blue Medicare card, that is your primary insurance coverage. Your Medicare supplement is secondary. It is Original Medicare that makes all decisions regarding your healthcare. Their goal is to cover what is medically necessary and to rely on your doctors diagnosis for that determination. Your Medicare supplement insurance company has no say. It is not involved in any decisions.
When a doctor or hospital contract with Medicare as a Participating Provider, which means they accept the rates that Medicare sets for all services, they also accept Medicare as their one-stop biller. In-fact the Participating Healthcare Provider contract with Medicare reads, and this quote is pulled from the contract with Medicare speaking to your healthcare provider: “Regardless of the Medicare Part B services for which you are billing, participants have “one stop” billing for beneficiaries who have Medigap coverage not connected with their employment and who assign both their Medicare and Medigap payments to participants. After we have made payment, Medicare will send the claim on to the Medigap insurer for payment of all coinsurance and deductible amounts due under the Medigap policy. The Medigap insurer must pay the participant directly.” What does that mean? That means that the doctor or hospital bills Medicare. They don’t bill your supplement company. They only bill Medicare. Medicare pays its portion and then communicates with your Medigap plan and instructs them what to pay and to whom. That’s it. Your Medicare supplement plan insurance company has no say, none. They have no say in how much they pay or when they pay it. The Medicare supplement insurance company has no say in what service or procedure is covered and what is not. They simply do as Medicare instructs. Nothing more, nothing less. Medicare is in complete control. The bottom line: for a Medicare supplement plan you do not need to research insurance company claims paying history. Medicare makes all the decisions, not the insurance company. The insurance company has no say in what claims are to be paid and Medicare acts as middleman so you are not involved in anything except whatever deductible or copay you are supposed to pay.
What should you be concerned with regarding a Medicare supplement pan insurance company?
Understanding Medicare Supplement Insurance
Medicare Supplement Insurance, also known as Medigap, is a type of private insurance designed to fill the gaps left by Original Medicare. While Original Medicare covers a significant portion of your healthcare costs, it doesn’t cover everything. This is where Medigap comes in, helping to pay for out-of-pocket costs such as deductibles, copays, and coinsurance that Original Medicare does not cover.
Medigap plan insurance is offered by private insurance companies and is available to individuals who are enrolled in Medicare Parts A and B. This supplemental insurance can provide peace of mind and financial protection, ensuring that unexpected medical expenses don’t derail your budget. Additionally, some Medigap plans offer coverage for medical expenses incurred while traveling outside of the United States, providing an extra layer of health coverage for those who travel frequently.
By choosing a Medicare Supplement Insurance plan, you can enjoy more comprehensive health coverage, improve your Medicare benefits and reduce your out-of-pocket costs, making it easier to manage your medical expenses.
What is Medicare Supplement Insurance?
Medicare Supplement Insurance, also known as a Medigap policy, is a type of supplemental insurance designed to fill the gaps left by Original Medicare. While Original Medicare (Parts A and B) covers a significant portion of healthcare costs, it doesn’t cover everything. For example there is typically a large hospital deductible. This is where Medigap comes in, helping to pay for out-of-pocket costs such as deductibles, copays, and coinsurance that Original Medicare does not cover.
Medigap Plan insurance is offered by private insurance companies and is available to individuals who are enrolled in Medicare Parts A and B. By choosing a Medigap plan, you can enjoy more comprehensive health coverage and reduce your out-of-pocket costs, making it easier to manage your medical expenses. This supplemental insurance provides peace of mind and financial protection, ensuring that unexpected medical expenses don’t derail your budget.
Why You Need Medicare Supplement Insurance
Original Medicare provides a number of great benefits to enrollees, but it also has some gaps in coverage. For instance, Original Medicare does not cover the full cost of medical expenses, leaving beneficiaries responsible for paying 20% of the Medicare-approved amount for doctor visits and other medical services. Additionally, Original Medicare does not have an out-of-pocket maximum, which means that beneficiaries may be responsible for paying a significant amount of money for medical expenses.
Medigap Plan insurance can help fill these gaps in coverage and provide financial protection against unexpected medical expenses. By covering out-of-pocket costs such as deductibles, copays, and coinsurance, Medigap plans ensure that you are not left with substantial medical bills. This additional coverage can be crucial in managing your healthcare expenses and maintaining your financial stability.
Types of Medicare Supplement Plans
There are several types of Medicare Supplement Plans available, each offering a unique set of benefits and costs. Understanding these options can help you choose the plan that best fits your needs:
Plan F: This plan provides the most comprehensive coverage, including the Medicare Part B deductible and excess charges.
Plan G: Similar to Plan F, but does not cover the Medicare Part B deductible.
Plan N: Covers most out-of-pocket costs but requires a copayment for doctor visits and emergency room visits.
Plan A: Offers basic coverage, including hospitalization and medical expenses.
Plan B: Similar to Plan A, but also covers the Medicare Part A deductible.
Plan C: Covers most out-of-pocket costs but does not cover excess charges.
Plan D: Covers most out-of-pocket costs but does not cover the Medicare Part B deductible or excess charges.
Plan K: Covers most out-of-pocket costs but requires a copayment for doctor visits and emergency room visits.
Plan L: Similar to Plan K, with copayments for doctor visits and emergency room visits.
Plan M: Covers most out-of-pocket costs but does not cover the Medicare Part B deductible or excess charges.
Each plan is designed to cater to different needs and budgets, so it’s essential to compare the benefits and costs of each to determine which one is right for you.
Medicare Advantage vs. Medicare Supplement
Medicare Advantage and Medicare Supplement are two different types of health coverage options available to Medicare beneficiaries. While both options can provide additional coverage beyond Original Medicare, they have some key differences that are important to understand.
What is Medicare Advantage?
Medicare Advantage is a type of health insurance plan offered by private insurance companies. It is designed to provide an alternative to Original Medicare and often includes additional benefits, such as prescription drug coverage, vision, and dental coverage. Medicare Advantage plans are typically HMO or PPO plans, which means that beneficiaries must receive care from a network of providers in order to receive coverage.
Key Differences Between Medicare Advantage and a Medigap Plan
There are several key differences between Medicare Advantage and Medicare Supplement:
Network: Medicare Advantage plans have a network of providers, while Medicare Supplement plans do not. This means that beneficiaries with a Medicare Advantage plan must receive care from a network provider to receive coverage, while those with a Medigap plan can see any provider who accepts Medicare.
Cost: Medicare Advantage plans often have lower premiums than Medicare Supplement plans but may have higher out-of-pocket costs. Medicare Supplement plans, on the other hand, often have higher premiums but lower out-of-pocket costs.
Coverage: Medicare Advantage plans often include additional benefits, such as prescription drug coverage, vision, and dental coverage, while Medicare Supplement plans only cover out-of-pocket costs associated with Original Medicare.
Flexibility: Medicare Supplement plans are more flexible than Medicare Advantage plans, as beneficiaries can see any provider who accepts Medicare and do not have to worry about network restrictions.
Ultimately, the choice between Medicare Advantage and Medicare Supplement depends on individual circumstances and preferences. It is important to carefully consider the pros and cons of each option and choose the one that best meets your needs and budget.
Choosing the Right Medicare Supplement Plan
Selecting the right Medicare Supplement Plan can be a complex and overwhelming process. To make an informed decision, consider the following factors:
Your Health Needs and Medical Expenses: Assess your current health status and anticipate future medical needs. Choose a plan that provides adequate coverage for your medical expenses.
Your Budget and Financial Situation: Determine how much you can afford to spend on premiums and out-of-pocket costs. Ensure the plan fits within your budget.
The Level of Coverage You Need: Different plans offer varying levels of coverage. Decide whether you need comprehensive coverage or if a basic plan will suffice.
The Cost of the Plan: Compare the premiums and out-of-pocket costs of different plans. Look for a plan that offers the best value for your money.
The Reputation and Ratings of the Insurance Company: Research the insurance company’s reputation and financial stability. Choose a company with a strong track record and positive customer reviews.
Utilize online resources, such as Medicare.gov, to compare different plans and insurance companies. This will help you find the best option that meets your needs and budget.
Researching Medicare Supplement Insurance Companies
When researching Medicare Supplement Insurance companies, it’s crucial to consider several factors to ensure you choose a reliable provider:
The Company’s Reputation and Ratings: Look for companies with positive reviews and high ratings from reputable sources. This indicates a history of good customer service and reliability.
The Company’s Financial Stability and Solvency: Ensure the company is financially stable and capable of paying claims. Financial stability is a good indicator of long-term reliability.
The Company’s Customer Service and Support: Evaluate the quality of customer service. A company with excellent customer support can make a significant difference in your overall experience.
The Company’s Claims Process and Payment History: Research how efficiently the company processes claims and their history of paying claims on time.
The Company’s Network of Healthcare Providers: Check if the company has a broad network of healthcare providers. This ensures you have access to a wide range of doctors and hospitals.
Use online resources like the National Association of Insurance Commissioners (NAIC) and the Better Business Bureau (BBB) to gather information and ratings on insurance companies. This will help you make an informed decision.
Evaluating Insurance Company Ratings
Insurance company ratings provide valuable insights into a company’s reputation, financial stability, and customer service. Several rating agencies evaluate insurance companies, including:
A.M. Best: Focuses on the financial strength and stability of insurance companies.
Moody’s: Provides ratings based on the company’s creditworthiness and financial health.
Standard & Poor’s: Evaluates the financial stability and risk of insurance companies.
Fitch Ratings: Assesses the financial strength and creditworthiness of insurance companies.
These rating agencies consider various factors, such as financial stability, claims payment history, and customer service, to provide comprehensive ratings. Use these ratings to compare insurance companies and make an informed decision about which company to choose.
Remember, while ratings are essential, they are not the only factor to consider. Also, take into account the company’s reputation, customer service, and network of healthcare providers to ensure you select the best Medicare Supplement Insurance company for your needs.
Best Medicare Supplement Insurance Companies
I suggest reading my companion article on this subject, titled “Best Medicare Supplement Insurance Company”
When I evaluate an insurance company I am looking for a company with solid financials that offers price stability over the long run. As you know, when you retire and no longer have a paycheck you need to have price stability and predictability in order to budget your expenses. Surprise price increases in your health insurance can wreak havoc on your budget. So, before I make a recommendation to my clients I look at these things;
1. How long has the company been offering Medicare supplement plans?
2. What is the AM Best Financial Rating?
3. Their pricing history, philosophy and loss ratio.
4. Does the Medicare supplement insurance company rely on Brand Loyalty or a fraternal identity to market insurance?
5. Does the company have a national presence or is it a local or regional company?
6. Last but not least; Are there any industry changes that can impact the insurance company?
Let’s go over each of these briefly.
1. How long has the insurance company been offering Medicare supplement plans? This question is important because we want to filter out companies that are new to the Medicare supplement market. Why? Because whenever an insurance company enters a new market, they will start by offering their product at a very low price, sometimes even at a loss, in order to build market share.
Once they have built a solid client base they will raise their prices, increasing your insurance premium, to a point where they are able to make a profit. Often, those price increases are significant and can be over several years.
This is an easy problem to avoid. We avoid this problem by ruling out an insurance company until it has been offering Medicare supplement plans in your area for at least five years.
2. What is the Medicare supplement insurance company’s AM Best Rating? AM Best is a financial rating company that rates an insurance company’s ability to pay it’s claims. I personal prefer to stay with A rated or better companies. To be clear, if a Medicare supplement insurance company cannot pay its claims or goes belly up, Medicare has your back. However, I have found that lower rated companies often have less predictability and stability in pricing. Again, it’s about trying to find a company whose prices are fair and predictable over your lifetime.
3. That being said, there our third issue; actual pricing history. Some companies have a pricing philosophy that is to low-ball your entry price. Gather as many people as they can. Then raise prices gradually but consistently. They know most people don’t go shopping for price. Those that do tend to do so only AFTER they have reached a certain pain threshold. This pricing philosophy is much like the Frog in Water Theory. You can place a frog in lukewarm water and slowly raise the temperature. Most frogs will stay right where they are even after the water is hot enough to kill them. From our three decades of experience in this industry, we are fully aware of which companies to avoid.
4. Does the Medicare supplement insurance company rely on Brand Loyalty or a fraternal identity to market insurance? This is really a continuation of item #3 above. I have found that those insurance companies that use brand loyalty to sell their products also use that brand loyalty to keep their customers from shopping plans as they raise prices. In other words, they use your loyalty as a means to get away with consistent price increases. (Can you name two major insurance companies or groups that use their brand to market their Medicare supplement plans?) The same is true to a lesser degree with insurance companies that rely on a fraternal loyalty, like some religious based insurance companies. These plans also suffer from having a smaller client base, which also results in less price stability.
5. Does the Medicare supplement insurance company have a national presence? Or is it local or regional? The insurance industry is consolidating. When you choose an insurance company that is local or regional you are increasing your risk of being in a Medicare supplement plan with an insurance company that is being bought-out by a larger company. This is important because there is no guarantee that larger insurance company wants to keep selling Medicare supplements. If they spin off the Medicare supplement division, you may be in luck with a new owner. However, if the keep the Medicare supplement division for its revenue but stop selling new Medicare supplement plans, you are then is a closed pool with no guarantee you can get out. I have seen this happen twice. It’s an easy issue to avoid. Stay with a national company.
6. Last but not least; Are there any industry changes that can impact the insurance company? I can write about this subject for pages. Suffice it to say that at this time that some companies are making changes to their corporate structure that can leave the individual consumer stranded in a plan that is closed to new customers. The result is shockingly high price increases, seemingly from nowhere. This too is easy to avoid if you understand the industry.
I understand that after reading the above there will be some people asking themselves; How am I supposed to do this research on my own? The simple truth is that while the internet offers a lot of information, it does not necessarily offer all the information you need and certainly not for free. Some of the financial and historical information I use costs over $3,000 per year. Of course, experience cost years of life. If you are able to sift through the some of the misinformation on the internet, you are still left with more information on this subject than if you had done no research at all. That’s a good thing. It’s at least one step closer to finding the right Medicare supplement insurance company. I believe it was Albert Einstein who said “Information is not knowledge”. Another wise man once noted that “Knowledge is not Wisdom and Wisdom in not experience.”
Our knowledge, wisdom and experience cost you nothing. When you decide to work with Medigap Seminars Insurance Agency we offer decades of experience and understanding of both the insurance companies and the industry for free. We are not philanthropists. We do this for a living. But it is the Medicare supplement insurance company that pays us when you apply for your insurance through us. You can’t save money by going direct. An insurance company can’t offer two sets of prices. What you get is more confidence in your decision and a guide helping avoid all the pitfalls that an uninformed consumer can so easily fall into.
In addition to helping you find the right plan and insurance company to work with, my clients know that we have their back. As you go through your Medicare experience, issues like incorrect billing, the need to appeal decisions and improper denial of service can and do happen. I staff experts in Medicare billing and appeals so that we can help our clients with any problem that arises as you go through your Medicare experience. We are committed to working with our clients overcome any problem that may arise from their Medicare experience in the years ahead. This is a free service we offer to all active Medicare supplement clients. Your purchase of a Medicare supplement is just the beginning.
If you would like to find out what we can do for you, please complete this Medicare Supplement Quote Request. We will email you a quote and offer our time to help you with your decision. Our goal is to help you make an informed decision.
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