Making the Right Decision about Medicare Plans
I recently spoke with my friend’s dad who is 72 years-old and recently purchased a Medicare Supplement (Medigap) plan and Part D (prescription drug) plan. We’ll call my friend’s dad “Roger”. So, Roger had been on a retiree group medical plan for several years and was told last year that he had to purchase a Medicare plan through his company’s preferred agency.
Now, Roger worked in insurance for most of his life and so he diligently researched his plan options and made an informed decision. So, when we spoke the other day, he was surprised to learn that he didn’t know a few important things related to Medicare.
One thing Roger didn’t know is that he could not switch Medicare Supplement plans without undergoing medical underwriting. He thought that each year (during Open Enrollment), he could switch carriers or plans as he deemed necessary or prudent. He didn’t realize that the Open Enrollment period applied to only those enrolled in Medicare Advantage plans or Part D plans.
I told Roger that he could replace his Medicare Supplement plan at any time, as long as he qualified medically. However, his Part D plan is a different story. Then, Roger said that he figured this would change in 2014 as a provision of the Affordable Care Act. I told him this wasn’t true. Although pre-existing conditions will no longer be a factor for those under age 65, this provision does not apply to those enrolled in Medicare.
If people think they can switch their Medigap plan every year, then they might select a carrier that has the lowest rates, but perhaps a sub-standard financial rating. They could unknowingly lock themselves in with a carrier that has a poor history of paying claims promptly and/or a history of high rate increases. These are just examples of potential problems that could result from making a bad choice in carrier selection.
Fortunately, Roger is in good health so he can switch carriers now if needed. He selected a very strong carrier, although he selected a plan that isn’t the best fit for him. After comparing all the standardized plan options, he agreed that there was a better plan for him. Again, the plan selection was based on some things he hadn’t considered. That’s a topic for another day.
So, it is important to get all the facts from an experienced and informed agent, and not just rely on your own research and advice from friends — even if you or your friends worked in the insurance business!
Peachtree Insurance Advisors 678-236-1600 www.insuranceAdv.com
