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Medicare
supplements are standardized by the government so there are two
major criteria: Company stability and monthly
premium. As an independent insurance broker, our main
goal is to alert our clients to the best value taking in to
consideration the above concerns.
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Medicare
Supplement Bulletin
85% of Medicare Supplement
applicants choose the F plan. |
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The
first question when choosing a company is stability
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With any kind of
insurance, what you buy today might not be what you have
tomorrow. If an insurance carrier runs into financial
trouble, they can increase rates, leave the area or
business...either way you lose. In the next 3-5 years, a
lot of carriers will have difficulties because of the increasing
costs.
Lifeguard
just filed for Chapter 11. Health Plan of Redlands went
bankrupt early this year.
Pacificare
(Secure Horizons) has had a rough few years resulting in
them pulling of multiple counties all together. A strong
carrier is the first concern. That being said, Blue Cross
of California is by far the strongest carrier. They are
owned by a company called
Wellpoint
which has been voted the most admired health care company in the
nation 3 years in a row. Stability of the company
means rate stability and coverage reliability in the
future. In terms of current prices, AARP has one
rate for all age bands so younger people are penalized in that
they are supporting the costs for older members. Blue
Shield has a two 1/2 year age band so the average over
Cross' 5 year band is quite a bit higher.
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The
second question when choosing a Medicare supplements is RX
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Do I want medication
coverage?
This single handedly affects the cost more any
other consideration. If you want medication costs
covered, then you would look at the I or J plan. If you do
not, then most people choose the F or Smart Choice
plan. The only difference between the I and J for prescription
coverage is the cap they will pay up to. Both have a $250
deductible, after which they pay 50%. The I plan will pay up to
$1,250/year. The J plan will pay up to $3,000/year. The I
plan is a nice way to have some RX coverage at a lower cost.
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IF
you do not want prescription coverage.
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The F plan or the
Smart Choice is the most popular plan and best value. The
difference is that the Smart Choice has a $1,730 annual deductible
that must be met before the plan goes 100% for Medicare eligible
expenses. Medicare is still paying 80% but you will pay the 20%
until you have met the $1,730. The F plan has no
deductible.
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