2017 Medicare Supplement Plan Changes
No major comprehensive changes are coming to Medicare Supplement (MS) Plans in 2017. However, that doesn’t mean that a change isn’t coming to your specific plan, also referred to as a Medigap plan. Since these plans are sold by private insurance companies, they can raise plan prices each year. Your MS Plan premium may rise in 2017 due to inflation, rising health costs, and/or your age, depending on which type of plan you have.
Looking to get more general information on what your Supplement Plan may or may not cover? Click here. Otherwise, keep reading to learn about 2017 changes, trends and plans.
Cost changes to Supplement plans in 2017
Supplement plans are standardized in most states across the nation, meaning they offer the same benefits no matter where you are or who you buy from. In Massachusetts, Minnesota, and Wisconsin, Medigap policies are standardized in a different way. Your benefits typically won’t change from year to year. That being said, plans can vary in cost. Insurance companies are allowed to raise the cost of your plan several times a year. However, Medigap providers typically try to only raise premiums once a year.
You may see your premium rise in 2017 due to inflation, rising health costs, and/or your age. Whether or not your premium rises and the amount it rises by really depends on how insurance companies price their plans. The three main factors companies use to price their plans are as follows:
- Community-rated (no-age related): Premiums are not priced based on your age, but may rise due to inflation and other factors.
- Issue-age-rated (entry age-rated): If you buy this type of plan at a younger age, your premium will be lower. Your premium will not increase due to age, but may rise based on inflation and other factors.
- Attained-age-rated: If you buy this type of plan at a younger age, your premium is lower. However, premiums will increase as you age and can also rise based on inflation and other factors.
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2017 Medigap trends
Understanding the trends in enrollment can help you decide on the right plan for you. It can also help you prepare for future changes in Medigap.
Here are some of the major trends in the Medicare Supplement industry, with information from The Henry J. Kaiser Family Foundation (KFF) and America’s Health Insurance Plans.
- Enrollment in Supplement plans increased from about 10.6 million to 11.2 million from 2013 to 2014.
- Though Plan F, an MS Plan, continues to be the most popular plan across the nation, Plan N had the highest growth in enrollment from 2013 to 2014.
- 23% of beneficiaries had a Supplement plan in 2010. Medigap enrollment has steadily decreased from 2004 to 2010. The percentage of beneficiaries who have a Supplement plan may continue to decrease as Advantage enrollment increases.
- About half of Supplement beneficiaries were enrolled in Plan C or Plan F. Both of these plans currently cover the Part B deductible. Plan C and Plan F will not be available to those newly eligible for Medicare in 2020, but anyone eligible prior to then will be able to enroll in those plans.
Changes coming in 2020
Big changes may not have come this year, but in 2020, the Medigap industry will change. As it’s planned right now, Plan F and Plan C will be eliminated to anyone that becomes eligible for Medicare on January 1st, 2020 or later.
The effect of these changes will vary based on your eligibility date, state of residence, current Supplement carrier, and health status. Those who are eligible before January 1st, 2020 will not be affected. They will be allowed to keep or purchase Plan F or Plan C.
We encourage you not to be so afraid of these changes and switch plans before you do your research. Make sure to give thoughtful consideration to how these 2020 changes to Medigap will affect you.
How to join or switch plans
We recommend joining a Supplement plan during the Medigap Enrollment Period. This 6-month period begins the first day of the month that you are enrolled in Part B and are 65 years old or older. During this time, federal law ensures that you can’t be charged more or refused a plan as a result of current or previous health issues. This is called a guaranteed issue right.
After Medigap Open Enrollment, you are much more likely to be charged more for a plan or turned down by insurers based on your health. That being said, you may have a guaranteed issue right after the enrollment period if you are in certain situations. You typically have a guaranteed issue right if you have other health insurance and it changes in some way, like if your health plan no longer services your area.
Learn about scenarios in which you have guaranteed issue rights here.
Looking for a lower premium on your plan in 2017? You can usually lower your premium by joining a plan with equal benefits at a lower premium, or enrolling in a plan with lower benefits if you don’t use all of your current available benefits.
Why you should compare Medicare Supplement plans and providers
Since Supplement plan benefits are the same from plan to plan, the two factors you really need to look out for are price and the quality of the company you are buying from. The following companies have a long and reputable history in the insurance industry and are approved by the federal government to provide benefits:
When it comes to shopping for Medigap plans, you have a lot of options. There are 11 plans, from A through N (including F High Deductible). These plans differ in cost and benefits. Plan A covers basic benefits while Plan F offers the highest level of coverage. The comprehensive Plan F is the most popular plan in the country by far and pays for your Part B deductible.
All companies will offer the same benefits for each plan, but their prices will differ. They also may not offer all plans. It’s important that you take a look at the benefits that each plan offers to decide which coverage suits your healthcare insurance needs most. The chart below shows a comparison of the benefits offered by the different Medigap Plans.
Once you’ve nailed down which plan suits you best, it’s time to compare plans from different companies in your area. The following factors will affect the cost of Supplement plans.
- The plan you choose (labeled A through N). Plan A features basic coverage while Plan F offers full coverage.
- Your personal health information. Supplement providers may be able to use your medical or health information to price your plan. They may base pricing on tobacco use, gender, age, and/or location.
- The plan’s pricing system. There are three main pricing systems that insurance companies use: Community-rated, Issue-age-rated and Attained-age-rated. Depending on which type of system your plan uses, plan costs may rise based on age, inflation and/or other costs. Learn more about these plan systems above.
- Discounts offered. Check to see if plans offer discounts. Some plans may offer discounts if you’re a woman, you’re married or you don’t smoke.
- Medicare SELECT plans. Supplement plans that requires you to see doctors in their network (Medicare SELECT plans) may have a lower premium.
Learn more about joining or switching Supplement Plans here!
†You must continue to pay your Medicare Part B premium.