Medicare Supplement Getting Too Expensive? What to Do
Medicare Supplement premiums can rise over time. Learn why rates increase, what options you may have, and what to check before changing Medigap coverage..
If your Medicare Supplement premium keeps going up, you may have options. Medigap premiums can increase over time, and the cost of the same lettered plan can vary significantly from one insurance company to another.
Before you cancel or switch anything, it’s important to compare carefully. Outside your one-time Medigap Open Enrollment Period, you may have to answer health questions, and an insurance company may not be required to accept your application unless you have a guaranteed-issue right or additional protections under state law.
Here’s what to check if your Medicare Supplement is getting too expensive.
Why Do Medicare Supplement Premiums Increase?
Medicare Supplement, also called Medigap, is sold by private insurance companies. Each company decides how it prices its policies, and premiums can change over time.
Your cost may depend on factors such as:
The insurance company
Your Medigap plan letter
Where you live
How the company prices its policies
Available discounts
Whether medical underwriting applies
Medicare notes that Medigap premiums typically increase over time and can vary widely between companies.
Compare the Same Medigap Plan Letter
One of the most important things to know about Medicare Supplement plans is that the benefits are standardized. That means a Plan G from one insurance company has the same standardized benefits as Plan G from another company. What can be very different is the premium.
If you currently have Plan G, compare it with other Plan G options. If you have Plan N, compare it with other Plan N options.
A lower premium may be available for essentially the same standardized benefits, depending on your situation and what companies offer in your state.
Can You Switch Medicare Supplement Plans?
Sometimes. You can apply for another Medigap policy, but your ability to switch may depend on when you apply and whether you have a guaranteed-issue right.
In most cases, once your six-month Medigap Open Enrollment Period has ended, federal law does not guarantee that you can switch to any Medigap policy you want. The new insurance company may use medical underwriting when reviewing your application.
Some states provide additional opportunities to change Medigap policies, so your options can vary depending on where you live.
When Is Medicare Supplement Open Enrollment?
Your federal Medigap Open Enrollment Period is generally a one-time six-month period. It begins the first month that you are:
Age 65 or older, and
Enrolled in Medicare Part B
During this period, insurance companies generally cannot deny you a Medigap policy because of your health history. After this period ends, your options may become more limited or more expensive. A very important point: Medigap Open Enrollment does not happen every fall.
Medicare Annual Enrollment Is Different
The Medicare Annual Enrollment Period from October 15 through December 7 is mainly for changes involving Medicare Advantage and Medicare prescription drug coverage. It does not automatically give you a new Medigap Open Enrollment Period.
So if you have a Medicare Supplement and your premium has increased, you do not necessarily need to wait until October to explore another Medigap option.
Don’t Cancel Your Current Medicare Supplement Too Early
If you apply for a new Medigap policy, keep your current policy in place until the new one has been approved and you are sure you want to keep it. Medicare describes a 30-day free-look period in certain switching situations. During that period, you may pay both premiums while deciding whether to keep the new policy.
Canceling your existing Medicare Supplement before the new coverage is secure can leave you with fewer options.
What Should You Compare Before Switching?
A lower premium is important, but it should not be the only thing you look at. Before changing Medicare Supplement coverage, compare:
Your current premium
The new premium
The Medigap plan letter
Any underwriting requirements
Available household or payment discounts
The insurer’s pricing approach
Your eligibility for guaranteed-issue rights
Any additional Medigap protections available in your state
The goal is not simply to find the cheapest premium. It’s to understand whether another option can reduce your cost without creating an unwanted coverage problem.
The Bottom Line
If your Medicare Supplement is getting too expensive, you may have options. Because Medigap plans are standardized, it can be worth comparing the same plan letter with other insurance companies. But switching is not always automatic, especially after your Medigap Open Enrollment Period has ended.
Before canceling anything, make sure you understand the new premium, underwriting requirements, and whether the new policy has been approved.
Want to see whether another Medicare Supplement option may be available? Contact Shawn Ray to review your current plan and compare your options.