Advantages of Medicare Supplement Insurance

Typically, comparing one insurance policy to another is a nightmare. With the exception of Medigap policies, no two policies are exactly the same. There’s always some wrinkle, big or small, that’s different. So shopping around to compare prices is almost impossible.

That’s advantage number one of Medigap. In nearly all states, nearly all the companies that sell a particular Medigap plan offer exactly the same benefits, bells and whistles as every other company that offers that plan.

Don’t be surprised, but the fact is you have the U.S. Congress to thank for that: Many years ago, Congress standardized and simplified Medigap policies. So today, you have a menu of 10 different plans to choose from, starting with Plan A, which is the bare bones, all the way up through Plan N, which is top of the line.

Two other advantages …

Advantage #2. 
In all states, there is an open enrollment period that lasts for six months. It begins on the first day of the month in which you meet these two simple requirements: You are 65 or older. And you’re enrolled in Medicare Part B.

During this open enrollment period, the insurer cannot deny you coverage for any reason. Not even for pre-existing conditions. (Some insurers might, however, charge you a higher premium for the pre-existing condition or other health and lifestyle factors.)

Advantage #3. 
Once you purchase a policy, Medigap policies are guaranteed renewable. An insurance company cannot refuse to renew your policy.

The only exceptions: They can cancel or refuse to renew if you’ve made material misrepresentations on your application. Or, if you don’t pay the premiums. Needless to say, be sure to avoid both situations.

Decide Which Medigap Plan Is Best For You

Here are some of the factors to consider …

Factor #1.  Your income.  Even if you are already enrolled in Medicare and are in good health now, if you happen to suffer a major accident, or get a serious illness, you could find yourself owing tens if not hundreds of thousands of dollars. For seniors living on a fixed income or with only moderate retirement savings, that is a VERY scary thought.

Factor #2. Your family history. Is it pretty common in your family for folks to live a long life beyond the time they can typically care for themselves?

If so, consider Medigap Plan C which covers Medicare Part A hospital deductible and pays co-payments under Medicare for up to 100 days of skilled nursing facility care.

Factor #3. Foreign Travel. If you travel overseas extensively, you can get coverage for emergency care in a foreign country with Plan C through G, M and N. (In some states, the rules are a bit different: In Massachusetts and Minnesota foreign travel coverage can be found in the Supplement 1 Plan and the Basic Medigap Coverage, respectively. In Wisconsin, a Foreign Travel rider can be added.)

Most popular plans overall: With the advantages I just cited, you’d think one of the plans I just told you about would be the most popular. But that’s not the case.

The most popular plans are those that offer the best combination of both benefits and price. And among those …

• Plan F: tops them all. In fact, in 2016, 58.6% of enrollees chose this plan.

• Plan G: is a distant second in popularity, with 18.2% of the enrollees.

Personally, I agree with those 58% of Medigap enrollees who like Plan F the best. It includes the widest range of coverage. And the premiums are not outrageous.
In other words, Plan F provides a good balance between what you get and what you pay. However, Plan F will be eliminated in 2020.

Find the Strongest Insurance Companies

Some people think that insurance companies are always safe. “Heck,” they ask, “isn’t safety their job! To protect our safety, don’t they have to be safe themselves?”

Sure, that makes logical sense. But unfortunately, logic is not always what makes the world turn, even in the realm of insurance.

What happened in the late 1980s and early 1990s is a case in point. We saw such massive failures that close to six million Americans were caught in failed insurance companies. Worse, the companies’ obligations were so large, even
the state guarantee associations didn’t have enough money to reimburse policyholders.

The primary victims were two million people that had “cash value policies,” who used their policies as a place to park their savings or investments.

Then, a moratorium was imposed on cash withdrawals and policy loans. So they were mostly locked out of their money for months.

But anyone with any kind of policy in a failed company faces other issues: They risk a lot of inconvenience and even major disruptions in their health and financial planning. That’s one reason you need to favor stronger companies whenever possible.

The other reason is that, even in the absence of financial difficulties, stronger insurance companies typically do a better job of paying their claims promptly. A stronger company is less likely to subject you to extra paperwork, excuses, nitpicking and even automatic denials that insurers often use to wear you down, reduce the amount of money they have to pay or hold on to your cash as long as they can.

How do you find the strongest companies?

That’s what Weiss Ratings does for investors and consumers every day.

My point is: You can rely the Weiss Ratings to protect you from weak companies. And our Ratings are very clear:
A = Excellent
B = Good
C = Fair
D = Weak
E = Very weak

We also use a plus or minus sign to indicate the upper or lower third of each rating grade. 

My recommendation: For Medigap insurance, favor companies with a grade of Weiss Rating of B- or higher.

And if you’re only choices for the sake of buying affordable coverage has a lower Weiss Rating, just be fully aware that you’re giving up safety for the sake of saving some money.

How can you determine the Weiss Ratings of each company that offers Medigap policies?

Simple: You can get a customized Medigap Report, to help you find the safest companies that can suit your specific needs, and in the process, you can save hundreds if not thousands of dollars on your Medicare Supplement Policy.