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Why your rates are increasing and what you can do about it.

Published: August 24, 2021

Category: Educational, Medicare Healthcare

Medicare Supplements, also known as Medigap, are subjective to having their rates change. In fact, if you’ve had a Medigap plan for at least a year, it’s likely that your premium has occasionally increased. If this stresses you out, don’t let it. It happens to everyone at some point.

The short answer to the question of, “Are your Medicare Supplements rates going up?” is yes. They are. But if you want to know why, and what you can do to prevent your rates from becoming crippling, then you don’t need to look any further.

This article will help explain why your rates are increasing, how to know they are going up, and what you can do about it. Let’s get started.

 

Why are rates increasing

There are a few reasons why your rates could be increasing. The first reasoning lies within the cost of healthcare as a whole. Like many other insurance services, healthcare can undergo inflation to its prices. In fact, it can even go through a deflation of its pricing, but that is a rare occurrence. So, as this change in pricing occurs, insurance companies have to mirror that in what they offer.

This can be mirrored through the concept known as “community-based pricing,” meaning that the price of your Medicare Supplement’s rates increases on account of inflation, utilization, and tobacco usage. A community-based pricing plan will have you spending the same amount on your rates as someone who is older than you, as well as someone who is younger than you are.

The second reasoning has to do with other things in relation to your demographic, such as where you live, what gender you are, how you pay for your rates and more. For example, depending on the state you live in, your rates could be different from a friend or relative who is living in a separate state. And because women tend to be healthier than men, it’s possible that women’s rates will be slightly less expensive than men. However, there are still other things that will impact what you will owe.

The third reasoning has to do with your age, it lets you know whether your rates are going up. Read further below to see how.

 

How to know if rates are going up

There is one sure-fire way to find out whether your rates are going up, and all it takes is knowing how old you are. A lot of Medicare Supplement plans are sold on what is called an “attained age pricing structure.” Essentially, it means that as your age increases, so will your rates.

So, basically, you can expect your rates to go up as you get older.

You can also expect your rates to be higher if you waited a longer time to sign up for a Medigap policy. For example, someone who has signed up for a Medigap policy at 65 will have lower rates than someone who has signed up at the age of 70. This is a concept known as “issue-age pricing,” in which the cost of your rates is based upon the age you are when you sign up.

However, you must keep in mind that policy plans will differ depending on the state you live in. Research your state’s laws online, or speak to a specialized agent, about Medigap pricing to see how you are charged for your policy.

 

How this can affect you

The great thing about Medicare Supplement policies is that it is designed to help you pay for the gap in coverage between your Medicare plan and prescription drug costs. This is especially helpful for those who would struggle to pay for that gap. But what happens if the increase in rates begin to get to be too much?

Some people are finding themselves in situations in which paying for Medigap premiums are becoming more difficult as the years go by. In these situations, it’s worth sitting down and looking over Medicare Supplements.

If you are in this situation, then there are some things you can do to reduce your costs. However, it is also recommended that you speak with your agent to determine what it is that you can do.

 

What you can do

Although it is inevitable that your rates will increase, that doesn’t mean you can’t do anything about it. One thing that you can do is switch Medigap policies. This is a common solution for many Americans who are looking to lower their Medicare Supplement premiums. However, it is important to know that once you switch to a new policy, you lose your old one and you cannot get it back.

You may also want to consider switching to a Medicare Advantage plan. The reasoning behind this could fall within both your health and your affordability. Because Medigap is linked to Medicare, you can sign up for a policy, or switch to a new one, during the annual enrollment period. However, in order to switch your Medigap policy, you will have to go through medical underwriting. This basically means that your medical history will be evaluated in order to ensure that you are actually able to switch. But let’s say that your health is deteriorating, and your medical underwriting is not approved for switching. If you can no longer afford your current Medigap policy, then it may just be time to switch to a Medicare Advantage plan, also known as Part C. However, this something you should think heavily on before switching. You will want to speak with an agent, who will provide you with advice, to make this is something you should do.

However, many Americans are happy with the Medicare Supplement plan that they already have, and they’re not looking to switch anytime soon. If that applies to you, then there are still options you have to manage these increasing costs:

  • Switch carriers. One thing to consider is simply switching Medicare Supplement carriers, which is something you can do while maintaining the same plan. Contact different agencies to see what their rates for Medigap are. If they’re significantly less than your current carrier, it may be worth switching over.However, it is important to know that there will always be uncertainty about how your carrier will increase its rates throughout the years. Increases to your Medicare Supplement rates are inevitable, so switching carriers with hopes that your rates will never raise again would be an act in futility.
  • Household discounts. These are a way to keep your plan and lower your rates at the same time. However, it requires at least one other person to be living in your household who is also eligible for Medigap. If you meet this criterion, you will want to know how you can utilize household discounts to lower your rates.Household discounts are Medicap deals in which your monthly Medicare Supplement rates will be discounted whenever there are two people enrolled within the same Medigap insurance agency living in a singular address. The percentage that would be discounted will not be the same for everyone, however. How much you receive off will be determined on your location (or state) and the Medicare Supplement carrier you are using.

    You will want to get in contact with your carrier to determine whether you qualify for a Household Discount or contact a local agent to objectively determine the benefits of this discount.

 

With inflation, age and other factors determining what your Medicare Supplement rates will be, you can find yourself in a confusing and overwhelming situation. Luckily, with the help of The Best Senior Services (TBSS), this doesn’t have to be the case. With TBSS, you have a guaranteed place to go if you are looking to learn more about Medicare and other financial services. In fact, if you have more questions that are based off of your specific needs, you can be connected with a local, licensed agent who will take the time to answer your concerns. You can visit our website or call us at 855.979.8277 to get started with us today.

 


Why did my Medicare Supplement Increase