My Medicare Supplement Premium Keeps Going Up in Florida — Should I Switch Companies?
When a Medigap premium increases, it may be worth comparing carriers — but switching isn’t always as simple as finding a cheaper rate.
Question:
I live in Florida and have had the same Medicare Supplement policy
for several years. When I originally bought it, the premium seemed
reasonable, but it keeps increasing.
I’m happy with Original Medicare and don’t necessarily want to change
the type of coverage I have. I’m just wondering if I’m paying too much
for my supplement.
If another insurance company offers the same Medigap plan for less,
should I switch? Or could changing companies create other problems?
How do I know when a Medicare Supplement rate increase is a reason
to start shopping?
Answer: A Rate Increase Is a Good Reason to Review Your Options — But Don’t Cancel Anything Yet
If your Medicare Supplement premium has increased significantly,
there is nothing wrong with seeing what other insurance companies
are charging.
In fact, one of the advantages of standardized Medicare Supplement
insurance is that it can make carrier comparisons easier.
If you currently have a standardized Plan G, for example, the core
standardized benefits of Plan G are the same regardless of which
insurance company issues the policy.
The premium, however, can be very different.
The Plan G benefits may be standardized.
The price you pay for Plan G is not.
Why Do Medicare Supplement Premiums Increase in Florida?
A Medicare Supplement premium increase doesn’t necessarily mean that
your insurance company singled you out because you used your coverage.
Florida Medicare Supplement insurers may adjust premiums because of
factors such as inflation, the overall claims experience of the policy
group and changes in Medicare benefits.
Florida’s Office of Insurance Regulation must approve Medicare Supplement
rate increases before they take effect.
Florida also requires insurers to provide policyholders advance notice
when an approved premium change will affect their coverage.
Important for Florida Residents: Medigap Uses Issue-Age Pricing
Florida Medicare Supplement policies are required to be sold using
issue-age pricing.
That means the premium on your existing policy does not increase
simply because you celebrated another birthday.
However, your premium can still increase because of an approved
rate increase affecting the policy class.
There is another important consideration if you decide to change companies.
When you apply for a new Medicare Supplement policy with another
insurer, the new company’s rate may be based on your age when you
apply for that new policy.
Can Two Companies Really Charge Different Prices for the Same Plan G?
Yes.
This is one of the biggest reasons Medicare Supplement policies
should periodically be reviewed.
Company A and Company B may both offer standardized Plan G coverage,
yet their monthly premiums can be substantially different.
Insurers may also offer different household discounts or other
permitted premium discounts.
That’s why it can be useful to compare the same plan letter across
several insurance companies rather than assuming your current carrier
is still competitively priced.
But Can I Switch Medicare Supplement Companies Whenever I Want?
You can apply for another Medicare Supplement policy, but this is where
people need to be careful.
Your initial Medigap Open Enrollment Period generally lasts for six months,
beginning when you are age 65 or older and enrolled in Medicare Part B.
During that protected period, an insurer generally cannot deny you a
Medigap policy because of your health.
After that period ends, unless you have a specific guaranteed-issue right,
the insurance company you’re applying to may be allowed to use
medical underwriting.
That means your health history may affect whether the new company is
willing to issue the policy and, depending on the circumstances,
what premium is available.
Don’t Cancel Your Current Medigap Policy First
This is extremely important.
Finding a cheaper rate online does not mean you should immediately
cancel your existing Medicare Supplement.
Apply for the new coverage first and determine whether the new insurance
company will approve you.
You generally should keep your current policy until the replacement
policy has been approved, issued and you have decided that you want
to keep it.
What Is the Medigap 30-Day Free Look?
Medicare provides an important protection when switching Medigap policies.
Once you receive the new Medicare Supplement policy, you generally have
a 30-day free-look period to decide whether you want
to keep it.
During that period, you may temporarily have both policies and therefore
may need to pay premiums for both.
That short overlap can provide additional protection while you make sure
the replacement policy is the one you want.
Should I Switch Just Because Another Plan G Is $20 Cheaper?
Maybe — but don’t look only at this month’s premium.
Suppose another company saves you $20 per month.
That’s $240 per year.
If another carrier saves you $60 per month, that’s $720 per year.
At some point, the difference becomes significant enough that it
deserves a closer look.
But before switching, compare more than today’s rate.
What Should I Compare Between Medicare Supplement Companies?
- Your actual monthly premium
- The same standardized plan letter —
compare Plan G with Plan G, for example - Household or other available discounts
- The company’s recent rate history
- How long the current policy block has been available
- The insurer’s financial strength
- Whether medical underwriting is required
- Your new issue age if you change carriers
- Customer service and administrative experience
Ask About Rate History — But Don’t Try to Predict the Future
Looking at an insurance company’s previous premium increases can be useful,
but it cannot tell you exactly what will happen next year.
A company that has had relatively small increases in the past could
have a larger increase in the future.
Likewise, a carrier that recently had a significant adjustment will not
necessarily repeat that same increase every year.
Rate history should therefore be one factor in the decision, not the
only factor.
What If My Health Has Changed Since I First Bought My Supplement?
This is one of the biggest reasons not to make a decision based only
on price.
Someone who purchased Plan G at age 65 while very healthy may have
developed health conditions several years later.
That person may be perfectly happy with their current policy, but a new
company may evaluate their medical history when they apply for replacement
coverage outside a protected enrollment or guaranteed-issue period.
Before assuming that you can save money by changing carriers, determine
whether you are likely to qualify for the new policy.
What If I’m Healthy?
If you’re relatively healthy and your existing Medicare Supplement
premium has climbed substantially, that may be an especially good time
to compare your options.
You may discover that your current policy is still competitive.
Or you may find another insurer offering the same standardized plan
at a meaningfully lower premium.
The important point is to find out before assuming that you have to
accept every premium increase indefinitely.
Should I Change From Plan G to Plan N?
That’s a different decision from simply changing Plan G insurance companies.
Moving from one Plan G carrier to another is primarily a comparison
of insurers and premiums because the standardized Plan G benefits
are the same.
Moving from Plan G to Plan N changes the benefits and cost-sharing structure.
Plan N can have a lower premium, but it may include certain office visit
and emergency room copayments and does not cover Medicare Part B
excess charges.
So first decide whether you want a different insurance company or
whether you actually want a different Medigap plan.
What About Florida Retirees Who Travel?
Many Florida residents travel frequently or spend part of the year
in another state.
With standardized Medicare Supplement coverage used alongside Original
Medicare, there generally isn’t the same local provider-network structure
associated with many Medicare Advantage plans.
Original Medicare beneficiaries can generally see healthcare providers
throughout the United States who accept Medicare.
For some Florida retirees, maintaining that flexibility is an important
reason they want to keep Medicare Supplement coverage even when premiums rise.
The Bottom Line
A Medicare Supplement premium increase does not automatically mean
you should switch insurance companies.
But it does give you a good reason to review your coverage.
The question isn’t simply, “Did my premium increase?”
The better question is:
“Is my current Medicare Supplement still competitively priced
for the coverage I want?”
If the answer is yes, staying where you are may make perfect sense.
If the answer is no — and you qualify for replacement coverage —
comparing other insurers could potentially save you money without
changing your standardized plan benefits.
Has Your Medicare Supplement Premium Increased in Florida?
Before accepting another premium increase, see whether your current
Medicare Supplement is still competitively priced.
Mintco Financial can help you compare available Medicare Supplement
carriers and rates in Florida.
Medicare Disclosure:
Mintco Financial is not connected with or endorsed by the U.S.
government or the federal Medicare program.
Medicare Supplement insurance, also known as Medigap, is private
insurance designed to supplement Original Medicare. Standardized
Medigap plan benefits are established by federal and state law.
Premiums, discounts, underwriting requirements and availability
may vary by insurer and applicant.
Florida Medicare Supplement policies are issued using issue-age
rating. Premiums may still change because of approved class-wide
rate adjustments, inflation, claims experience, changes in Medicare
benefits or other permitted factors.
Outside a Medigap Open Enrollment Period or other applicable
guaranteed-issue right, medical underwriting may apply when
applying for replacement Medicare Supplement coverage.
Never cancel existing Medicare Supplement coverage solely because
you have received a lower quote. Confirm that replacement coverage
has been approved, review the effective date, and understand the
applicable free-look rights before terminating existing coverage.
Medicare Supplement insurance is not Medicare Advantage and does
not include prescription drug coverage in modern standardized
Medigap policies. Separate Medicare Part D coverage may be needed
for outpatient prescription drugs.
Insurance premiums and future rate changes cannot be guaranteed.
Historical rate changes do not predict future premium adjustments.
This material is provided for educational purposes only and is not
legal, tax or medical advice. For official Medicare information,
visit Medicare.gov or call 1-800-MEDICARE.