A lot of people with Medicare Supplement (aka Medigap) policies are getting renewal notices with large rate increases. Many are wondering why this is happening.
Supplements tend to have annual rate increases. In general, they are modest increases that take into consideration the increased risk to the carrier. That is primarily comprised of increasing medical inflation and increased risk due to a beneficiary’s higher age. This year has been different with significantly larger than normal rate increases. I recently attended a webinar on this topic to better understand what is happening to the industry. In short, we can blame it on Covid. During Covid, many of us avoided going to the doctor primarily to avoid contact with people in a frantic environment of fear. We even delayed getting medical treatment we knew we needed, to avoid the risk of contact. Then, after the height of Covid, we started going back to the doctor. This “pent up demand” increased medical utilization, resulting in costs that were much higher than normal. As a result, insurers needed to increase rates much more than normal this year.
The worst part is there isn’t much you can do about it. As most carriers are having to implement these increases, it is difficult to improve on your rate situation. Over the last few years, I have been placing my Supplement clients with insurers who have a history of stable rate increases. This alleviates the need to “shop around”. Even if there is an insurer who has a better rate (even if temporary), it is difficult to make the switch unless one is very healthy and can pass medical underwriting (in most states). The other choice is to switch to a completely different type of coverage called Medicare Advantage (aka Part C). This can normally only be done during Medicare’s annual enrollment period in the Fall.
Feel free to contact me if you have questions or need assistance with your choices in Medicare. I don’t charge any fees nor increase your cost.
Based in the Richmond, Va area, David Higgs of Choices In Medicare, LLC specializes in helping seniors transition to Medicare. He can be reached at email: dwhiggs@gmail.com or go to website: www.ChoicesInMedicare.com
We do not offer every plan available in your area. Currently we represent Anthem, Aetna, Humana, UnitedHealthcare, Wellcare and SilverScript organizations which offer 67 Plans in your area (Richmond Metro 2024). Please contact Medicare.gov or 1-800-MEDICARE , or your local State Health Insurance Program (SHIP) to get information on all of your options.