Medicare Supplement insurance pays the 20 percent Part B co-insurance, or co-payment for hospital and outpatient services. Aging Medicare beneficiaries are experiencing significant premium increases in their supplement insurance plans, and many on fixedincomes feel trapped and helpless.
A financial advisor in Arizona found our website and sent a client (female, aged 77) to us after she received a 12 percent premium hike for her supplement insurance plan. Our new client has a deluxe plan with no out of pocket co-pays to meet, but the new premium of $265.37 per month created a significant budget problem.
Since the client was in good health, we found the same deluxe supplement plan where she agreed to pay the first $2,180 in co-pays during 2016. Med icare pays first dollar coverage at 80 percent, regardless of the type of supplement insurance used to pay theother 20 percent.
By agreeing to this co-pay arrangement, the new company will charge her a $39.53 per month premium instead of $265.37. She will capture $225.84 per month in savings ($265.37 – $39.53) and a gain of $2,710 in her budget by managing the co-pay risk using the premium savings option. Instead of the supplement insurance company paying the 20% co-pays, the client pays until the $2,180 maximum is reached. Based on her past medical history, it’s unlikely her co-pays will exceed $500 during the year.
If that’s the case, she can expect to keep about $2,200 of the premium savings in her pocket, which could prove to be at least the same amount each year;or more than $20,000 if she lives to her life expectancy of age 87.
Medicare continues to be delivered as a profit-driven commodity just like any other product. We believe it’s all backwards. Instead of offering a product from the beginning with a built in commission for the sales person; we use a fee based, process approach and save our clients millions of dollars.
Seeing the joy on our clients faces after we show them this move, makes it all worthwhile to continue my work as the Medicare coach. Our client can still keep her deluxe supplement plan and save a bundle in premium simply by changing the co-pay arrangement.
