$7000 Premium Savings with Medigap Moves:
Five (Medicare Coach) members saved a total of $7,000 in premium this past week by making the Medicare Supplement High Deductible move.
Case # 1
Age 70 male was paying $1,680 and his age 67 spouse was paying $1,475 for a combined total annual premium of $3,155. Both had Medicare Supplement Plan F. They are in a position to handle a maximum deductible of $2000 each, so we moved both to High Deductible Plan F coverage, and they will save a total of $2,748 in premium for 2010.
Since their maximum out of pocket worst case scenario risk is $2,000 each or $4000, their actual deductibles will average only $626 each because they now captured the $2,748 in premium savings and have it available to pay thosel 20% co-pays for routine doctor visits, or other medical procedures. Here’s the math: $4000 maximum co-pay risk minus $2,748 premium savings= $1252 of total risk divided by 2= $625 each.
Case # 2
An 81 year old healthy client with no major medical issues called to tell me she is dropping the Long-term care insurance policy that I designed for her because her premium will increase from $99.79 per month to $117.75 (a 15% increase). I met with her yesterday and was able to rescue her policy with the High Deductible Supplement move.
I told her that she’s had the LTC policy in force for ten years and has paid $11,975 in premiums, and has more than $115,000 in benefits available to her if she experiences a long-term care episode. Since a long-term care episode poses a much greater danger to her than Medicare Supplement co-pays we made this move. Apply for a Medicare Plan F high deductible policy for a new premium of $24.09 per month.
When approved, drop the existing Plan F which costs her $229.79 per month. Take the annual premium savings of $2,757, then pay the annual High Deductible premium of $289, which leaves her $2,468 in savings. Then pay the new LTC monthly premium of $117.75 ($1,413 per yr.) and she still has $1,055 left over to handle her Medicare co-pays.
In essence, she only has $945 of co-pay worst case scenario risk $2,000 risk minus $1,055 saving = $945. But, she has more than $2000 in savings to handle it. If she continues to stay healthy and only sees her doctor for check ups, she’ll continue to accrue an annual premium savings, and increase her savings account each year, and handle the LTC premium increase at the same time… without dropping her policy or losing the the $115,000 LTC benefit available to her or the $11,975 in cumulative premiums already paid these past ten years.
Case # 3
A client couple ages 72/76 called to tell me their current Plan F (High deductible) premiums will jump to a total of $2022 per year which was a considerable jump from the time they purchased these policies issued in 2006. We found them a new company with the exact same Plan F for annual premiums of $509. This move just saved them $1,513 in annual premium.
As you can see by these examples, the Medicare Coach program focus’s on process not product. Here’s the criteria to see if you or a loved one might qualify for the Medicare supplement High deductible move:
- Age 70+ good health, no current treatment for serious medical conditions.
- Paying $150 or more per month for a Medicare Supplement premium.
- Willing to self insure minimal risk co-pays up to $250-$500 per year.
Remember when the annual premium savings of a Medicare Supplement high deductible plan is deducted from the $2,000 maximum calendar year risk deductible, your risk is reduced by the amount of the savings.
