Once you’ve chosen your Medicare program: Original Medicare or Medicare Advantage, you’re not done.
Medicare only pays for 80 percent of your approved medical costs, so people on Original Medicare should get a supplement plan to pay for the remaining 20 percent.
In most states, supplement plans have a strict insurability rule, so you must pick the right supplement plan when you first join Medicare because you may only have one chance.
The supplement insurability rule in most states gives you a 6-month window when you first join Medicare Part B to join a supplement plan without having to provide any health history.
That means that in the first six months, you can join any plan, and they cannot charge you more because of existing health conditions. However, once that window passes, the rules completely change.
After that six-month window insurance companies can ask you for your health situation and history. As a result, insurance companies can deny you coverage or charge you more because of your health.
For this reason, many people aren’t able to change supplement plans later on. Since your supplement decision is critical, let’s talk about the steps to take to get the right plan.
There are individual states which have more relaxed insurability rules, including Connecticut, Maine, Massachusetts, New York, and Washington state.
The rules are all a little different, but if you are in these states, you have more flexibility to switch supplement plans later. But for the other states, you have very standard insurability rules.
The first step to picking the right supplement plan is to decide which letter fits you best.
The letters range from A to N. Different letters cover different things and fit people for various reasons.
Now, most states have supplement plans that reflect these letters, but three states (Massachusetts, Minnesota, and Wisconsin) have completely different supplement plans, so please be aware of this.
For people in the other 47 states, there will be a letter that fits you best, but the plan you pick depends on your unique situation.
Factors include:
- Where you live
- Your health care situation
- What you can afford to pay
- How much risk you would like to have
People who have a Modified Adjusted Gross Income (MAGI) of more than $85k as an individual or $170k as a couple are the ones who can usually gain the most from some of the lower commission supplement plans that are very rarely advertised or talked about by insurance companies.
We find that insurance companies rarely mention these types of plans because they don’t pay out as much money as other plans.
Supplement plans differ based on what they cover, and they also vary based on their premium. Premiums usually range from $30 a month to $180 a month in most states. States with more relaxed insurability rules or other unique Medicare rules can be twice as expensive for the same coverage.
When you go to an insurance company, they will likely show you a plan F, G, or N. These are the plans that make them the most money via commissions. I’m not saying that one of those letters would not fit you, but understand why the insurance company is showing you those plans.
Below are some key factors that impact the best supplement letter for your situation:
- What state do you rise?
- What are your health concerns?
- What is your income?
- Do you prefer lower premiums in exchange for taking on slightly more risk?
- Do you spend time in multiple states, or travel across states frequently?
- Do you own homes in multiple states?
- Do you plan on moving in the near future?
If the insurance company isn’t taking these factors into account or walking you through how it’ impacts your supplement plan, they nor you have the necessary information to make the right decision.
It’s critical to get very clear on which letter fits you best before you look at insurance company details.
If you are trying to make your Medicare decision and want help, join our free Medicare workshop “How to Make The Right Medicare Decision Without Wasting Time On Research Or Paperwork”. Once you join the workshop, be sure to ask your questions so I can answer them! Sign up for our next webinar by CLICKING HERE.
