Did you buy the wrong Medigap plan? Did you pay too much? Will you be stuck with a policy you will not be able to afford as you age? When you buy the wrong Medigap plan you could pay too much for a lifetime.
Over the past 37 years of working with prospective clients there is one thing that almost always rings true.
Most people buy the wrong Medigap plan, pay too much, and rely too much on their own research which is almost always faulty.
Buying the wrong Medigap plan.
By now you should know that, for most people, paying an extra $250 – $300 a year for plan F doesn’t make good financial sense. As I tell everyone, it is your plan and your money, so choose wisely. This may be the last time you have a choice, so don’t buy the wrong Medigap plan.
Paying too much
If you made your buying decision based on price alone, you probably did buy the wrong Medigap plan.
You never want to overpay for a Medigap plan, and it is true that all plans with the same letter have identical benefits, but the comparison shopping should not stop there.
It is impossible for consumers to view or evaluate overall pricing and underwriting models. That is information only a seasoned agent has access to and can properly evaluate. Renewal policies and past renewal action can often be a clear indication of what is in store for the future. You may have bought a plan that was totally right for the agent selling it, but completely wrong for you.
When a carrier has a history of excessive (15%+) rate increases, or has priced their product in such a way as to attract “bad business, or is paying higher than normal commissions and bonuses to attract new business, you need to steer clear of anything they are offering. Otherwise you will be trapped in a snare of finding a good rate the first year but then you get hosed going forward. Don’t buy the wrong Medigap plan based on the initial price alone.
Rate guarantees
Rate guarantees are nice. Some carriers guarantee their initial rate for the first 12 months. Others for 6 months. Some don’t provide any guarantee and can raise your rates at will.
Most carriers in Georgia offer Medigap policies on an “issue age” basis. That is a good thing. But some use a modified community rating model which provides you with a decent rate initially, but then increases your rate as you age. The most common initial adjustment is at age 68 or 70. By then your health may have changed and you are unable to move to a plan with a more favorable rate. Don’t buy the wrong Medigap plan that will raise your rates as you age.
One last thing about rate guarantees.
The rate is guaranteed but your health isn’t.
Once you get past your initial enrollment period you can change plans at any time . . . as long as you are healthy enough to pass underwriting. I have clients that I wrote on a fully underwritten basis when they were in their 80’s but those situations are rare. I also have clients that could only qualify for a Medigap plan during their initial enrollment period when anyone could qualify.
The bottom line is, don’t get stuck in a plan with a carrier that has a history of giving a good rate initially then beats you up on renewal.
If you want a free, no obligation analysis of your current plan and rate structure, give us a call. We are here to help.
If you did buy the wrong Medigap plan, it may not be too late. You might still be able to change
