How to Avoid a Medicare Supplement Policy with Dramatic Annual Rate Increases

Age-Attained Rating

Medicare supplement insurance companies set their own monthly premiums, so costs will vary from company to company.  Most base their premium on your age at the time the policy is signed or issued and where you reside.  Invariably, you’ll receive a small rate increase each year as you age, often less than $10.00 a month.

The insurer also has the option to increase your premium annually due to other factors like inflation.  Most major carriers don’t have dramatic annual rate increases; however, be wary of a few insurers that initially offer an attractive rate but dramatically increase it the next year. 

How can you avoid policies that have dramatic rate increases?  Seek an agent that represents multiple major insurance carriers and understands historical premium rate trends.

The insurance companies that have dramatic rate increases are often promoted by aggressive agents.  These agents often solicit Medicare Supplement policies by phone or door-to-door.  If solicited in this way ask the agent what rate increases you can expect in the coming years?  Ask if they represent more than one Medicare Supplement insurer?  If they can’t answer or only represent one company, consider consulting a broker that represents multiple insurance companies.  For example, Margy Wenham Insurance represents over 10 major carriers and has over 25 years of experience studying Medicare Supplement premium rate trends.

 

Do you Qualify for a Premium Discount?

Many Medicare Supplement insurers offers discounts on their premium.  Most offer a 5-12% discount if you have a spouse or domestic partner with a Medicare Supplement plan with that company as well.  Others will provide a 5-7% discount if you have someone else (anyone) residing with you.  Finally, many insurers will give a small $2.00 or 1-2% discount month if your premium is payed automatically out of a bank account monthly.  If you are not sure if you are getting or entitled to a discount, don’t lose out on this potential savings.  Ask your agent.  They should know.

Comments

  1. Emily WilsonFebruary 26, 2021 at 2:13 AM

    Wonderful post! The tips that you have shared about avoiding a medicare supplement policy with dramatic annual rate increases might come in handy for a lot of people. On the other hand, I see many S corporations leveraging 2 shareholder health insurance for easily claiming deductions of premium on Form 1040. I am glad to come across such policies that help common people & large companies.

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