Rates went up again? See if you can change your Medicare Supplement plan.
You can change Medicare Supplement plans anytime you want as long as you’re healthy enough to satisfy the underwriting requirements of the particular insurance company you apply with. So, best case, if you get an unreasonable rate increase one year you can hop over to a competitor’s plan and get the exact same coverage. Worst case, you get sick and have to stay with the plan you have. Hardly a bad thing, but you do lose the ability to shop for a better rate if your health deteriorates.
Supplements are a pure commodity. There’s absolutely no difference between one Plan G and another, or one Plan N and another, aside from the price you pay and the company you pay.
How to change your Medicare Supplement plan
Step 1: figure out if you’re healthy enough to satisfy underwriting requirements
This is the toughest part of the process. Everything after this step is easy-peasy.
Once you’re past your Medicare Supplement Open Enrollment Period, which happens when you first get Medicare Part B, you’ll need to answer health questions in order to change plans. This helps to protect insurance companies against adverse selection. (If you ran an insurance company, you wouldn’t want people to freely hop into your plan just before they rack up a million-dollar hospital bill, would you?).
Thankfully, the process isn’t too painful, especially if you get the help of an insurance broker like us who knows how to navigate it.
If you’re generally healthy, you should be able to pass underwriting. Before moving forward, though, it’s wise to check the list of “no” conditions and “maybe” conditions. Each insurance company’s lists are different, but there are conditions that most of them treat the same.
Some health conditions are ok, as long as they were taken care of more than a few years ago AND you’re no longer receiving treatment for them.
Underwriting will also include checking your medications
Prescribed medications are the arbiter of truth when it comes to your health. Medicare Supplement insurance companies use powerful databases like Milliman to run your history of prescribed medications, and that will uncover anything you may or may not have disclosed.
So, while you may get the all-clear regarding underwriting’s health questions, you’ll still need to pass muster when it comes to the medications you take. Each insurance company has their lists of “yes” and “no” drugs.
Step 2: decide which plan you want to switch to
If you think you can pass underwriting, then it’s time to evaluate the market. The first consideration is which plan you want (F, G, or N). A couple of tips:
- Plan F has become very expensive. You can still buy one if you were Medicare eligible before January 1, 2020, but we don’t recommend it. See below as to why.
- Most people with a Medicare Supplement are on Plan G. If you’re still on Plan F, consider moving to Plan G. The only difference between the plans? With Plan G, you’re responsible for the Medicare Part B deductible every year. It’s only ~$200. You’ll probably save more than that by switching to Plan G.
- Plan N is growing in popularity. Same idea as above: let go of a few plan features in exchange for a lower rate. Biggest difference between Plan G and Plan N? Plan N introduces copays for doctor’s visits (up to $20) and ER visits for which you aren’t admitted to the hospital (up to $50). Plan N also does not cover Medicare Part B excess charges, which are a rare occurrence.
Step 3: find a plan with a favorable monthly rate and apply for it
Once you know which plan you want, it’s time to find the right insurance company. In our view, there are 3 factors to consider here:
- How competitive is the rate?
- What is the company’s history of rate increases?
- Is this company financially sound? Have they been in this business a long time?
Yes, we want to accomplish the primary goal of securing a low rate now, but not at the expense of future rate increases. Even if you’re healthy enough to change plans now, that might change in the future. In fact, it will change in the future. You don’t want to be stuck with a company that had a great rate today but makes up for it later.
The application process is fairly simple. It can be done over the phone with a broker or agent, and it usually takes no more than 30 minutes. The health questions take the most time. The rest is your typical contact info, payment info, etc.
Some companies have automated underwriting and will make a decision as soon as the application is submitted. You’ll usually be approved instantly if you’re on the healthier side.
In all other cases, your application will be manually reviewed by an underwriter. Their decision usually takes a few business days.
Step 4: once you’re approved for the new plan, cancel your current plan
You’ll be notified of your approval (or declination) by either the insurance company or your agent. If you’re approved, your policy will take effect on the date you specified. We recommend starting on the 1st of the next month to avoid administrative hiccups.
If you get approved for the new plan and want to move forward with it, then you can contact your current plan and request that your last day of coverage be the day before your new plan starts.
If you aren’t approved, it’s not a permanent declination. It’s just a “not right now” type of thing. You can try to apply again once any conditions or medications are in the past, or you can try applying with a different insurance company.
And that’s how you successfully change your Medicare Supplement plan.
Get our help to manage this process for you
We’ll guide you through each step. We have access to the entire market of 25+ insurance companies and know the ins-and-outs of the most competitive ones. And if you have health concerns, if there’s a company out there that will accept you, we will find it.
Our services don’t cost you anything. If you end up buying a plan with our help, we’ll earn a small commission. You pay the same rate as if you bought directly through the insurance company.
