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Are Medicare Supplement carriers all the same?

2017-08-09 Charles Bradshaw

Charles Bradshaw

I received a question in an email recently I wanted to share.

The question was as follows:

<Charles, I have decided on Original Medicare and supplemental plan G. I did not fall for all the advertising for Advantage plans that promise a lot and deliver little. I have read in your emails and newsletters about those for profit companies that profit highly from Advantage plans.

I understand that Original Medicare is the same to the subscriber no matter the insurance company. But is there a difference between companies such as Supplemental Plan G through Humana or through Mutual of Omaha, other than price?>

This is a great question and an answer I spend a lot of time discussing with my clients when they are choosing a Medicare Supplement carrier.

Here was my answer:

Your objective when choosing a Medicare Supplement carrier should be to select a carrier with the likeliest rate stability going forward.

The reason for this is simple.

Once someone has been on Medicare Part B for more than 6 months, their ability to change their Medicare Supplement requires them to have fairly good health.

If a carrier has an unusually high rate increase, it will cause healthy policy holders to look around for a less expensive policy. This migration of healthy policy holders to other plans will mean the percentage of policy holders with health problems in the original plan will increase.

This will cause the ratio of health care costs per person to increase which will lead to another rate increase and the cycle starts again.

There are two key variables that predict rate stability.

The first variable is how long a carrier had been providing Medicare Supplements.

The reason this is a predictive variable is Medicare Supplement policies cover people from age 65 until their 90s and even into their 100s. However, the health care costs are very different for people in their 80s and 90s than in their 60s and 70s.

For a carrier to have acceptable rate stability, they must be able to accurately forecast what their claims will be.

Carriers are able to much more reliably predict their claims – and thereby set their rates at a level to cover those claims – when they have sufficient claims experience from all ages of policyholders.

Conversely, many newer carriers – who have primarily younger policyholders – will set their rates artificially low in order to attract business but, in doing so, subject their policyholders to high rate increases in the future when premiums collected may not be sufficient to pay claims as policyholders age.

You are likely to pay much less long term with a Medicare Supplement carrier that has stable rates that do not cause healthy customers to leave in order to avoid high premium increases.

The second variable that is a predictor of rate stability is the size of the policy holder base.

A carrier with a large number of policy holders is better able to absorb higher than projected health care costs among segments of its customer base than a carrier with a smaller number of customers.

This variable is also related to the first variable because the carrier with a large policy holder base is going to have a more diversified base in terms of age than a smaller, and likely newer, carrier.

Mutual of Omaha has been providing Medicare Supplements since 1966 when Medicare began. To put this in perspective their first Medicare Supplement policy holder was former President Harry Truman.

Mutual of Omaha has more than 1.5 million Medicare Supplement policy holders. As a comparison, according to their 2016 Annual Report Humana only had 219 thousand Medicare Supplement policy holders.

With the exception of a handful of states, I almost always recommend Mutual of Omaha.

In addition to the variables described above that lead to rate stability, Mutual in most states offers a 12 percent discount to policy holders who are married or live with someone aged 60 or older even if their spouse or roommate does not have a Medicare Supplement with Mutual of Omaha.

And based on the experience of the many clients I have with all Medicare Supplement carriers, the customer service with Mutual of Omaha is unsurpassed by any other carrier.

You can also go online to get a quote for a Mutual of Omaha Medicare Supplement policy and even apply online by clicking the link below.

Remember, Plan G is the plan I recommend.

Click here to apply online

I would appreciate the chance to help you with your Medicare. Simply click on the link below to schedule a free, no-obligation Medicare consultation.

Click here to schedule your free, no-obligation Medicare consultation

You can also call me at 888-549-1110 or email me at charlesbradshaw@medicareanswercenter.com

I look forward to talking with you soon.

p.s. If you know of someone who needs help with their Medicare, please share this with them.

Call Centers and Medicare

2017-08-09 Charles Bradshaw

Charles Bradshaw

As you probably already know, when you are about to reach the age of 65 and become eligible for Medicare, you are bombarded with junk mail, unwanted phone calls and even unsolicited knocks on your door by strangers desperate to enroll you in whatever Medicare plan someone is paying them to sell you.

None of these marketing ploys do anything to help you understand how Medicare works and what your options are with Medicare. They do not help you make an informed Medicare choice.

The most frustrating of these unwanted intrusions into your privacy are the non-stop phone calls you receive from call centers.

These call centers are usually staffed with inexperienced, lightly or poorly-trained 20 somethings who only make money by convincing a lot of people to blindly enroll over the phone in the Medicare plan they are paid to sell.

These are not bad kids and, in time, some may become effective Medicare consultants.

However, I am 53 years old and have helped thousands of people with their Medicare. I take what I do very seriously and learn something new about Medicare every week.

When I was in my 20s I did not have the life experience to recommend to someone approaching 65 years old how they should make critically important decisions affecting their access to health care and financial well-being for the rest of their life.

Like me 30 years ago, these kids in their 20s working in call centers rarely have the life experience and Medicare experience and knowledge necessary to be an asset to you in making your Medicare choices. Most have been working in these call centers less than a year and most will be doing something else a year from now.

Almost every day I talk to someone who has been given bad information from a call center employee.

Many call center employees tell people who are still working and have health insurance through their employer that they will be penalized if they do not enroll in Medicare Parts A and B at age 65.

This is wrong and acting on such bad information can cost the person turning 65 thousands of dollars in unnecessary costs.

I have heard from many other people on Medicare that they do not have a Medicare Part D drug plan because someone in a call center told them they did not need one if they were not taking any medications. This advice is terribly wrong and can force the person on Medicare to have to pay the full price for expensive drugs they may be prescribed as well as pay a penalty the rest of their life.

A lot of times I do not believe giving out such bad information is deliberate or malicious. It seems these call center employees are trained to say whatever is most likely to lead to a sale and they often do not understand why what they are trying to sell is the absolutely wrong choice for the person their computer just dialed.

When you are about to go on Medicare, your job is to fully learn how Medicare works and what your options are with Medicare. The Medicare choices you make when turning 65 can be permanent and the wrong choice can negatively impact your access to health care and finances the rest of your life.

It is critical that anyone you trust with helping you with Medicare be fully knowledgeable about Medicare, experienced and focused on helping you understand Medicare rather than meeting their daily call center sales quota.

I would appreciate the chance to help you with your Medicare. Simply click on the link below to schedule a free, no-obligation Medicare consultation.

Simply click the following link to schedule a free, no-obligation 30-minute Medicare consultation.

Click here to schedule your free, no-obligation Medicare consultation

You can also call me at 888-549-1110 or email me at charlesbradshaw@medicareanswercenter.com

I look forward to talking with you soon.

p.s. If you know of someone who needs help with their Medicare, please share this with them.

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