I received an email from Charles in Charlottesville, Virginia last week.
Charles was a very smart guy who had throughly researched his Medicare Supplement options.
In the email, he told me he had read my blogs in which I said I usually recommend Medicare Supplements from Mutual of Omaha . However, in looking up premiums from different carriers in his area, he noticed that Anthem Blue Cross was $23.77 less than Mutual of Omaha.
At first glance, Anthem Blue Cross was $90.00 per month for a Plan G Medicare Supplement and Mutual of Omaha was $113.77.
My initial reaction was to take a closer look and see if this was a real cost savings.
From my experience helping people with Medicare all over the country, I have seen several situations in which BlueCross had pulled some gimmicks to make their pricing appear better than it really was or had promoted Medicare Supplement types that had potential gaps in their coverage.
As an example, BlueCross Blue Shield in Alabama promotes a Plan B Medicare Supplement instead of Plan G. The major difference with Plan B is it does not cover your costs if you go into a Skilled Nursing Facility for rehabilitation while Plan G covers all costs other than Medicare once-a-year Part B deductible.
This lack of full coverage can cost you more than $10,000 if you have a prolonged stay in a rehabilitation facility.
By using this sleight of hand, BCBS of Alabama offers rates that are comparable to carriers such as Mutual of Omaha Plan G but offers far less coverage.
The most frustrating part of this is the typical person selecting this plan will not realize their coverage is not complete until they are actually in a skilled nursing facility and find out they are not covered and will have to pay thousands of dollars out of their pocket.
Similarly, BlueCross BlueShield in Florida – Florida Blue – promotes a “Medicare Select” plan that has at first glance attractive premiums. Unfortunately, unlike Mutual of Omaha Plan G, Florida Blue’s Medicare Select plan only allows you to receive care at certain hospitals.
This can be a huge problem if you have a serious health issue and need to receive care at the hospital you believe has the most expertise and experience for your specific health condition.
By being forced to receive care at a hospital different than the one you believe is best for you, you may have a lower chance for the best health outcome.
So I was a little skeptical of the Anthem BlueCross pricing in Virginia.
When I went to their website, it took me a couple of minutes but I found the answer.
To get the answer I had to click around their website until I found their “Outline of Coverage.” The “Outline of Coverage” is a document that shows pricing by age.
Virginia is an “Attained Age” state which means people with Medicare Supplements from Virginia pay a premium which is based on the age to which they have reached.
Most states are “Attained Age” states though some states have pricing based on the age at which you enroll in the plan and other states have the same pricing for everyone regardless of age.
In an Attained Age state such as Virginia, it is critical to see how much premiums increase every year as you get older.
In Virginia, Anthem BlueCross’ premiums increase sharply every year. By age 70, the premium increases from $90 per month to $120 per month.
Mutual of Omaha was a far different story. First, because he was married, Charles would receive a 12 percent discount for his coverage with Mutual of Omaha. Unlike most carriers, Mutual of Omaha provides this discount even if you spouse is not on the same plan or is not even eligible for Medicare.
This discount would bring Charles premium for Mutual of Omaha’s Plan G down to $100.12 per month.
However, Mutual of Omaha’s Outline of Coverage showed they would increase their premiums much less than Anthem BlueCross as Charles got older.
In fact, Mutual would not even increase their premiums based on age at all until Charles reached age 68.
By the time Charles was 70, his premium with Mutual of Omaha would be $105.91 while his Anthem BlueCross premium already would have increased to $120.00 per month.
By the time he was 75, Charles’ premium with Mutual of Omaha would be $123.14 while his premium with Anthem BlueCross would be $153.00.
Based on his life expectancy of living well into his 80s, Charles would spend much less during his lifetime with Mutual of Omaha even though the first year’s premium for the same coverage was a little lower with Anthem BlueCross.
When you are evaluating a Medicare Supplement carrier, it is critical to always compare premiums at different ages such as 70, 75 and 80 rather than simply looking at the rate at age 65.
This is especially true because, once you have been on Medicare Part B for only 6 months, your ability to change Medicare Supplement carriers depends on you not having any costly health issues.
It can be very expensive – and unnecessarily so – to be stuck in a Medicare Supplement plan the rest of your life that has much higher premiums because the carrier set their age 65 premiums artificially low and then increased them sharply every year.
I am happy to help you compare your Medicare options – including what costs will be as you get older.
Simply click on the link below to schedule a free, no-obligation Medicare consultation.
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.