Ask the Medicare Specialist

Question from Derrek: My wife Joyce and I both have Medicare Supplements we purchased with the help of The Health Insurance Store. We received your letter concerning the upcoming 18% premium increase scheduled to start on our anniversary date, April 1, 2026. Unfortunately, with Joyce having MS, she cannot pass medical underwriting. I on the other hand feel that I could. That said, I'm leaning toward continuing with my current company. They seem to be a solid insurer, and I'm worried another won't be as reliable. In addition, I can easily afford their increase. I fear that if I switch, any savings would probably be less than $20-25/month, and potentially short lived, since there is no guarantee that the new company wouldn't also eventually raise their premiums. I understand that at some point I too may not be able to pass underwriting. Waiting affords me the ability to play this out a little longer. If you see my premiums skyrocketing beyond other insurers' premiums, then I may attempt to switch. I'm writing to get your opinion, especially if it's counter to mine. Thank you for your continued support. We find it difficult to navigate the Medicare swamp and take comfort in your expertise and guidance.

Answer: It's our job to always keep clients informed of what's going on with their plans and Medicare in general. We take great pride in doing everything we can to eliminate the stress of dealing with all the changes, developments, rules, regulations, and intricacies of Medicare. It is, as Derrek describes a "swamp."

Before I address all of Derrek's concerns, I want to make sure everyone knows that several of the most popular Supplement companies in Pennsylvania have announced much larger than normal premium increases ranging from 12% to 20%, up to 40% in other states, that started going into effect June 1st. Most people will not pay a higher rate until the anniversary date of their policy as Derrek mentioned. He and his wife's premiums aren't increasing until April 1st of next year, their policy's "birthday."

Regarding his current company being a "solid insurer," when it comes to Supplements, there are none that are solid or unstable, reliable or unreliable, better or worse, good or bad when it comes to what's covered, how claims are approved and paid, access to doctors and hospitals, and the ability to get medical treatments or tests without needing prior approvals from an insurance company. Those are regulated to all be identical regardless of carrier. To quote the Centers for Medicare and Medicaid, "All Medigap policies must follow federal and state laws designed to protect you, and policies must be clearly identified as Medicare Supplement Insurance. Medigap policies are standardized, and in most states are named by letters, Plans A–N. Each standardized Medigap policy under the same plan letter must offer the same basic benefits, no matter which insurance company sells it. Cost is usually the only difference between Medigap policies with the same plan letter sold by different insurance companies."

Therefore, Derrek, along with anyone else who has a Supplement that's getting expensive, should not be afraid to go with another company. In the five plus years I've been writing these columns, I've probably sent this next message more than any other and I'm going to repeat it again. Don't let fear keep you from making a change, especially when it comes to Supplements with identical benefits and lower premiums. The average savings for people who are moving from Plan N to N or G to G with another company are from $500 to $1,200 per year. From C, G, or F to N it's as much as $3,000 or more annually.

Derrek mentioned he can afford the increase and it won't take effect for nine months, giving him time to make a decision. As he and I were having our discussion, I mentioned a couple of my concerns. Number one, we don't know what his health might be like by next year. He's in very good shape today and could easily pass medical underwriting. However, at 71 years of age that could change at any time. Therefore, I encouraged him to give it some thought now and if he decides he wants to switch companies, do it soon. I'm also extremely concerned that these larger rate increases may become commonplace, especially as more healthy people move to a new Supplement company or an Advantage Plan, leaving those who remain with their current carrier in pools made up of mostly unhealthy members who are utilizing more medical services, resulting in companies being less profitable or even operating at a loss. The result, I'm afraid, will be consistent annual rate increases close to, or even higher than, the 18% that his current insurer just announced. I'm not necessarily encouraging people to change Supplement companies for this round of increases alone, but what they might be in 2026 and beyond. If 20% annual increases become standard, those with $150/month premiums will climb to over $300 in just four years. And at that point, many will have to make a tough decision to leave their unaffordable Supplement permanently for an Advantage Plan. This is actually a very good option for many seniors, and we expect to transition more people than ever over to HMOs and PPOs in the coming year. But it's not something that works for everyone. Compared to Supplements that have very little, if any, out of pocket expenses, there's the potential for those on Advantage Plans to be billed $6,000 or more annually. Some people who have serious health issues meet their Maximum Out of Pocket (MOOP) every year. We have other clients who've told us they never want to leave a Supplement because of the freedom to use any doctor or hospital and get care without authorizations. But when premiums get into the $300 to $500 per month range, there's often no other choice. We want to do whatever we can, when possible, to help our clients avoid that situation.

As far as Derrek's worries that any savings may be short lived, that's possible. However, we feel the company most of our clients are moving to has positioned themselves to be less vulnerable to the market conditions that have caused the historically high premium hikes. In addition, starting with a new company at $50 to $100 less per month will definitely save what I consider a significant amount of money in the next few years. We're hopeful it will pay off substantially in the long term as well.

The bottom line is I recommend everyone who is going to be experiencing the large rate increases or has a Supplement that's getting the slightest bit uncomfortable as far as affordability is concerned, reach out to get a quote and have a discussion about making a change. We can start with a short phone call or an email and consultations are always no cost. Feel free to contact the office or reach out to me personally at [email protected].