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My Illinois Medigap Rate Went Up- Now What?

Medigap Insurance, just like any other insurance, has pesky rate increases that no one likes. Clients always ask us whether their rate will go up, and the answer truthfully is YES. Any agent who tells you otherwise is untrustworthy.

Most Medigap policies have a rate increase once a year, usually on your policy anniversary, although some increase on your birthday month instead. Over the last few years, we’ve seen a couple of occasions though where a rate stayed level from one year to the next, or even had a small decrease. Unfortunately, while those are wonderful when they happen, they are not the norm. Rates generally do go up over time, and that’s because of inflation.

Medicare supplement insurance policies like these are subject to inflation just like everything else in America. The cost of healthcare is rising, so the insurance companies must adjust annually to reflect that. Medicare itself also usually increases the deductibles from year to year, and many Medigap plans cover those things. Your policy will be covering bigger deductibles when that happens, so it results in increases to your monthly premium.

So what can you do to keep those rates in check over the years? I’ve got some tips to share with you here.

Get Quotes from Other Medigap Carriers

If you really like the benefits that your current policy provides, then the first thing to check is whether any other Medigap insurance carriers are offering that same plan for less. Medigap plans are standardized by plan letter, so if you have a Plan F, and you switch to another carrier offering Plan F, you can feel 100% confident that your benefits will remain exactly the same.

Medigap plans also do not have networks, so changing your Medigap company does not affect your access to your doctors in any way. You will still be able to see any provider in the nation that participates in Medicare. The only difference is that after Medicare pays its primary share, it will be sending on the remainder of that bill to a different Medigap insurance company to cover the rest of any benefits owed on your behalf.

There’s no crystal ball here – we can never be certain what any carrier’s rates will change to the next year. However, we can do our best to make some educated guesses based on the history, and that’s helpful.Here at Rueck Insurance, we have a quoting software that instantly compares all of the Medigap carriers in any zip code, and lets us see at a glance whether any other company has lower rates in your area. I’ve found it to be extremely helpful in not only finding the lowest rates, but in also allowing my staff to search for rate trends among the carriers. If we see a very competitive rate, but the increase history feature of our software tells us that this carrier has had double-digit rate increases of 10% or more every year, then we look for a carrier with a similar competitive rate but lower increase history.

Consider some Cost Sharing

For many years in America, Plan F was the most popular seller. It is still very popular today. This plan has the most benefits of the bunch, leaving you with no cost-sharing out of your own pocket for deductibles or doctor visits. Because it offers the most benefits, it is also usually the most expensive plan sold by a Medigap carrier.

In recent years, we’ve seen a trend where more consumers are looking into some of the other standardized Medigap plans that offer lower premiums for slightly less benefits. In other words, if you agree to share in a little bit of the medical costs, you can get a lower premium. For example, Plan G has only one small difference from Plan F, but can sometimes save you $200 – $300/year in premiums. 

Plan N is another Medigap policy that has become more popular. On this plan you’ll pay your own Part B deductible and you’ll have copays for things like emergency room visits and doctor visits. However, the premiums can be hundreds of dollars lower annually, so for many people, it’s a good trade-off.

Look into Household Discounts


Medigap carriers compete for your business, and one of the most common ways is to offer a household discount. The discounts can range from around 5% up to 12% with certain carriers in certain states. In the past, these discounts have usually been for spouses who enroll in Medigap plans with the same carrier. When both spouses have their policy with the same company, they both get the discount.

In recent years, however, we’ve seen a few carriers make the qualifications a bit easier. For example, some will now offer the discount to anyone who lives with another adult person, even if that person doesn’t have the same insurance carrier. Not all carriers require that adult to be your spouse either. A roommate or other adult relative will sometimes suffice.

If you live with or are married to another person, check with your agent to see if you are eligible for any discounts. This can result in quite a bit of savings for you.

One thing to remember about Medigap policies is that they do not have an annual open enrollment season in the fall like Part D plans do. In order to switch for some savings, you will have to pass medical health underwriting and be approved for the new policy. If health conditions prevent you from switching to a less expensive Medigap policy, and you can no longer afford your current policy, then a last alternative that you might consider is Medicare Advantage.

Medicare Advantage Plans as an Alternative

Medicare Advantage plans only have one health question that asks about End Stage Renal Failure (kidney disease), so the vast more majority of people can qualify – even people with health conditions that prevent them from switching between Medigap plans. Anyone who has Medicare Parts A & B and lives in the plan’s service area can enroll in a Medicare Advantage plan during the fall annual election period each year from Oct. 15 – Dec. 7.

medigap rateThis is not a decision to be made lightly. Coverage under Medicare Advantage is very different. Most of these plans have HMO or PPO networks of doctors, and some require you to see a primary care doctor for a referral before being allowed to see a specialist. You’ll want to make sure that any plan you consider is one that your important doctors are participating in. However, the trade-off for having a more restrictive network of doctors is that many Advantage plans have lower premiums than Medigap plans, and may also include a built-in Part D drug plan.

I strongly recommend working with an insurance agent on these plans, for several reasons. You’ll want to calculate your potential spending on Medicare Advantage plans to make sure the switch could benefit you. For example, if your Medicare Advantage plan has a $40 doctor copay, and you see a specialist twice a month, you will eat into that savings pretty quickly and it might not be worth changing.

Another reason you should work with an agent is that Medicare Advantage plans just seem to incur more hiccups. You’ll want to have someone on your side if the plan denies coverage for something. An agent can help you with resolving issues like these. Over the years my client service team has helped scores of clients resolve claims disputes on everything from medications to physical therapy that has been denied by an Advantage plan. Our experience is that these issues occur far more often on Medicare Advantage plans, as opposed to Original Medicare and Medigap, so you’ll be wise to have the extra help of an agent on your side to guide you through the appeals process.

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Rueck Insurance is your independent, one-stop insurance center for all your personal and business insurance needs in Illinois. Insurance shopping is easy when the Protection Team provides you with multiple quotes to choose from. You will always know you are getting the best coverage at the lowest possible price.

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Rueck Insurance is your independent, one-stop insurance center for all your personal and business insurance needs in Illinois.

702 Bloomington Rd#205
    Champaign, Illnois
(217) 355-9075

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