By Tonya Aiken with Louisiana Senior Advisors, LLC, Contributing Writer
If you’ve been keeping an eye on your Medicare Supplement costs lately, you might have noticed something unsettling—rates are going up, and fast. In 2024, insurer Blue Cross Blue Shield of Louisiana (BCBS) hiked their rates by as much as 20% for both new and existing policyholders. That’s a big jump compared to the industry average of 5-8% annually.*. And BCBS isn’t alone; many other insurance providers are following suit with similar hikes.
So, what’s causing all this financial headache? It’s all about inflation and an influx of claims post-Covid. The rising costs of goods and services significantly impact medical services, which in turn affects your rates. When thinking about future rate increases, it’s also crucial to understand your Medicare Supplement’s structure. Many companies use an age-based rating system with annual increases. A knowledgeable agent can provide insight into companies with stable rate increases, supported by historical data. This minimizes the chances of any huge rate increases down the line.
So, what options are available to reduce your Medicare Supplement premiums?
When you turn 65, you have a six-month window to sign up for a Medicare Supplement during what’s called the Open Enrollment Period. This guarantees you coverage regardless of any health issues you might have. But step outside of that window, and things get trickier. If you have a major pre-existing condition, insurance companies can use it to deny coverage or jack up your premiums should you decide to switch plans. If you are relatively healthy, beneficiaries can reduce their costs by shopping for cheaper coverage with another company. You will just need to answer health questions to qualify.
Last year, Louisiana introduced a new rule called “The Birthday Rule.” It lets you switch to a different plan within the same company on the anniversary of your birthday, even if you have a pre-existing condition. It’s a handy way to tweak your coverage to fit your needs without jumping through the underwriting hoops. This option allows you to reduce your premium costs by switching to a plan with lesser coverage.
If you don’t mind some restrictions, Medicare Advantage plans are also an option. Medicare Advantage Plans, also known as Part C, are provided by private insurers that are contracted with and subsidized by the government. These plans often come with lower monthly premiums compared to Medigap plans but have varying out-of-pocket costs based on usage. They typically include additional benefits such as vision, dental, and hearing services, which are not covered by Medigap plans. However, Medicare Advantage plans generally require members to use a network of doctors and hospitals. When choosing between the two, it’s essential to consider your healthcare needs, budget, and preference for provider flexibility.
Understanding all of this isn’t just about knowing the numbers; it’s about making informed choices. Whether you’re choosing a plan during your Open Enrollment Period or considering a switch under the Birthday Rule, staying on top of these changes is key. It’s important to find a balance between coverage and cost that works for you, especially in a year where every dollar counts more than ever. So, take a moment to review your options, talk to an expert if needed, and make sure your Medicare Supplement is still the best fit for your health and your wallet. And as always, we’re here to help! Visit our website at www.louisianasenioradvisors.com to request a consultation.
As always, you may also call Louisiana Senior Advisors at (985) 370-9167 if you have any questions or visit our website at www.louisianasenioradvisors.com to request a consultation. We’re always here to help!
