Medigap premiums experience inflation just like everything else. It’s especially frustrating, though, to receive an annual letter about your rate going up when you are retired and living on a fixed income.
Fortunately, there are ways to lower your premiums. Here are a few tips we’ve followed over the years to keep our clients’ premiums down.
1. Take advantage of household discounts.
Many Medigap carriers offer household discounts if both spouses have a policy with that company. A savings of even 5% can add up to a lot over the years.
In addition, there are now some companies that offer the discount to anyone living with any other person, spouse or not, even if that roommate doesn’t have a policy. Check with your broker to see if you qualify.
2. Opt for Plan G.
For many years Medigap Plan F has been the most popular plan. Everyone likes a policy that provides coverage with no copays. However, it’s not always the best value.
Medigap Plan G works just like Plan F, except that you pay the once-a-year Part B deductible ($183 in 2017). Sometimes we can find a Plan G that saves more than that in premiums. After you pay your deductible, you net the difference. It’s worth reviewing to see if Plan G makes sense for you. You can see a side-by-side chart of benefits here.
3. Consider an off-brand company.
There are a few major brand-name companies out there that we all equate with health insurance, such as Blue Cross Blue Shield, Cigna, United Healthcare, etc. These carriers do offer Medigap plans in many markets. However, there are dozens of other highly rated insurance companies offering Medigap plans. Many of these companies do not play ball in the employer health insurance market, so you’ve never heard of them, but they are just as highly rated and offer the exact same coverage. Ask your broker for quotes from all carriers in your area.
4. Consider a high deductible.
In the under-65 world, high-deductible health plans are very popular because they offer lower premiums. Medigap has a high-deductible health plan option as well: High Deductible Plan F.
In this plan, Medicare pays its share, and then you pay your share until you hit the plan’s deductible ($2200 in 2017). Then the plan pays 100% of your share for the rest of the year, just like regular Plan F. Premiums for this plan are exceptionally low and can save you hundreds of dollars per year.
5. Take advantage of your free physical.
It’s no secret that preventive care can often help us avoid costly health problems. Medicare offers you a once-a-year annual physical at no charge, and it also pays for many preventive care services. This includes vaccines, bone mass measurements and screenings for a wide array of health conditions. Take advantage of your physical each year — it’s free and could lower your spending long-term by keeping you healthier up front.