Should I Change Medigap Policies?
Idaho residents can change Medigap policies annually without underwriting!
Of course there are rules you need to be aware of.
These are documented on the Idaho Department of Insurances website (here).
Why would you want to do this?
Because your current plan is available from another company at a meaningfully lower monthly premium.
Also, if there is a different plan that better suits your needs and budget, you may be make the change and skip underwriting too (see the rules mentioned above).
With Idaho’s move to ‘community rating’ and also implementing the ‘birthday rule’, this process is now much easier.
It is so easy, we recommend this be reviewed annually. Why? The premium savings can be meaningful. We have found changing your Medigap policy is much easier than changing your auto and home owners insurance.
This is possible because each plan (A, B, C, D, F, G, K, L, M, and N) is exactly the same no mater which company offers the plan. Yes, some companies may add additional non-Medicare covered services (gym membership for example) or offer discounts on other services through their business partners.
If you can get you same plan from a different company at a meaningful lower premium, aren’t the savings better in your pocket than an insurance company’s bank account?
Should I change Medigap policies annually?
We recommend this be considered.
Why?
Because of the Idaho marketplace changes annually.
New companies offering these products can enter the Idaho market while others leave.
Existing companies can also request (and receive) annual premium increases. The amount of annual premium increases varies between companies. For example, in 2024 some Idaho companies had increases in the 10 – 20% range. A few were in the 6 – 9% range.
We will have a good appreciation for how 2026 will fare soon as 8 of the 21 current companies will/have announced their 2026 premium increases in the 1st quarter. Another 8 will do so in the 2nd quarter of this year.
Why the larger than normal increases?
The ratio of claims to premium income is a key factor when determining annual premium increases. Claims continue to be higher the last few years.
Why? Hospital utilization rates are up. Another is more people new to Medicare deferred the more expensive health care services because their out of pocket costs are cheaper with Medicare.
With the Idaho law changes implemented on 3/1/2022, you now have the ability to move from one company to another and get the same plan without going through underwriting.
How does the Birthday Rule affect your right to change Medigap policies?
To take full advantage of this Idaho law change, you should change Medigap policies during the 63-day window that starts with your birthday. If you do this any other time during the year, you will have to answer the underwriting questions on the company’s application. Your application could be denied depending on your answers to these questions.
Some examples of how you may benefit if you change Medigap policies
- You recently moved to Idaho and are already enrolled in a Medigap Plan. Idaho premiums could be lower.
- You presently have a Medigap Plan F and have been considering switching to Plan G. Be aware the only difference between is Plan G does not cover the annual Part B deductible. This year’s Part B deductible figure is found here. This figure can change annually and is controlled by Medicare. The reason some people switch from Plan F to Plan G is the difference between the monthly premiums between the 2 plans. This difference, when annualized, is greater than the annual Part B deductible. This means Plan G offers a better value than Plan F. If you need an update on Plan G, read this information and return to this page when done.
- Medigap plan N is available for less than Plan G from a quality company. This plan has a few more copays than Plan G, but the monthly premium can be lower. This is worth checking into.
- You are currently enrolled in Medigap Plan C or D and you have experienced many years of annual rate increases. It may make sense to consider a Plan N and pay some out of pocket costs when you see the doctor or visit the ER. You can do this without going through underwriting. If you can get through underwriting, it may make sense to consider a Plan G.
- You presently are enrolled in one of the older Medigap plans (H, I, J, J-hi deductible) and want to move to one of the current plans.
- The ‘hi-deductible’ Medigap plans may be an attractive alternative to many people. If you have savings earmarked for health care costs, this may be a good alternative. This plan caps your out-of-pocket costs for Part A and B services at $2,950 for 2026.
Additional examples when you change Medigap policies
- You are enrolled in Medigap Plan K or L and realize you are better off with one of the hi-deductible plans or even Plan N or G. If you can answer ‘no’ to the underwriting questions on a company’s applications, make the switch now.
- You are enrolled in Medigap Plan M and realize you are better off with a Plan N. You can do this without going thru underwriting if you change during your birthday window.
- A select few companies include a gym membership in their plan(s). If this feature is important to you, switch to a company that includes this benefit may make economic sense. We recommend you be aware of all companies offering this feature before changing. Why? Because there is a noticeable difference in monthly premiums between companies including this feature.
- The company you are presently with announced another annual rate increase that caught your attention. Now is time to evaluate your options. Keep in mind when you change companies, your new rate should not change for the 12 month period following the new policy effective date. Think about this point. This approach is important if you want to effectively manage your Medicare health care cost.
- You may see some companies offering a ‘multiple household discount’. This means more than one person within the household has a Medigap plan with the same company. We recommend you always compare the ‘net premium’ to the premium of other companies offering the same plan. We have found other companies are offering the same plan at lower rates even after a household discount is considered. Don’t ‘buy the headline’…always check the math.
If I change Medigap policies what about customer service? Are these other companies reliable?
This is a question we often hear and is a natural concern. A survey conducted and published on 4/20/20 noted 94% of people with a Medigap plan are satisfied with their plan. Please take a moment and read the article found here.
We often see companies attempting to use customer service as a differentiator between your choices. They do this without mentioning the national average rating of all policy holders enrolled in a Medigap plan. We feel comfortable with customer service of the companies we recommend.
A process for evaluating insurance companies offering Medigap plans in Idaho
Below are the criteria we use to eliminate companies from our recommend list.
AM Best rating less than A-. There are some exceptions to this guideline. For example, if a company had a B+ rating for many years and continues to be successful/profitable in their line(s) of business we may consider them.
Has a Medical Loss Ratio more than 2 points above the national average for the past year. We also look the annual change in this ratio. It it has gone up 3 points or more year over year, it could be a ‘red’ flag.
Have less than 10,000 policies in force. If this is a national company marketing their products in multiple states, this can be an indicator of a lack of commitment to the Medigap line of business.
Have been in the Medigap insurance business less than 4 years. If the company is a subsidiary of another company that has been successful in the Medigap business for many years we may waive this consideration. Why? Because the parent company is typically running the Medigap business for the subsidiary. The parent company’s goal of adding their subsidiary in the same market (like Idaho) is simply to get more business.
Should an Idaho resident use a broker to help them change Medigap policies?
If Idaho residents wish to select and enroll in a Medigap policy on their own they can certainly do so. The information outlined above will help them navigate their way through the process.
If Idaho resident works with a broker that specializes in Medigap plans, much of this annual burden can be eliminated. Their broker should contact you 30-days before your birthday and review your options. If you choose to make a change, they can help you get this done. They will also help you review your prescription drug plan annually.
Brokers are compensated by the insurance company when their client enrolls in a plan. This is how the broker covers their overhead and can continue to provide this service. The person the broker is working with pays the same monthly premium whether they use a broker or not.
How does underwriting work if I change Medigap policies outside of my birthday window?
Every company’s Medigap application has a section of underwriting questions. If the person applying for a Medigap plan is not in their one-time open enrollment period, birthday window, or have a ‘guaranteed issue’ they answer these questions. The company can deny the application based on the answer to these questions. Be aware each company can have their own questions. Most all companies have the same core questions, but even these may vary. If an applicant is denied enrollment by one company, a different company may not ask the question(s) causing the denial. A broker can help with this.
Some companies have automated the underwriting process while others may require a telephone interview.
More information on the Idaho Law change that made this possible
The Idaho Department of Insurance did a great job of putting together a list of ‘frequently asked questions’ on this subject. Be sure and read this as they add more clarity to this important change. They are available here.
Call us if you are a resident of Idaho (or planning on moving here within 6-months)and want to change Medigap policies
We are located in Boise have been helping Idaho residents in all 44 Counties with Medigap plans since 2012. We are not here to sell you a Medigap plan. Rather we educate the people we work with so they can make the decision about specific plans and the company that is right for them. We help them enroll in the plan with the company they pick.
If you choose to use our services, we ask you to complete enrollment in your new plan with us. Our services are no cost to you.
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