We talk to seniors about Medicare Supplement insurance coverage almost every day. When we look at the actual statistic it adds up to dozens of seniors every week. In over 80% of these conversations we can save the senior a meaningful amount of money on their Medicare Supplement insurance without changing the plan or losing any benefit. By meaningful we mean between $400 and $1,100 per year on average. That adds up to between $800 and $2,200 per household in likely savings. But only half the seniors we talk to will move out of their comfort zone and reduce their cost, even though they would simply be paying less for the exact same plan. We have found that of those seniors who choose not to save money on their Medicare Supplement insurance, there is one major reason they stay in their expensive plan and choose to lose thousands of dollars over their lifetime by paying higher insurance premiums.
Medicare Supplement Insurance
Unlike Medicare Advantage, Medicare Supplement insurance plans are standardized by the Center for Medicare and Medicaid Services. Where Medicare Parts A & B pay for 80% of the covered outpatient medical costs and almost all impatient costs, the Medicare Supplement insurance plan is designed to cover all or some of the balance. To keep it simple, Medicare designates each Medigap plan type by letter. As of this writing, Plans A, B, C, D, F, High Deductible F, G, K, L, M and N are available
By standardizing the plan benefits it means that all Medicare Supplement insurance Plan F’s are identical, all Plan G’s are identical, all Plan N’s are identical, and so on. Although the plans and the benefits they offer are required to be identical in every way, the price of these plans vary wildly. That is the concept that many seniors have a difficult time coming to terms with. so, it is worth repeating. Although the Medicare Supplement insurance policy benefits are standardized to be identical in every way, insurance companies are free to charge whatever they wish. Prices are not standardized. Only benefits are standardized.
In most every U.S. Government publication on Medicare Supplement insurance plans consumers are warned that although the plans are identical, different insurance companies can and do charge wildly different prices. You can be living next door to your identical twin and both of you have a Medicare Supplement insurance Plan F, but from two different insurance companies, and one of you could be paying twice what the other pays. That is why the government advises seniors to first identify which plan they want, then shop for the best price.
So why are too many seniors reluctant to invest the 30 minutes it takes to save thousands of dollars over their lifetime? In most cases it’s
a misconception over what services they are receiving from their Medigap insurer and which are simply a part of Medicare. They are thanking their Medigap insurer for features of Medicare of which the insurance company has absolutely nothing to do.
In response, we wrote the brief article below. Seniors that can embrace the information presented below open up the door to saving thousands of dollars in Medicare Supplement insurance premiums over their lifetime. Why? Because they come to understand that Medicare Supplement insurance policies are a commodity. Unless health conditions prevent you from changing insurers, there is no valid reason to pay a penny more than you have for your Medigap coverage.
Give Credit Where Credit to Medicare!
So here you are, you’re on Medicare and have a great Medicare Supplement policy. You never see a medical bill and all your services are paid. If you are thanking your Medigap insurance company for such wonderful benefits, you’re thanking the wrong entity.
Here is why —
96% of all doctors in the US are Medicare Participating Providers. To become a Participating Provider your doctor had to sign a contract with the Center for Medicare and Medicaid Services (CMS). That contract (form CMS-460) mandates that:
1. For becoming a Medicare Participating provider, Medicare will pay the doctor 5% more than Non-Participating providers.
2. In return, the doctor’s office agrees to use Medicare’s fee schedule. Medicare sets the prices for services to Medicare beneficiaries (aka you the patient)
3. Medicare becomes a “one stop” billing center. After Medicare makes its payment, Medicare sends the remaining claim onto the Micare Supplement insurance company for payment. All payment goes directly to the doctor’s office or hospital.
4. The contract also provides that the doctor’s office cannot bill a Medicare beneficiary unless you give written permission via an Advanced Beneficiary Notification (ABN). The only money allowed to be collected from a Medicare beneficiary, without an ABN, are any co-pays or deductibles determined by the Medigap policy.
That is why you never see a bill. It’s because of the contract between your doctor or hospital and Medicare. It has nothing to do with your Medicare Supplement insurance company. Thank Medicare or thank your doctor, but your Medigap insurer has nothing to do with it! You get the same benefits no matter which insurer administers your Supplement or what they charge because the service you feel so comfortable with is Medicare!
There you have it! The reason most seniors stay with a high priced plan is because they believe the quality of service, the fact that all their medical procedures have been paid without their having to even look at a bill is due to their Medicare Supplement insurance provider. But it’s not. It’s just how Medicare works, and they will get the same great service from Medicare and their doctor no matter how much or how little they pay for their Medicare Supplement insurance plan. Once a person understand and embraces this simple fact, they are free to seek out the best plan and best price without guilt or fear of losing services. They are free to make the best decision for themselves.
To build on the brief article above, while 94% of doctors are Participating Medicare Providers, about 3.30% of doctors are Non-Participating providers. As a Non-Participating Provider, this small group of doctors do not have to agree to Medicare’s rates. They can charge more. When they do, the amount above and beyond what Medicare’s payment schedule is willing to cover is called a Part B Excess Charge. Part B excess charges are the responsibility of the Medicare beneficiary (patient) unless it is specifically covered by their Medicare Supplement insurance policy. Plans F and G insure against Part B excess charges.
The Advanced Beneficiary Notice (ABN) results in the most confusion and surprise medical charges for seniors. More often than not, this form added to a stack of other forms for the patient to sign and the senior has no idea they can end up responsible for thousands of dollars of services not covered by Medicare. If you would like to learn more about how to take control when presented with this form and what to watch out for, call our office. We would be happy to show you the form and how to understand it and complete it to your benefit.
Shield Insurance Solutions is independent. Our goal is to find the best insurance company, price and policy for you. We specialize in living benefit life insurance and Medicare Supplement insurance. We work with nearly 100 different insurance companies in order to find the right policy at the right price and value for you. We are transparent so you can make the most informed decision and have been in the financial services industry since 1984. Our life products include Medicare Supplement insurance / Medigap insurance, Whole Life, Universal Life and Term Insurance (all living benefit life insurance), mortgage protection insurance and final expense insurance. We are based in Jupiter and Palm Beach Florida, the treasure coast and licensed in almost every state including Virginia, Maryland, Oklahoma, Indiana, Pennsylvania, Alabama, Florida, California, Illinois and expanding. If you are shopping for a life insurance quote, we can show you what many of the top insurance companies will offer. The price differences will amaze you. Visit www.ShieldInsuranceSolutions.com to get a free life insurance quote comparison, or call us at (800) 847-9680