Medigap, Medicare plans begin open enrollment

by Jim Pennell

Senior citizens in the Upper Peninsula who have Medicare B coverage and supplement insurance through Blue Cross Blue Shield can expect to see an increase in their premiums beginning January 1.

The insurer announced in July that premiums for its popular Legacy Medigap Plan C program would be increased for the first time in five years. It’s not just a small increase either. In some cases it’s almost 300 percent.

The rates will now take into account a person’s age, gender and location as well. Under the current plans, everyone, regardless of age and gender, pays $122.86 a month for the insurance. The plan covers the difference between what Medicare pays for health services—generally 80 percent—and the actual cost.

The new plan has a 65-year-old woman in the U.P. paying $158.45 a month, while an 80-year-old man in southeast Michigan would pay $299.66. The hardest hit would be policyholders under 65, typically the disabled, who now will have a premium of almost $315.  The Medicare Advantage plan, which has a higher deductible and offers managed care coverage such as that through HMOs, would not be affected by the rate change.

The good news is there are other options for Medigap coverage besides the Blue Cross Legacy Plan.  There are subsidies available through the Michigan Health Endowment Fund, but an application is required and there are limits to eligibility based on household income. Information on these subsidies can be found by calling 1-866-824-9772. It is estimated that 32 percent of current Blue Cross customers are eligible for these subsidies. The other alternative is supplement insurance through a carrier other than Blue Cross Blue Shield.

Marquette insurance agent John Swanson said many people have Blue Cross Blue Sheild insurance because it’s what they’re used to.

“What’s happened here in the U.P. is a lot of people have Blue Cross Blue Shield for years through their employer and then stay with it when they retire because they think they have to,” Swanson said. “When you’re working you’re paying into Medicare through taxes. When you turn 65 you’re eligible for the benefits. People don’t realize that when you go on Medicare, Medicare becomes your insurance company and you’re just picking up a supplement to take care of what Medicare doesn’t cover. What we’ve run across is that the rates for the plan people have had for years have gone through the roof and many people aren’t aware there are other plans available that are less expensive and may even have better coverage.

“Blue Cross Blue Shield has a little more than 50 percent of the Medicare supplement market in Michigan, but a Plan C with any insurance company will cover the same way,” he added. “Medicare will pay its part and the supplement insurance will generally take care of the rest, regardless of what company is providing it.”

Swanson and his partner, Curt Hewitt work out of an office in Marquette, but they travel all over the U.P. to help seniors sort out the complicated plans and options available to them.

“We specialize in Medicare and we stay on top of the changes that have come along in the last couple of years,” Hewitt said.

“We’re in the office about a third of the time and the rest of the time we’re on the road going to areas where there might not be services available to seniors. We don’t look at Medicare planning with a cookie cutter approach. We represent around 20 different Medicare supplement insurance carriers and we sit down with people and find out what their health issues are, how much they travel and what financial shape they’re in and then match a plan to them,” Hewitt said. “We help some people get qualified for programs they don’t even know exist.”

Swanson and Hewitt do their best to make people aware of the importance of making right decisions for their health care coverage.

“It’s going to be quite a journey over the next two or three months coming up for people trying to figure out their health care needs, and it’s not just seniors, it’s also people with disabilities that are on Medicare,” Hewitt added. “We generally don’t get healthier as we age; we tend to need more medical care. If you have Medicare B without a supplement and have a serious medical event, the 20 percent that you have to come up with will add up fast and can quickly burn through your savings and what you have set aside for retirement. Medicare planning is such an important part of full retirement planning. It not just having your money in the right mutual funds or investments or annuities.  The right Medicare planning is every bit as important as making sure you have the right stock.”

Timing is also important and getting enrolled in the right plan at the right time is crucial, according to Swanson.

“It’s important to make good decisions during open enrollment because after that underwriting for pre-existing conditions is not available,” he said. “You also should decide on a Medicare D plan for prescription coverage or you will be charged a penalty after open enrollment ends.”

If you are a U.P. senior citizen, you’ve no doubt had enough challenges in your life and getting health insurance coverage at an affordable rate should not be another one for you to face.

Open enrollment starts October 3. Understanding insurance terms and coverages can be confusing, to say the least, and working with local agents who specialize in Medigap supplements and Medicare health plans helps keep confusion to a minimum.

Enrollment in other types of Medicare plans open in October as well, such as Medicare Advantage plans. Benefits for the Medicare Part C Medicare Advantage plan will be announced October 1 through 14, with open enrollment running from October 15 to December 7.

Bridget LaPointe, Upper Peninsula Health Plan’s corporate marketing manager, said the plan “offers extra services that traditional Medicare doesn’t offer.” Things like hearing aids, vision services and dental care, among other services, are included in the plan.

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