I was recently referred to a couple in their late 60s looking for advice on their Medicare plans. Their story is a real-life example of why it is important to work with a Medicare advisor before picking a plan during open enrollment.

Case Study

I learned that this couple’s premium for a Medigap Plan G was over $200 per month, which was quite surprising. It turns out that they were sold the lowest cost plan when they first enrolled four years ago. Unfortunately, the company had sub-par financial ratings and an unproven track record. 

At the time of enrollment, the husband was dealing with serious health issues. When I spoke with this couple, he still had chronic health conditions. Unfortunately, I had to tell him that he couldn’t change plans. When switching Medigap plans after the initial enrollment period, you must qualify based on your health. No carrier would accept him, so he was locked into the same carrier for life. His rates will continue to increase at a higher-than-average pace, and there isn’t anything he can do about it.

Finding a Carrier With a Solid Reputation

When comparing Medicare carriers, it’s important to consider their financial ratings and their history of rate increases. It’s not easy to find out how they have increased rates, especially for carriers that “lowball” rates to gain market share only to raise rates much higher at renewal time. Experienced independent agents with at least 10 years in the business know which carriers play this game and which carriers have a solid reputation for low rate increases.

Luckily, this story’s ending isn’t all bad. The good news is that the wife was able to qualify for a rate closer to her original rate with a quality carrier. 

Even if you are very healthy when you first enroll in a plan, you don’t know what might happen down the road. It usually does not cost much more to enroll in a plan with a top-tier carrier.  In the long run, you will save much more, especially if you aren’t able to switch carriers due to your health.

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