Medicare Supplement Insurance: The Surprising Lower Rates

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Perhaps it's a sign of the recession, but both of two new Medicare Supplement plans

that became available this year have lower premiums than some of the earlier plans. Medigap Plans M and N keep premiums low by requiring you to pay a portion of Medicare's charges.

Plan M only covers 50 percent of the Medicare Part A $1,100 deductible, which you must meet before Medicare picks up your hospital bills. If hospitalization is unlikely, this might make sense for you. Plan N reduces premiums by requiring you to pay for part of Medicare's Part B co-insurance amounts for doctor's services. This plan could work well if you typically spend little on Part B co-insurance.

Beyond these new low-cost plans, one of the biggest names in health insurance has actually proposed cutting Medicare Supplement Insurance premiums where the need is greatest. A name you don't often think of as being a leader in low-cost health insurance, Blue Cross Blue Shield, wants to offer larger discounts on Medicare Supplement plans to Michigan seniors with the lowest incomes.

How Does The Blue Cross Plan Lower Medicare Supplemental Insurance?
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As the largest insurer in Michigan, Blue Cross already uses one percent of what it collects in premiums to help lower the price for people with Medigap insurance to supplement their Medicare coverage. Blue Cross representatives say that this translates into a 39-percent discount, which is currently being evenly distributed to those with Michigan Medigap policies. Blue Cross is requesting to skew that distribution in order to make the largest discounts available those who need the most help.

Representing Blue Cross, Andy Hetzel says that, "We're asking some folks to pay about 50 cents a day more to help people who are their age, but who have trouble eating or paying their mortgages or health insurance."

All seniors would still benefit from discounts of at least 25 percent, but those with the greatest need in Michigan would get extra help. For example, the Blue Cross plan would mean that a senior with an income of $16,245 would only need to pay for half of the $191 monthly premium.

If this change is approved by the state Office of Financial and Insurance Regulation, more than 200,000 Michigan seniors could see a change in their Blue Cross Medicare Supplement premiums. If you have an income above $32,600, you would see an increase, but all others would get a price reduction in their premiums. Will this idea spread to other states beyond Michigan?

How Can You Reduce Your Medicare Supplement Insurance Premiums?

No matter what state you live in, there's a simple way to keep your premiums low. One of the easiest ways to be sure you're getting the best Medicare Supplement value is to request an annual review where independent agents compare your needs to other Medigap Policies.

If your health makes it simple to change policies, you may find a lower-priced plan that works better for you. It's a good idea to request such a free policy review once a year so you don't miss out when new plans become available. If your needs change, of course, anytime is the right time to see if a different Medicare Supplement can save you money.

by: Wiley Long

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