March 5, 2014
Medicare Supplement Comparison Mailings
By Larry Weigel
Several of my clients have asked me about a direct mail piece they are receiving that appears to be an important document regarding their Medicare Supplement insurance.
I received one recently and it does look like it’s something important because it says: REGISTERED DOCUMENT: DO NOT DISCARD.
Then it says: Important: Complete and Return: They want to know your name, address, date of birth, email, and whether you have a Medicare Supplement policy. You are then offered a personalized Medicare Supplement comparison schedule.
As you turn over the backside the REGISTERED DOCUMENT words appear again and this time it says: DO NOT DESTROY instead of the word Discard which to me creates doubt and confusion. Gosh, what if I don’t respond because I’m not supposed to destroy this document? Worry- call the Medicare Coach.
Don’t be fooled by the wording. It’s a sales pitch disguised as some type of official document.
As you read down in very tiny print at the bottom of the mailer it says: Notaffiliated with or endorsed by Government agencies. You may be contacted by an income for Life Insurance Licensed Representative.
Here are some tips to consider if you receive a mailing like this:
- All Medicare Supplement insurance policies provide the exact same benefits depending on which type of policy you select whether it is one of the following choices available: A,B,C,D,F,G,K,L,M,N.
- Buying a Medicare Supplement plan is like buying a Toshiba TV since the internal components are exactly alike whether you buy it at Sears or Best Buy. Ideally, most of us want the Best Buy option.
- Even though the plans are the same for all companies, the premiums are priced all over the place- and the difference in pricing can be significant in some cases as much as $500 to $1500 per year in premium.
- The tricky part for buyers in not knowing which mouse trap to buy because some companies offer a very low entry premium and then in later years, the buyer starts getting huge premium increases.
- It’s more important to know the history of premium increases by the insurance company than what premium is being offered to you.
- The premiums are priced according to the type of plan you buy. You must know the difference between apples, oranges and watermelons.
- An Attained Age policy increases each year by age and zip code medical claims in your area. (That’s an apple)
- An Issue Age policy does not increase each year by age but by zip code medical claims in your area. (That’s an orange)
- A Community Rated policy is usually affiliated with a large size group plan like the one for State of Kansas employee-retirees. This plan is priced higher from the start for everyone regardless of health to account for high risk cases, but the premium increases are modest. (That’s a watermelon)
- Even so, if you are age 65, you could get a better buy with an Attained or Issue age plan because you’ll be paying the same premium as an age 80 member in the plan because all premiums are the same regardless of age. But if you are age 65 and just joining Medicare you could save as much as $900 per year in premium with an Attained age plan. Community rated plans are more advantageous for older insureds above age 75 and less desirable for younger members.
- An Attained Age policy increases each year by age and zip code medical claims in your area. (That’s an apple)
One of my pet peeves is the way Medicare Supplement products are marketed to seniors. They are marketed as a product sale. The buyer usually doesn’t know what questions to ask or how to compare one company from the next. And, very few buyers even know there are high deductible plans that could save buyers thousands of dollars over time.
