Joanne (00:00):

Are you looking to enroll in a Medicare Supplement plan but you're worried about missing something or making a crucial mistake? In today's episode, we will break down some of the biggest mistakes that we see when people try to choose a Medigap plan so that they can avoid them. 

Cameron (00:11):

But before we start, my name is Cameron Giardini, and together with my co-host Joanne Giardini Russell, we operate Giardini Medicare, which is an independent insurance agency based out of Southeast Michigan. Although we're based in Michigan. We do work virtually over the phone to directly help consumers in about 13 states to find the right Medicare coverage for them. If we do not work in your state, we will connect you with another trusted independent agent that will be able to help you find the coverage you want. And of course, even if you choose not to work with us, we know that the information in this podcast will help you with a successful and stress-free transition to Medicare. So, a brief overview of what we will talk about in this episode is what are Medigap plans. We're going to go over the five main Medigap mistakes that we often see. We'll talk about the impacts of those mistakes, both short-term and long-term with your coverage. Most importantly, we'll talk about how to avoid these mistakes. And then of course we will do a recap. Now, just a quick disclaimer or reminder that this episode is only about potential Medigap mistakes. We have another episode that is focused on the top five Medicare Advantage mistakes. So, make sure you listen to both of those. All right, so Joanne can start us off by talking about what are Medigap plans.

Joanne (01:22):

All right, so what are Medigap plans? Medicare Supplement plans are often referred to as Medigap plans. These plans are sold by private insurance companies, and they are designed to help fill the gaps that are left by Original Medicare, and they will cover most of the 20% cost sharing, which is not covered by Original Medicare. These plans allow the policyholders to see any provider that accepts Original Medicare. Rarely will you ever see prior authorization involved. Medigap plans have higher monthly premiums than Medicare Advantage, but they have lower potential out-of-pocket medical costs compared to Medicare Advantage plans, and they do not usually provide extra benefits not covered by Original Medicare, such as routine dental, vision, hearing, and more that you might see in advertisements. Medigap plans are standardized by their plan letters and the plan letters range from A through N. You'll want to look at page 76 of the “Medicare and You” handbook, and you'll see a good chart that shows all of the standardized benefits of all of these Medigap plan letters. Note that we will also refer to and link to this chart in the show notes in the episode description.

Cameron (02:21):

Okay, so now that we've given an overview of what Medigap plans are, let's dive right into the first mistake we often see when you're choosing a Medigap policy. And this first mistake is not knowing your individual state's Medigap market and what plans are available to you and what that looks like. So first off, don't think that we're just telling you to research every single Medigap plan or every company in your area to become an expert on what's available to you. We also don't expect you to know every single detail about your state's Medigap rules. Of course, that is where an independent broker like ourselves comes into play. We can help break that down for you. However, if you don't know the Medigap rules and pricing and the fact that they can vary greatly from one state to another, that is where the mistake comes into play because you don't understand that one state is drastically different from another.

Cameron (03:09):

So now I'll talk about some ways that Medigap coverage can vary from one state to another, so that way you can think about your individual needs and more importantly where you live and how that impacts it. One of the ways that Medigap plans vary from state to state is through birthday rules, anniversary rules, and other guaranteed issue rules. Now, that can be confusing because again, you're just getting into the weeds here with Medigap plans, but we have often talked about how you usually must qualify for a new Medigap plan based on your health if you want to change from one Medigap plan to another in the future. But this is not actually true in all states. So, that's why we often say in most states, you will have to qualify if you want to change in the future. There are about a dozen states that have laws that allow Medigap consumers to change to a new Medigap plan with no health questions or few restrictions.

Cameron (03:57):

This might be limited to your birthday month, it could be due to the anniversary date of your plan. It could even just be based on the different guaranteed issues or open enrollment rules that are created by your specific state. Now we'll link to more of this information. We don't want to get too far into the weeds here, but here's a very quick list of some of these states. If you're in one of these states, you can think, “Okay, well there might be something different with my Medigap coverage and opportunities going forward”. These states are Washington, Oregon, California, Nevada, Idaho, Illinois, Missouri, Louisiana, Maine, Vermont, New York, Connecticut, Massachusetts, and coming soon, Maryland. Some of these states do offer far more protection than others. Just make sure that you have somebody in your state highlight your state's specific laws about Medigap plans, and more importantly, change Medigap plans in the future.

Cameron (04:46):

And now I'll continue with mistake number one, which again is not knowing how your state's individual Medigap market works and how it looks different than other states. Another way that States can vary with their Medigap plans is how they rate the plans. If you've ever gone on Medicare.gov, you've probably seen issue-age versus community-age-rated or attained-age-rated policies. Again, not going into the specific details on that, but those are the three main rating systems that are used for Medigap policies. A lot of consumers when they do see this on medicare.gov, they tend to fixate on the issue-age policy. Since when you read it, you will probably think that it means your Medigap premiums will never increase, which is not true. But we've talked about that in other episodes and we can talk about that again in the future.

Cameron (05:33):

But just know that before you fixate on any one of those three rating systems, figure out what's actually common in your state. For example, in Michigan, pretty much all the competitive Medigap plans, they're attained-age-rated. While in Florida, on the other hand, Medigap plans must be sold as issue-age-rated. It's always just good to know which plan ratings are popular in your state and understand that where you live is going to dictate what your actual options are. So again, don't fixate on those first three. Figure out your state's actual market and then figure out, “Okay, which one do I want?”, another big way that Medigap plans will vary from one state to the other is pricing. If you see Medigap prices from another state or even another zip code, if you see those in advertisements, understand that the pricing you are seeing is essentially meaningless for what is available to you.

Cameron (06:23):

Medigap plan premiums, can and will vary greatly from one state to another. Here's a very quick example. A 65-year-old male Plan G in Metro Detroit is about $130/month. However, if you compare that to Orlando, Florida. it would be $190 on average per month for that same 65-year-old male to get a Plan G. Again, pricing varies drastically from one state to the next. And lastly, some states even have unique plan designs. Social media and even our episodes are full of Plan F versus Plan G versus Plan N, those kinds of conversations. But some states don't follow these standardized plan letters. For example, in Massachusetts, Medigap plans are either a core plan, a supplement 1 plan, or a supplement 1A plan. Again, if you're listening in Massachusetts and you're thinking, “Okay, do I get Plan G or Plan N”, you don't even realize that's not the conversation you should be having. So, there are only a couple of states that have those unique benefits. Of course, we'll link to those as well, but just remember that it's not the same conversation everywhere you look. Now that's enough talking on my end. I'll throw it back to Joanne here and she can talk about mistake number two.

Joanne (07:31):

And we're only on number two when you can already see how much goes into this stuff.

Cameron (07:35):

Number one is the long one, so hang tight!

Joanne (07:38):

The second mistake that we see is that people misunderstand what the Medigap Open Enrollment Period looks like for them. And what this is, according to CMS, this is the technical definition, but the Medigap Open Enrollment Period, lasts for six months, and it starts on the first day of the month when you are both age 65 or older and you're enrolled in Medicare Part B coverage. During this enrollment period, an insurance company cannot refuse to sell you any Medigap policy that it offers, and they cannot charge you more for any Medigap plan based on your health, or they can't make you wait for coverage to start. In most circumstances, there's an official choosing a Medigap policy handbook. You can find it online, but we'll link it in the show notes, it even says that this is the best time to buy a Medigap policy.

Joanne (08:24):

The common mistake we see people make when it comes to this open enrollment period is they don't know about it. Number one, they don't know it exists. So, some people begin Part B at age 65 or later and they have no idea that this is even triggering that six-month window. Luckily, if you're listening to this episode, your Medigap Open Enrollment won't sneak up on you. Another mistake related to the Open Enrollment Period of Medigap is that they think that the Annual Election Period and there are a lot of acronyms and time windows here, but the Annual Election Period happens in the fall. This is from October 15th to December 7th. Every year they think of this as the same thing as the Medigap Open Enrollment Period. However, a lot of people refer to AEP as “open enrollment”, and we know that's why this is all confusing to you.

Joanne (09:08):

However, in the fall, that Annual Election Period does not give you a yearly opportunity to change from one Medigap plan to another without any health underwriting to qualify for a new plan. So again, just like Cameron talked about in the prior mistake, this doesn't apply to all states, but in many, many states this is the case. And here's the last thing you should really know about the Medigap Open Enrollment Period. If you were eligible or are eligible for Medicare prior to age 65 for whatever reason, and now you're going to turn 65 years old in this case, you're going to have a six-month open enrollment period starting the month that you turn 65, even though your Part B has already been in effect, that's a very important thing for people in that situation to understand.

Cameron (09:48):

Yeah, super important. You aren't picked on just because you had Medicare may be due to a disability under 65. You get that so-called do-over when you turn 65. Just be aware of that when you are keeping Medicare past age 65. Now, mistake number three, I told you it will go a little bit quicker now, but this mistake is only considering one Medigap plan letter. We talked about it, but in most states, Medigap plans are standardized by plan letters. There are currently 10 plan letters available to you as a consumer. In most states, Medigap plans are standardized by their plan letter. There are currently 10 plan letters available, and these range from A to N. And there are two additional high-deductible options that don't really show up in that chart well. Remember the chart I'm talking about is on page 76 of the “Medicare and You” handbook.

Cameron (10:35):

We always reference this because it really is an awesome spot to see all the different Medigap plans available in one easy-to-read and follow location. The sheer number of Medigap plan letters, it's really overwhelming and luckily there's only a handful of them that end up being relevant when you look at the plan costs and the coverages. So, what happens is many times we hear consumers say, I want G, or I want F, which is fine if you've taken the time to compare prices and coverage for the other plan letters. The key here is don't fixate on one plan letter right away just because it's recommended by a friend, a family member, or even a broker. And if that's just the one that you are familiar with, don't fixate on it. If you've only heard of plan G, make sure you still are getting prices and options for other plan letters that might be relevant.

Cameron (11:25):

Now don't forget if you were eligible for Medicare on or after January 1st, 2020, you're not eligible for plan C or plan F. So, really don't even consider it at that point. Ultimately, what we recommend is that when you're first starting your Medigap coverage, just get quotes from an independent broker or independent source and get at least a Plan G, a Plan N, and possibly a high deductible Medigap plan option, your first-time starting Part B. Again, it may be your only chance. Look at all the Medigap options like Joanne already mentioned with open enrollment. Just use this time wisely. And overall, we really don't recommend Plan C or Plan F, even if you are eligible for it. There are various reasons that we have talked about and we will cover in other episodes why that is the case. But just look at Plan G, Plan N, and a high deductible option. And you really can't go wrong with any of those. Now, mistake number four

Joanne (12:16):

Mistake number four is choosing the cheapest plan available. So, you've likely heard us, and other people mention the fact that Medigap benefits are standardized, right? We just mentioned that they are standardized by federal law. Or you may have heard that “a G is a G is a G” and “N is an N”. However, it does not mean that picking a Medigap insurance company is as easy as choosing the one that's offering the cheapest plan on the market. Remember, many private insurance companies offer different Medigap plan letters in each market. For example, in Michigan, there are over 40 different insurance companies that are offering just that Plan G. Now, the price that you pay when you're first signing up is not what you're going to pay for the rest of your life on your Medigap policy. Cameron mentioned that early on that issue-age-rated does not mean you're going to be stuck at that price when you first sign up.

Joanne (13:02):

But all Medigap plans are going to increase with premiums over time (even the issue age plans). Sometimes you'll have a small Medigap insurance company come into the market at a low price to get customers rather quickly, then they might turn around and raise premiums in a few years’ time before ultimately ending the new sales of that plan in that market leaving you potentially stuck with a plan with rapidly increasing premiums. Remember when we say stuck that is because in most states if you want to change from one Medigap plan to another Medigap plan, you must qualify medically to get that new plan. So, you must be careful of that. A good broker can help you find a Medigap company with competitive rates that hopefully will stay relatively stable for as long as possible. We say hopefully because everyone still has to make their best guess. And pretty much all the Medigap companies face larger rate increases given enough time. Nothing's perfect.

Cameron (13:51):

No, it never is. One thing that is more likely to be a worse option, I would say is again what Joanne had already talked about, just simply choosing the cheapest plan on the market with an insurance company you may or may not have ever heard about. That directly ties into mistake number five because you may choose the cheapest plan if you're not using a broker. If you are not using a broker, that is the last major mistake that we see people make. You can already likely tell that more factors go into choosing a Medigap plan letter and insurance company than you may have thought. The easiest way to navigate your Medigap options is of course, in our opinion, by using an independent broker. We are never ashamed to say a broker is probably going to be your best resource when it comes to searching all of your Medigap options.

Cameron (14:33):

And this is true whether it is us or another independent broker that knows the market that you are in. That's really the key. If you do try to take the time and look up Medigap plans and prices on your own, you're quickly going to find that there are really not many good places online to compare Medigap pricing. Medicare.gov is a common place for consumers to look, but in our opinion, it is severely lacking when it comes to actual helpful and accurate Medigap quotes. It's good with Part D, and it's good with Advantage plans, but they are just completely lacking when it comes to accurate Medigap pricing. And the alternative to that is calling every Medigap plan or every Medigap company. If you do that, it's virtually impossible. Like we have said in the past, in our home county of Livingston County, Michigan, there are over 40 different insurance companies offering Medigap plans with the exact same plan letter (and the same standardized basic benefits). So, if you're avoiding a broker or somebody independent because you don't want to be sold to or you don't want to hear a sales pitch, I can certainly guarantee that you're going to hate 40 individual companies giving you their individual sales pitches much more than just from one broker.

Joanne (15:37):

Then you're also going to be on 40 more sales calls list. You get that many more phone calls and many more postcards and things in the mail.

Cameron (15:46):

Even 10 companies are a lot to call. Again, you can, but it's probably not the preferred method. And lastly, we just want to point out that our services, cost you nothing. We get paid a percentage of your Medigap plan premiums as a commission. And the monthly premium you pay for your plan will be the same if you use us or if you call the company directly. I know people think commission makes us biased, but it's relatively the same amount with all the Medigap companies. So, it doesn't really skew us from one to the other. We just try to find the best companies to work with and that's who we stick with. All right. Now I did lie. I said that was the last mistake, but I have Joanne here with a bonus mistake. 

Joanne (16:23):

The bonus mistake is choosing a Part D insurance plan from your Medigap insurance company. Part D coverage, that's what's going to provide your coverage for your prescription medications that you fill at the pharmacy. These plans are also offered by private insurance companies that are approved by the federal government. So, if you choose to keep Original Medicare and you purchase that Medigap plan, it's very, very likely that you will purchase that prescription standalone Part D plan to avoid the potential lifetime penalty and help cover the cost of the prescriptions that you're going to be filling on a regular basis. Even though these are technically optional plans, we always will absolutely recommend that you get a Part D plan. Now, remember that many of the major insurance companies that offer Medigap plans also offer a Part D prescription plan. This doesn't apply to all Medigap companies, but many of the bigger companies certainly do offer Part D coverage.

Joanne (17:15):

Now, here's our tip. The bonus tip does not choose that Part D plan just because you're buying the supplement from the same insurance company. Always make sure that you or someone on your behalf is running the list of your medications to see which plan of all the plans fits what's best for you. And you can find that information on Medicare.gov. So, having that Part D company that matches your Medigap company is not going to make your life easier. And if anything, it may unnecessarily cost extra money. Usually, when we hear someone has the same insurance company and Part D company that match, our flags, go right up thinking they made a mistake. Rarely does it really work out that way. We're not saying that you should never choose the same Part D company as your Medigap insurance company, but you really need to look at all the options in your zip code. Keep in mind that all Part D coverage plans change every single year. They should be reviewed annually in the fall. It's good to get used to not being tied to a specific company when you're first starting your Medicare coverage. Just don't feel it has to match.

Cameron (18:24):

Yeah, exactly. Couldn't have said it better. Choosing a Medigap policy can be one of the most important decisions that you make when you transition to Medicare. Luckily, if you have taken the time to listen to this episode, you now know some of the most common mistakes that we see when it comes to Medigap coverage and more importantly, how you can avoid making these mistakes. As always, please leave us a review on your podcast app and subscribe so you can listen to future episodes. You can also find more Medicare content from us from by going to YouTube and searching Giardini Medicare. If you do want to schedule a one-on-one phone call with one of our licensed brokers, you can do that by going online to gmedicareteam.com. Finally, if you have any feedback or questions about the podcast or really anything related to Medicare, send us an email at info@gmedicareteam.com. Thank you very much and have a great day!