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"Early Enrollment Discount" - is it legal

I had signed up for United Healthcare supplemental insurance starting from January 1, 2023. I was quoted a premium of $170 per month, which was about $10 higher that another Medicap providers, but, because the gym is included, I decided to go with it.

Then in June I got a letter saying that starting January 1 next year my premium will be $190.  So, I called the company and was told that 

a) The premium goes up next year for everyone

b) That the $170 rate is a discounted rate, that for the first year I am getting a 33% discount.  But that discount will be gradually disappearing 3% every year. 

 

That "discount situation" was never disclosed when the rate was quoted to me at the beginning.  Essentially, 10 years from now I will have to pay the "full rate".  So, in reality, the rate today is not $170, but $253, which is significantly higher that this coverage from other providers.

 

This smells like a scam!!!

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Details of the plan should have been disclosed to you in a letter most likely sent with the coverage details of the AARP UHC Medigap plan you selected.

Similar to this one (see specifically page 10 for the discount description) - these are specific to the state where you enrolled.  

AARP UHC Supplemental Policy - plan description 

 

ALL Medigap plans increase -  they base their increases on (2) things:

1.  How their specific policy is price rated 

  • community rated
  • attained age rated
  • issue age rated

2.  How much the cost of healthcare is affecting the plan - we are in a period of inflation so healthcare is not immune to this factor.

3.  any declining discount (common with AARP UHC Medigap) also increases the premium cost.

 

How much and how often is largely determined by the state - these policy increases are reviewed & approved by the Dept of Ins. in your state.  States, under their own legislation, also control other aspects of Medigap plans that are over and above what Federal law covers. 

 

I posted earlier this week about specific state increases for these AARP UHC Supplemental plans - look up your state.

AARP Community Board - Medicare & Insurance - 06/17/2023 - 2023 Rate Info for AARP / UHC Medicare Su...

 

Any EXTRA benefit one may get in combination with the standard Medigap plan usually is not covered in the actual Medigap plan contract so note that these benefits could be discontinued at any time. 

 

Medigap (Medicare Supplemental Coverage) is NOT health insurance.  Rather these plans are financial instruments (GAP insurance) that protects one's pocketbook from high cost of whatever is insured. 

Medicare is a pay now or pay later type deal.  One either opts for Traditional Medicare with a Medigap plan to cover any out of pocket cost since Traditional Medicare has no limit to out of pocket cost. 

OR one opts for a Medicare Advantage plan which has no or low premiums but is a managed care plan (networks) with a stated limit on your out of pocket cost.

 

Yes, as premiums rise and their associated declining discount dwindles, these Medigap plans will cost more & more- but they all do.  

 

Premiums have been rather stable for the last few years but that is only because we had Covid and many seniors just put off going to the doctor.  Times have now changed and seniors are back to getting health care and even catching up on it.

 

You might check with a local Medicare (Medigap) plan broker and determine if you could switch to another insurer without underwriting especially if you are healthy and younger.  Won't hurt to ask but understand that there is a set way to do this.

 

 

Medicare.gov - Can I change my Medigap plan?

 

 

It's Always Something . . . . Roseanna Roseannadanna
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