Are You Living Your Best Life Now? Lower Costs And See Ways How to Reduce Medigap Premium Costs
- Gloria Moses
- Dec 12, 2023
- 3 min read
Updated: Dec 14, 2023
Retirement should be one of the best times of your life. This is a reality for some retirees but not for others. Because rent, food, utilities, entertainment and other prices are constantly going up, this image of retirement for others is only a dream. This is disappointing.
Retirement can be a big disappointment when costs outweigh your fixed income. "When things cost more, that leaves less for savings. Nearly 60% of retirees report that their retirement account balances decreased over the past 12 months, and two-thirds worry that the increasing cost of living will make it harder for them to save money. In addition, 58% are concerned they will have to make substantial cuts to their spending." Because of these financial concerns, some retirees are returning back to work.
Some retirees are returning to work because they have to and others are returning back to work because they want to. "In fact, roughly half (48%) of those working in retirement felt they needed to work for financial reasons, while a similar portion (45%) chose to work for social and emotional benefits." The latter group of retirees, feel like they still have a lot to contribute to the work environment and they want to interact with people. In turn, they have decided to return to work in part-time and full-time roles. They also want to contribute more to their retirement savings to better prepare for rising costs before they actually decide to retire for good.
Whether retirees are returning back to work because they have to or want to, it is clear that retirees are looking out for ways to reduce costs now and in the future. You may be wondering if there are ways to reduce costs with a Medigap Plan? The answer is "Yes". Let's look at how insurance companies set premiums prices and provide ways to reduce premium costs.
3 Ways Insurance Carriers set the prices for Medigap:
Community-rated (or no-age rated)-- the premium price for each individual plan is the same. For instance, the premium price for Plan A is the same for everyone. If the premium price goes up, it's not because of age--it may go up because of inflation or other factors.
Issue-Age rated (or entry age-rated)--the premiumus are lower for people that buy at a younger age and will not change as you get older, unless there are other factors such as inflation and other.
Attained-age rated--in this instance, premiums are lower because you purchased your policy at an earlier age. As you progress in age, your premiums will go up. The premiums may also increase because of inflation and other.
4 Ways Medigap Plan premiums prices may be reduced:
By offering discounts. Generally, there are discounts for non-smokers, for paying yearly, for multiple policies and other.
Through Medical Underwriting. Please note premiums generally differ if you are purchasing a guaranteed issue or purchasing a policy during Medigap Open Enrollment. If not, generally the premiums will be higher.
By Selecting a Medicare SELECT policy. For persons that live in Massachusetts, Minnesota or Wisconsin, they can purchase Medicare SELECT policies (medical care is provided by select medical providers). Generally, the premiums for these policies are cheaper.
By offering a "high deductible option" for Plans F and G (and J). If you buy Plans F or G with a high-deductible option, you must pay the first $2,700 of deductibles, copayments, and co-insurance in 2023 or $2,800 in 2024. Then, the remaining approved services are covered at 100% for the remaining of the Plan Year. Please note that Plan J is no longer sold. If you already have a Plan J policy, generally you can keep it.
In a previous post, we shared that you can purchase Plans A, B, C, D, F, G, K, L, M and N from insurance companies that sell Medigap Plans. Remember, Plans C and F are no longer available to people new to Medicare on or after January 1, 2020. However, if you were eligible for Medicare before January 1, 2020, but not yet enrolled, you may be able to buy Plan C and Plan F. People new to Medicare on or after January 1, 2020, have the right to buy Plans D and G instead of Plans C and F. (Please also note that Plans F and G also offer a high-deductible plan in some states).
Although there are realities that are beyond your control, we still believe retirement can still be one of the best times of your life if you save, seek ways to reduce costs and risks, learn to live within your means and have fun!
To help reduce your costs and risks, contact Benefits-4-Retirees for a Medigap Plan, Life and/or other senior insurance product!
“Don’t let someone else’s opinion of you become your reality.” – Les Brown
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