What is going on with Health Care Premiums?

[ejman]

I just got the bill for my wife's Medicare supplement (F) which went up from $105 to $122 - a 17% increase. This is the largest increase I've seen so far and I'm wondering what's driving it being that general inflation is so subdued. Sure she's a year older 66>67 but is that it? Is this related to increases I keep hearing about related to ACA? I wouldn't think so but maybe there are some connections there I'm not aware of.

 

[Bamaman]

My supplement is hanging at $55 thru my employer. Our medicine coverage is separate, however. I would thin your supplement is a stand alone policy.

I'm just glad to be off my company's Cadillac retiree healthcare insurance that they were so nice to have allowed us to purchase. Charges went up every year despite the company picking up a lot of the premium. It was like a $300 pension raise monthly.

 

[Car-Guy]

I just got my updated policy for next year. It's up about $45 a month. Now well over $500 a month for medical and drugs. Generally it seems to be the same coverage but it looks like a few more restrictions have been added. Pay more, get less.

But if I remember correctly, it seems I recall promises made by our government leaders that premiums should be cheaper and if you like your doctor you can and keep your doctor. From my perspective, both were gross misrepresentations. (a.k.a. LIE's) Maybe I was one of those "rare exceptions" and everyone else is getting what was promised thru the ACA.

I can't wait until I go on Medicare next year since it looks like I'll be one of the lucky ones that gets to pay more than everyone else that is already on Medicare for the same coverage.

 

[ejman]

I just got my updated policy for next year. It's up about $45 a month. Generally it seems to be the same coverage but it looks like a few more restrictions have been added. Pay more, get less.

But if I remember correctly, it seems I recall promises made by our government leaders that premiums should be cheaper and if you like your doctor you can and keep your doctor. From my perspective, both were gross misrepresentations. (a.k.a. LIE's) Maybe I was one of those "rare exceptions" and everyone else is getting what was promised thru the ACA.

I can't wait until I go on Medicare next year since it looks like I'll be one of the lucky ones that gets to pay more than everyone else that is already on Medicare.

My wife's policy is a regular medicare supplement (F) not related to ACA so that's what is puzzling to me with a 17% increase. As far as I know ACA is not really connected with Medicare so government promises of this or that related to Obamacare should not really relate to this particular issue. I'm just trying to understand what's driving this large percentage increase in a Medicare supplement insurance policy.

 

[Car-Guy]

Sorry for the rant but anything that involves the government and medial insurance get's me PO'd pretty quick. Never want to miss an opportunity to complain about our leaders.

 

[GrayHare]

Many people have added health insurance in the past few years, including those previously uninsurable. The funds for that have to come from somewhere. This is as bland as I can state it, I wish to avoid coloring whether that change is a good or bad thing.

 

[ejman]

Many people have added health insurance in the past few years, including those previously uninsurable. The funds for that have to come from somewhere. This is as bland as I can state it, I wish to avoid coloring whether that change is a good or bad thing.

I know medical insurance is a very hot button issue (it certainly has been for me) but in this case I'm just hoping one (or more) of the ER org members are familiar enough with medicare supplements (which as far as I know are only provided by private insurance companies) to shed some light on what is driving these large premium increases. There are other concurrent threads related to ACA premiums please lets not mix the two together.

 

[Katsmeow]

Age most likely. DH has F as well (through AARP/UHC) and his went up from $177 to $184 when his age changed (technically, his discount for being younger was reduced). This policy uses community rating so doesn't change a lot from one age to another. Other medicare supplement policies use attained age rating and have larger jumps when there is a birthday.

 

[ejman]

Age most likely. DH has F as well (through AARP/UHC) and his went up from $177 to $184 when his age changed (technically, his discount for being younger was reduced). This policy uses community rating so doesn't change a lot from one age to another. Other medicare supplement policies use attained age rating and have larger jumps when there is a birthday.

I see although it seems kind of a large jump (17%) from age 66 to 67. I guess we'll need to contact the insurance company to see what kind of rating they use. Is that up to the insurance company or is it up to the individual states to choose what kind of rating is used?

 

[donheff]

I don't have Part B so I haven't tracked this carefully but I read an article about Part B costs. Medicare raised the rates a relatively small amount this year but a grandfathering clause prevents raising the rates for most existing participants in years with no COLA. So the increase has to be assessed only against the newcomers who get something like a 40% increase. This may get smoothed out in coming years when COLAs return. Another group effected (which may apply to the OP) are high earners who also see an increase, although I can't remember what the article said that increase would be.

 

[Del Q]

My silver plan with Blue Cross went from $823.82 to $1458 for DW and one daughter. This is in the individual market. I'm self employed so I write this check every month.


Health care providers are going to have to work on containing costs, or else the gov't is going to step in and take over the whole system.

 

[Golden sunsets]

Many people have added health insurance in the past few years, including those previously uninsurable. The funds for that have to come from somewhere. This is as bland as I can state it, I wish to avoid coloring whether that change is a good or bad thing.

Supposedly the funds to cover those with preexisting conditions were to be offset by the flood of new young healthy previously uninsured. Guess that didn't happen.

 

[jim584672]

There can be a wide difference in prices for the same plan. In my area a Medigap F plan ranges from $261 to $516. This is NY, which is a community rated state.
Shop around if you can.

 

[Car-Guy]

Health care providers are going to have to work on containing costs, or else the gov't is going to step in and take over the whole system.

I'm sure that will work.

 

[ExFlyBoy5]

I will do my best to keep this "non-political", but I wonder what will happen now since there appears to be an agreement between the Prez and Congress on the budget. A budget that includes yet more cuts to doctor reimbursements? I already can't believe how little the doctors are getting NOW from the insurance companies! I mentioned to my new primary care doc (who spent a FULL 45 minutes with me!) that she will get less money from the insurance company than what I pay to get an oil change...and that just isn't right.

 

[GravitySucks]

Odd. I just signed up for my former employer partially reimbursed 2016 coverage. Same plan decreased by 2%. It is still 10% higher than the 2014 premiums. Maybe some of that increase got banked?


Sent from my iPad using Early Retirement Forum

 

[M Paquette]

The scoop on the Medicare Part B premiums

Some folks here are talking about ACA premiums, but I think the original 'What is going on' was related to the jump in Medicare premiums for some folks. Here's some info on the reason for the jump, why it only hit some folks, and a possible fix now in the works.

First, Social Security recipients won’t get a cost-of-living increase next year. Inflation didn't meet the threshold for an increase.

Second, there's a 'safe harbor' provision for Social Security payments. They aren't allowed to get smaller, and in particular, folks who have a Social Security deduction for the Medicare Part B premium (the premium for outpatient care, doctor visits, and similar non-hospitalization medical coverage) can't be asked to pay more for Part B without an increase in their Social Security payment.

Third, there's another rule that requires the payments from folks getting Part B coverage to pay at least 25% of the total cost of the Part B program. This interacts with the 'safe harbor' rule in an interesting way.

Since insurance cost went up, the total cost of Part B coverage went up. That means that more payment revenue is needed to make up the 25% contribution from Part B recipients. But, folks paying for Part B via Social Security deduction can't be asked to pay more...

So, the additional payment revenue has to come from folks who don't pay for Part B via a Social Security deduction (like those of us delaying SS til age 70!), and folks with a relatively high income taking Social Security but exempt from the 'safe harbor' rule.

Ouch. That gives 30% of Medicare Part B recipients the whole bill for the gap in the 25% contribution, which amounts to a 52% premium hike. But wait...

There is some good news on the horizon. The tentative US Federal budget deal announced Monday largely fixes the glitch between the 25% contribution requirement and the 'safe harbor' rule. The giant premium hike for some Medicare Part B recipients may not happen after all.

 

[Tadpole]

The National Committee to Preserve Social Security and Medicare put out this bulleted list of items in the budget deal that affect retirees:

Specifically, this budget agreement, if passed, would:

• Prevent a 19% cut in Social Security Disability Insurance benefits that would have occurred in late 2016
• Ensure 7 years of certainty that the Social Security Disability insurance program will pay full benefits
• Mitigate a 52% Medicare Part B premium increase for 30% of Medicare beneficiaries
• Alleviate an increase in the Part B deductible for all beneficiaries, lowering it from a projected $223 to $167
• Provide sequester relief to programs like the Older Americans Act, Low Income Home Energy Assistance Program and Social Security field offices without cutting Social Security, Medicare and Medicaid benefits.

Unfortunately, the bill would also:

• Provide NO relief to seniors who will receive no cost of living adjustment in 2016.
• Extend the Medicare provider reimbursement sequester and uses the savings to pay for unrelated programs.
• Cut Social Security spousal benefits for individuals who have voluntarily suspended their benefits by using the so-called “aggressive claiming” loophole. This benefit cut would occur next year.

The Congressional Budget Deal & Seniors


Does anyone know who that last bullet affects? Is it just the "file and suspend" group or is it all people who delayed regardless of which entitlement the spousal benefit came from? And what does "cut" mean?

 

[MichaelB]

I know medical insurance is a very hot button issue (it certainly has been for me) but in this case I'm just hoping one (or more) of the ER org members are familiar enough with medicare supplements (which as far as I know are only provided by private insurance companies) to shed some light on what is driving these large premium increases. There are other concurrent threads related to ACA premiums please lets not mix the two together.

Asking members to respect this request and get back on topic, which is why a MediGap F policy would increase price by 17%.

ejman, have you looked to see what other insurers are charging for a similar policy in your area?

Edit to add: here's a link to the Medicare Supplemental policy finder tool https://www.medicare.gov/find-a-plan/questions/medigap-home.aspx

 

[ejman]

Asking members to respect this request and get back on topic, which is why a MediGap F policy would increase price by 17%.

ejman, have you looked to see what other insurers are charging for a similar policy in your area?

Edit to add: here's a link to the Medicare Supplemental policy finder tool https://www.medicare.gov/find-a-plan/questions/medigap-home.aspx

Thank you. Yes, We've checked with other insurers and have been able to locate another policy that charges the same premium as what we are currently paying, albeit it's a "G" policy, not an "F". The only difference is that the F covers the $147 annual deductible, the G does not. It's still an increase but not quite as much.

The pricing for these policies is really bizarre with wide variations from one insurer to another. Since Medicare supplement policy coverage is not a question of being in network or not (unlike Medicare Advantage plans) I do not understand why there is such a variation in policy pricing. I also do not understand why one would pick any offer other than the cheapest one? It's not obvious to me what the extra value is for additional premium paid.

 

[Chuckanut]

I also do not understand why one would pick any offer other than the cheapest one? It's not obvious to me what the extra value is for additional premium paid.

Possibly the lack of International coverage might be an issue.

Or, what about coverage of care not covered by Medicare?

I am as confused as anybody.

 

[ejman]

Possibly the lack of International coverage might be an issue.

Or, what about coverage of care not covered by Medicare?

I am as confused as anybody.

No, Both G and F cover exactly the same ( International and care not covered by Medicare seem to be identical) The only difference I can see is that F covers the $147 deductible and G does not. Amen to being in the confusion department.

 

[MBSC]

Asking members to respect this request and get back on topic, which is why a MediGap F policy would increase price by 17%.

Medigap 'F' pays the Part B deductible which is increasing from $147 to $223 in 2016, so $6.33 of the monthly increase is to cover that. The Part B fee schedule (allowable amount) is changing, generally resulting in slightly higher payments. Since Part B only pays 80%, the remaining 20% left for the supplements to pay is increasing.

'F' is generally more expensive than 'G'+deductible because it's on the 'guaranteed issue' list after initial enrollment. This means 'F' has to accept high users of medical services. 'G' can pick and choose healthy members after initial enrollment.

 

[ejman]

Medigap 'F' pays the Part B deductible which is increasing from $147 to $223 in 2016, so $6.33 of the monthly increase is to cover that. The Part B fee schedule (allowable amount) is changing, generally resulting in slightly higher payments. Since Part B only pays 80%, the remaining 20% left for the supplements to pay is increasing.

'F' is generally more expensive than 'G'+deductible because it's on the 'guaranteed issue' list after initial enrollment. This means 'F' has to accept high users of medical services. 'G' can pick and choose healthy members after initial enrollment.

Thank you. Now we are getting some place. Does this mean that if we sign up for the G coverage, next year at renewal time the insurance company can deny our application based on "high use of medical services"?

 

[MBSC]

Does this mean that if we sign up for the G coverage, next year at renewal time the insurance company can deny our application based on "high use of medical services"?

No, it only means if you initially enrolled in something other than 'G' (such as 'F' or Medicare Advantage and had high use there), the 'G' can deny your application request because it's subject to medical underwriting. But once accepted into 'G' or any other Medigap plan, it is guaranteed renewable regardless of health issues as long as premiums are paid on time.

If you live in a guaranteed issue state, such as NY or CT, you cannot be denied at any point.