Medigap question

[Ariadne22]

Originally Posted by Ariadne22

So, your real issue is should you switch from the NEA retiree Plan N you currently have a $82/mo. which has experienced no rate increases in two years to a different retiree plan N at $111/mo. with a cap on age-based rate increases at $140 at age 70?

How old are you?

Originally Posted by Spaceman1999

I will be 70 in a little over a yaer.

Originally Posted by Spaceman1999

I should add that as of right now the NEA plan is $140 at age 70. That is the end of the age increases.

Originally Posted by Spaceman1999

No, the exact opposite. Should I switch from $82 N plan to the $111 NEA plan which is aged capped at 70? The $82 plan uses goes up every year by age.

So, to restate, your real issue is should you switch from the NEA retiree Plan N you currently have at $82/mo., which does experience increases, to a different retiree plan N at $111/mo. which hasn't had rate increases in two years and which also has a cap on age-based rate increases at $140 at age 70.

So, are you being told even though the rate this year is $111 for the new plan, next year when you turn 70 the rate will definitely jump to $140 and not increase thereafter, except for inflation? That seems an excessively high increase over two years.

• Going from $82 to $111 is an immediate increase of 35%.
• Going from $111 to $140 is another increase of 21%.

In other words, if you choose the new plan, the increase in premium in a little over a year will be 71% ($82/$58 [$140-$82=$58] = 71%).

Next question is - what rate increases have you been experiencing on your current plan over the past four years?

Even if your current plan is experiencing 10% annual increases (i.e., $8/mo), you would not approach $140 for at least five years - which means meanwhile you will be paying $348 more next year for new Plan N, and at least an additional $696 ($29+$29x12) a year more for another four years, or total of $3,132 ($348+$2,784($696x4)) over the next five years to secure that $140/rate.

Deduct from the $3,132 your projected premium increases on your current $82/mo. plan -

2020 - 96 x 5 = 480
2021 - 96 x 4 = 384
2022 - 96 x 3 = 288
2023 - 96 x 2 = 192
2014 - 96 x 1 = 096
.................. $1,920

or possibly $1,920 increase, for a net overpayment of $1,212 ($3,132-$1,920) over the next five years.

If your current plan is experiencing less than 10% increases a year, the numbers get even worse.

Unless the increases in the current plan have been very high, it appears to me you are better served keeping the plan you have. It's gonna be a while before you break even.

[Spaceman1999]

I am not in the NEA plan yet. That is the plan I am looking at. I am in a plan N right now. I have only been in this plan for about a year. I came from a plan G. I am trying to see if locking in a plan with no underwritng is worth it with no age increases. Next year the NEA plan is $113. Then it goes to $140. I have no idea what the rate increase for my current plan will be. In the plan G from Aetna I previously had, the increases were almost 10% a year.


The NEA plan only has age increases from age 65 to 70. The plan looks like this:
Age 65-$102
Age 66-$104
Age 67-$107
Age 68-$111
Age 69-$113
Age 70-$140. Subtract $2 for automatic bank draft.



I realize that I will be under water for a while. I know that the AARP plan stops discounts at age 77. Then just inflation increases. This plan seems to be better than the AARP plan since the premium difference is less than $20 at age 70.



I will have $113 for next year, then $140.



I am just a little nervous since the Aetna plan was going up so fast from a much higher base. If my current N only went up 5% a year I woud take a long time to catch up. I did find that my current plan went up 10% last year. I am also worried that if they close this group so no new people come in all bets are off.



It is very difficult to predict the future. Thanks for your insight.

[Ariadne22]

Originally Posted by Spaceman1999

I realize that I will be under water for a while. I know that the AARP plan stops discounts at age 77. Then just inflation increases.

I did find that my current plan went up 10% last year. I am also worried that if they close this group so no new people come in all bets are off.

The numbers in the above post were based on 10% increases. Since your current insurer imposed a 10% increase last year, assume that continues. Therefore, my analysis above pretty much reflects your situation.

Who is your current insurer and is your current insurer pricing the plan at attained age? With 10% increase last year, one has to assume the policy is an attained-age plan. If so, expect rate increases will continue to be aggressive and they will close the group. Again, who is this insurer?

You could risk holding off on any change right now, hoping you can pass health underwriting later for a UHC community rated plan when you are older. Otherwise, any move you make now will mean you are paying at least a $1,000 premium for the $140 guarantee.

If you have no health issues and can pass underwriting, consider purchasing a high-deductible F plan, instead. Premiums are half that of a full Medigap and premium increases are very small, bordering on teeny. Yet, you have all the provider flexibility and protections of a full Medigap when you need it. Many here have the high deductible plan.

[Spaceman1999]

I just got on. I looked at the UHC plan but it would only be cheaper for a couple of years. As soon as the 3% discount started disappearing, the NEA and UHC would be about the same after about 4 years. After five years the UHC would start to climb much faster. I will probably ride out my attained age policy for another couple of years. As long as NEA does not get rid of the open enrollment I could come back to it. High-deductible F is not really appealing. Thanks for your help and ideas.

[Gallina57]

Originally Posted by Spaceman1999

I just got on. I looked at the UHC plan but it would only be cheaper for a couple of years. As soon as the 3% discount started disappearing, the NEA and UHC would be about the same after about 4 years. After five years the UHC would start to climb much faster. I will probably ride out my attained age policy for another couple of years. As long as NEA does not get rid of the open enrollment I could come back to it. High-deductible F is not really appealing. Thanks for your help and ideas.

I've been following this thread and looking at the NEA premiums vs UHC. Something for you to consider with UHC is that they are changing how the discount works effective 1/1/2020. From what I can tell, the discount at 65 will be 39% and will stay there for several years before it starts backing off by 3% per year. So the discount doesn't totally go to -0- until about age 82. Try pricing your plan N effective 1/1/2020 to see the result. No word yet on whether there will be a general increase for 2020 in Ohio, but as of 1/1/2020 they are still using the same full rates with the new discount scheme at their website.

Since you can apply to change a Medigap at any time (other than the NEA plan apparently), you'd do well to wait if you are interested in UHC at some point. Just an FYI!

[Spaceman1999]

ThnaksI will check it out after Jan. 1. That change would make a big difference. Thanks again.

[Ariadne22]

Indeed, as Gallina57 has observed, UHC has amended its discount methodology, now extending more attractive discounts through age 81 for certain new enrollees. UHC still offers its standard discounts (through age 77) for those presently insured and new enrollees not qualifying for the new program.



Thanks to SCGamecock, here is the link for Ohio showing 2020 rates:

https://www.aarpsupplementalhealth.c...ment_Kit_C.pdf

Spaceman, if you go to page 15, you can see, at age 70, your rate for an N would be $109.28, age 75 - $140.11 (today's dollars), etc.

It appears this change allows UHC to offer its policies at more attractive lower rates for a longer period of time to newer enrollees.

For those who want to check rates in their state, just change OH in above link search bar address to your state abbreviation.

[Spaceman1999]

I checked out those new rates. They make UHC much more attractive. Thanks.