Question: I’m going to be turning 65 in 6 months and plan on enrolling in Medicare so that it begins the month I turn 65. What do I need to consider when choosing a Medigap plan in New York?
Answer: You should consider your current medical needs, what you can afford, and strategy.
New York does not have medical underwriting for people who have maintained creditable healthcare coverage. This means that if you haven’t exceeded 63 days without creditable health insurance, the insurance carrier cannot consider preexisting conditions.
Translation: You can change from one Medigap plan to another Medigap plan 365 days per year.
For example, let’s say you have a Medigap plan and find out that you will need major surgery. If you feel that a different Medigap plan would better suit your needs, you can switch Medigap plans at any time. If you later decide that you want to go back to your original plan, you can do that as well. You can also change insurance carriers the same way.
What does this mean to you? Unlike in most states which do have underwriting, you can purchase the Medicare Supplement (Medigap) plan that is right for you now. If you’re healthy and rarely go to the doctor, you may want to choose a Medigap Plan N or High-Deductible Plan G. As you get older and incur more health problems, or if you are diagnosed with some dread disease like cancer, you may want to change to a Plan N or Plan G.
In states where underwriting exists, the only time that someone can get any Medigap plan they want without underwriting is during the Initial Enrollment Period or during the Special Enrollment Period after enrolling in Medicare Part B. If they later develop a medical condition and decide they want to change plans or insurance companies, they may not be able to do so. Therefore, in these states, people enrolling in a Medigap plan need to consider:
- The plan they will want in the future - 5, 10, or 20 years from now when they are ill or need more access to medical care and doctors and hospitals.
- The historical rate of premium increases for the insurance carriers they are considering.
- What can they afford in premiums now, and in the future. Which plans are likely to have the lowest rate increase.
- The length of time the company has been in the Medigap business in their state.
- The company’s insurance rating by A.M. Best and other rating companies.
Since we can switch Medigap plans and companies at any time in New York, we don’t have to be concerned about these issues. Premiums in New York are typically 2-3 times that of states which have underwriting, so it makes sense to employ a strategy that utilizes the advantages we are paying for.
Key Take-away: Don’t leave money on the table. Strategize!