Q: I have a Plan F to supplement my Medicare benefits. I like the coverage, but premiums have risen to the point that it is now unaffordable. What are my alternatives? Robert R.
A: Good question. Your alternatives will largely depend on your health. Assuming you still enjoy good health, you may make application for any of the alternate plans currently available. If you do not wish to modify the coverage afforded with a Plan F, you will want to consider the high deductible version. The High Deductible Plan F offers exactly the same benefits as a standard Plan F, but is subject to a $1,650 calendar year deductible for year 2003. The advantage is the premium savings. In some cases it is substantial enough to offset all or the majority of the deductible. I look at it this way: if you do not use the coverage, you pocket the savings. If you do access the coverage you pay your provider instead of the insurance company. Once you have met the deductible, the policy responds exactly like the standard Plan F.
Q: My insurance company offers a guaranteed premium for one year. The problem is they appear to be on shaky ground financially. I am concerned that the renewal premium will rise substantially. My agent has indicated that the projected increase could be as high as 40 percent. He has presented me with an alternative quote from a reputable company. Should I move now or wait until I am notified of a rate increase? Kathy S.
A: If premiums are paid annually, most companies will postpone rate increases for one year. I have found, however, that the rate increases always catch up. Unless you are in your open enrollment period or you are subject to guarantee issue provisions, an insurance company has the option to ask medical questions before accepting you as an insured. If you remain in good health, waiting to move to another company should not be a problem. But even a slight variance in your health could prevent you from being accepted by another carrier. You may have no alternative at that point but to absorb any rate increases presented by your current insurer.
Peter Gulatto has been associated with the insurance industry for more than 30 years. He has held a Certified Insurance Counselors (CIC) designation since 1983. His responsibilities have included those of an insurance agent, risk manager, consultant and insurance educator. His interest now is focused on providing answers to the insurance challenges facing our senior population.
Submit your questions to Peter J. Gulatto c/o The Centurion Group Inc. P.O. Box 3333, Rockford, IL 61106, or call at 815-229-0994.