How to Choose a Medicare Supplement Broker
And Avoid Costly Mistakes
Your complete guide to the five ways to purchase a Medicare Supplement, the questions you should ask before buying, and how to avoid paying more than necessary as you get older.
Introduction: Why Choosing the Right Broker Matters
Choosing a Medicare Supplement is one of the most important financial decisions you'll make when you enroll in Medicare. But there's something many people overlook.
Who you buy your Medicare Supplement from can be just as important as which insurance company you choose.
Let me explain why.
When most people first enroll in Medicare, they're concerned about three things: which plan they should purchase, which insurance company they should choose, and how much their monthly premium will be.
Those are important questions. But there's another question that could be even more important over the long run.
Who's going to look after you five, ten, or fifteen years from now?
Medicare Supplement premiums generally increase over time. The insurance company offering an attractive premium when you're 65 may become considerably more expensive by the time you're 75 or 80.
Unfortunately, many people purchase their Medicare Supplement and never hear from their insurance agent again.
They continue paying their premiums year after year, often without realizing that another insurance company might offer comparable coverage at a substantially lower price.
And here's where things can become particularly difficult.
In most states, once your initial Medigap Open Enrollment Period and other applicable enrollment protections have expired, changing insurance companies may require medical underwriting.
That means an insurance company can review your health history and, in many circumstances, decline your application.
By the time you discover that you're paying too much, your health might prevent you from changing insurance companies.
That's why I believe your relationship with your Medicare Supplement broker deserves serious consideration.
A Real Example of What Can Happen
Let me share an experience involving a couple who were referred to me.
The husband was 75 years old and paying $632 a month for his Medicare Supplement Plan F.
His wife was 71 and paying $532 a month for Plan G.
Together, they were spending $1,164 every month on their Medicare Supplements.
During our conversation, I asked the husband a simple question.
"Has your insurance agent ever called you to review your coverage?"
His answer was no.
Fortunately, both were healthy enough to qualify for new coverage. After reviewing their options, we were able to move them to new policies.
Their combined savings exceeded $10,000 a year.
Think about that.
More than $10,000 a year in premium savings.
Of course, their situation isn't typical of everyone. Changing coverage can involve different benefits, out-of-pocket costs, and underwriting requirements. Savings are never guaranteed.
But their experience illustrates something I've witnessed repeatedly during my years in this business.
People purchase Medicare Supplements and assume their insurance agent will contact them if something needs attention.
Unfortunately, that doesn't always happen.
The lesson is simple.
Don't just shop for a Medicare Supplement
Shop for someone who will help you manage that supplement for years to come.
Let's examine the five primary ways people purchase Medicare Supplements and the advantages and disadvantages of each.
Part 1: The Five Ways to Purchase a Medicare SupplementHeading 2
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What are Medicare Excess Charges?
Medicare excess charges are additional costs that may occur when a healthcare provider charges more for a medical service than the amount approved by Medicare. In the United States, Medicare sets a specific payment amount for each covered service or procedure, known as the Medicare-approved amount (also called Medicare assignment). This amount is based on a fee schedule established by Medicare. When a healthcare provider accepts Medicare assignment, they agree to accept the Medicare-approved amount as full payment for the service provided and will reduce the bill to that amount. However, some healthcare providers may choose not to accept Medicare assignment and can charge more than the Medicare-approved amount. These additional charges are referred to as Medicare excess charges.
If your doctor does not accept assignment, then they may charge up to 15% more than the approved amount.
Comparing Doctor's Bills with & without Assignment
Doctor that Accepts Assignment
Does NOT Accept Assignment
Doctor's Bill
Approved Amount
Medicare Pays 80%
Your Coinsurance 20%
Your Total Bill
$1500
$1000
$800
$200
$200
Doctor's Bill
Approved Amount
Medicare Pays 80%
Your Coinsurance 20%
Excess Charges
(15% of approved amount)
Your Total Bill
$1500
$1000
$800
$200
$150
$350
*Note on deductibles: The annual deductible was excluded from this example. The deductible amount would have to be met first before benefits begin.
**Note on Supplements: If you have a supplement plan, it may cover the cost of your annual deductible, coinsurance, and/or excess charges depending on your supplement plan (meaning your bill could be as low as $0).