Jan 042013

Oregon Medicare supplement plans have a new birthday rule that went into effect for 2013.  Each state can regulate certain aspects of the Medicare supplemental insurance.  In Oregon insurance companies will now be required to provide guaranteed issue for residents that have purchased a Oregon Medigap Plan for the month of that person's birthday. This will enable people with medical conditions that would previously be prevented from changing insurance companies the opportunity to change companies during their birth month.

Typically when a person turns 65 they will purchase a Medicare supplement plan to protect themselves from the gaps in Medicare coverage.  Then, over the years these Medigap plans slowly go up in price.  Some insurance companies end up charging more more for the same plan depending on various issues that effect the cost of doing  business.  This may not be a problem for many seniors as they can easily seek out a less expensive Medicare insurance company.   But there are many seniors that develop certain health issues that prevent them from making it through the underwriting process which intern prevents them from purchasing from a less expensive insurance company.  Now every year people who live in Oregon can switch to a less expensive insurance company during the month they were born regardless of their health.  The only requirement is that they have to purchase a Oregon Medicare supplement plan with the same or less coverage.

The new Oregon Medicare supplement birthday rule is a win and a loss

For many the new Oregon Medicare supplement birthday rule will be a great benefit as they will be able to leave their current insurance company for a less expensive one.  On the other hand some Oregon residents will end up paying more for their Medicare supplement insurance because of the new rule.  Because insurance companies that have lower premiums will now be forced to take on new clients that have higher medical bill they will have to raise the premiums on everyone to cover the additional cost.  So the long term effect on the Medigap market will be a flattening of premiums.  Senors who were previously enjoying the savings of sharing risk with healthier people will have to pay more as those with higher health risk will now be able to move into their insurance pool.

This new rule does not effect moving from a Medicare Advantage plan into a Medicare supplement Plan.  Medicare Advantage plans often have cheaper monthly premium, but with higher the out of pocket costs and less freedoms than a Medigap plan. Senors should think twice before leaping out of a Medicare supplement into an Advantage plan.  The move could later be regretted as it might not be possible to get back into a Medicare supplement.

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