Arizona Medicare Supplement Policies (Part 1)

Original Medicare is a federal health insurance program. Medicare Part A relates to hospital, Part B to doctor, and Part D to prescription drug coverage. Those enrolled in Original Medicare may choose to purchase a Medicare supplement policy from a private insurer or enroll in an Advantage plan. With a Medicare supplement plan the federal government remains the main insurance company, the private insurer covering expenses such as deductibles, co-pays, and co-insurance that Medicare requires. Advantage plans are much different. The federal government pays a private insurer to assume all covered medical expenses of the individual enrolled in an Advantage plan. The goal of any Advantage plan is to keep the enrollee’s expenses below the amount the federal government has paid the insurance company to assume all liability.

18% of Arizona residents are enrolled in Original Medicare which equates to 1.4 million people. For the majority of individuals, enrolling in Medicare is something to be completed when turning 65. There are other circumstances though which likely qualify for enrollment at any age such as those suffering from a disability lasting at least 2 years, ALS, or kidney failure. In Arizona, approximately 10% of those enrolled in Medicare have a disability, while nationally the figure is 13%.

45% of Arizonans enrolled in Medicare have an Advantage plan, the remaining enrolled in a Medicare supplement plan. Arizona does not require private health insurance companies to offer Medicare supplement policies to those under the age of 65 on Medicare. When it comes to Medicare supplement plans there are, as of 2021, 65 private insurers selling such plans. When shopping for an Arizona Medicare supplement plan there are only two things to consider… company reputation and price. This is because, per federal law, all lettered plans must be identical. As an example, all G plans, no matter which of the 65 insurers selling the G plan, must offer identical G coverage. Same goes for all the other lettered plans. The reality is that pricing is nearly identical as well, which really leaves just one consideration when shopping and comparing Medicare supplement plans in Arizona… company reputation.

By the way, if there is a huge difference in price for the same plan from one insurer to the next a red flag should pop up in your mind. The question to ask yourself is how can this be? All Medicare supplement insurance companies are attempting to insure the exact same risk pool, are offering the exact same product (by law) and each for-profit carrier typically makes between 1%-3% profit each year. So how can one or two particular insurers charge $20 or $30 dollars less per month than the other guy? They can’t. What they can do is charge $20 or $30 less each month the first year and make up the difference the following years through steeper premium increases, knowing a majority of policyholders won’t switch to another carrier. Non-profit insurers such as Blue Cross and Blue Shield of Arizona charge what it costs to insure an individual each year without the worry of generating profit, which is why their premium rates are stable year after year.

Plans offered are A, D, G, and N, and G is the way to go. BCBSAZ Senior Security Plan G offers the richest benefits and access to the vast majority of Medicare contracted providers in the country. G plan pricing is not that much more than other plans yet offers much more coverage.