Medicare Supplement Tax
The President recently allocated a large portion of his budget to Medicare and the Medicare Supplement Taxes. The plan is to increase the cost of certain Medigap policies to reduce the amount of people who want to pay for first dollar coverage. Certain members of Congress who have tried to get this passed for several years are pleased that it slipped into the President's proposal for the budget.
Medicare Supplement Taxes - Why?
Most people wonder, "Why would you impose a Medicare Supplement tax on seniors who are trying to purchase insurance policies to fill in the gaps of Original Medicare?" The reason the government is pushing this is because they feel first dollar coverage causes more people to go to the doctor for any minor thing. This may be true for some. On the other side of the coin, people who do not have first dollar coverage and don't go to the doctor or hospital may have more acute conditions that end up being more costly in the long run. The Medicare Supplement Tax will amount to 15% of the average Medicare Supplement Premium, which equates to 30% of the Part B Premium.
What are my options?
There are several options to avoid this Medicare Supplement Tax.
- Enroll in a Plan G instead of a Plan F. First of all the premiums are lower. Secondly, the only difference between a Plan F and G is that the Part B deductible ($147 - 2014) is missing. There is a good chance the tax will be more than the $147 deductible.
- Enroll in the BAI group medical plan that mimics the Plan F Medicare Supplement. It does not ask health questions. Plus, it avoids the surcharge tax. This means that your premium will be an average of 15% less than the standardized Medicare Supplement. To enroll in this plan you can call 1-877-936-2991.
Choosing a Medicare Supplement is more complicated than it was 10 years ago. Now you are required to enroll in a Part D plan. You have to check the stability of the carrier you are enrolling in to make sure they are not going to give you a low rate the first year, then raise the rates by 16% the second year. Also, be aware of a potential Medicare Supplement Tax. Call us at 1-877-936-2991 with any Medicare Supplement related questions.