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Adam, I just got an letter from my Medicare Supplement company saying that my rate is going up but I didn’t even go to the doctor last year.  Why is my rate going up when I didn’t use my policy?

First, I’m glad to hear that you are staying healthy.  Secondly, it is illegal for Medicare Supplement rates to change based upon your personal health.  So, the rates will not increase if you are sick and going to the hospital or they will not stay the same if you are healthy.  Companies must justify their rate increases.  A Medicare Supplement company will change their rates based upon numerous factors including inflation, changes in Medicare charges and higher than expected claims.  Any changes in rates must be submitted and approved by the Department of Insurance for that given state.  In Mississippi the maximum increase in rates is capped at 25% with most companies increasing between 7-15% annually.

It is also important to remember that you can change your Medicare Supplement at any time.  So, whenever you get that increase letter it should serve as a reminder to check with your agent and have them run a free rate quote for you.  One of nice things about being an independent agent is that we have several options to choose from and you are not “stuck” with your high premium so long as you can answer the health questions.