Medicare Supplements to Change in 2010

By the time June 1, 2010 rolls around, there will be new changes to
Medicare supplements that will make people's heads spin in confusion.

Although there will be several changes to Medicare supplements, one
of the largest wholesale change will be the existing Medicare
supplement plans A through G being dumped. This will be what is
referred to as the "old" Medicare supplements. Here is the confusing
thing. There will be (what is going to be dubbed) the "new" Medicare
supplement plans A through G, and – well – they are exactly the same
supplements as the "old" ones.

No one is quite certain why the government would come up with this
particular idea, but it may have something to do with risk pools and
re-setting rates. However, more on that in a bit, after a short
discussion of risk pools. When the old plans are booted out and the new
ones come into play, each group of people will then be in what is
called a "closed risk pool." The ones in the old plans will be
grandfathered in, which might sound great, but their rates will likely
go up because they are in a closed risk pool.

The rates for any closed risk pool generally tend to be higher
because the pool of insured's is "closed" for business. Now here is the
interesting thing that may cheer up many Americans: when they initially
get a chance to take advantage of the fall out. Come June 1, 2010, when
the old goes out and the new comes in and two closed risk pools are
created, insurance companies are going to reset rates because of the
fierce competition that will result for health insurance customers.

So there may be some terrific deals to be had when this happens. The
question will be how long the rate wars will continue and what will be
the outcome later. It's hard to guesstimate what the Medicare
supplement insurance market will do in terms of costs for premiums.

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