Should I Pay My Medicare Supplement Premiums Annually?
When it comes to paying your Medicare Supplement premiums, you have options. You can pay monthly, quarterly, or annually, and you can pay via check or automatic bank draft.
But is there any advantage to paying your premiums a certain way?
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Medicare Supplement Premium Payment Options
When you sign up for a Medicare Supplement plan, you’ll have some options for paying your premiums.
You can pay monthly, quarterly, semi-annually or annually. In addition, you can choose to pay via an automatic bank withdrawal or by a paper check. However, you cannot pay by check if you choose to pay monthly.
Back in the day, you could actually pay with a credit card, but that has since changed. We don’t know of any Medicare Supplement carriers anymore who allow you to pay premiums with a credit card.
Avoid Mid-Year Rate Increases by Paying Annually
There is a big advantage to paying your Medicare Supplement premiums annually: you will avoid any mid-year rate increases!
If your Medicare Supplement carrier crunches the numbers and decides to implement a statewide rate increase partway through the year, you’ll skip right over it because you’ve paid your premium for the entire year.
That rate increase would not impact you until the following year.
Related: What Do I Do When My Medigap Plan Has a Rate Increase?
Earn Small Discounts by Paying via Auto-Draft
There is also an advantage to skipping the paper checks and paying your premiums by automatic bank withdrawal: you may earn a premium discount.
The biggest lapse ratio for any insurance company is a quarterly direct bill. That’s four paper checks you need to write in a year, and there’s a chance you could forget, or maybe the check gets lost in the mail.
When your premiums automatically come out of your checking account, it’s a sure thing, and the insurance companies appreciate that.
That’s why many Medicare Supplement companies reward the policyholder for choosing automatic bank withdrawal. You may enjoy a slightly lower premium or a discount on your premium if you choose auto-draft as your method of payment.
There you have it – arguably, the best way to pay for your Medicare Supplement is an annual bank withdrawal.
We hope this little tip helps you avoid mid-year rate increases and perhaps even save a little bit on your Medicare Supplement premiums.
If you have any questions, just give us a call at 217-423-8000. We look forward to serving you!
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