Iowa retiree's Medicare supplement bill falls from $726 to $515 after billing mistake is discovered

"It was such a weight lifted."

A TV news report uncovered an insurance mistake that had driven up the monthly Medicare supplement premium for a retired Iowa teacher. Her bill has now been corrected.

The error affected dozens of policyholders, including retired Council Bluffs schoolteacher Geri Frederiksen.

Here's what to know

According to KMTV, Frederiksen had been told her monthly premium would climb from $468.83 to $726.03.

That would have required her to find an extra $257.20 each month to keep her Medicare supplemental coverage.

Her updated monthly premium is $515, which is about $46 more than what she had been paying before.

Mutual of Omaha admitted the mistake after contacting Frederiksen following KMTV's initial report. The company said a system problem affected 92 Medicare Supplement customers in Iowa.

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Mutual of Omaha said it provides this coverage to about 18,000 customers in Iowa and roughly 1.3 million nationwide.

More background

Frederiksen told KMTV she had tried to find supplemental coverage elsewhere, but other insurers would not cover her because of a chronic lung condition.

She also looked into Medicare Advantage, though she was unsure whether it would meet her needs.

"I had always been told that — for me — it was not a good choice, but I was thinking that was a possibility," Frederiksen told the station.

In a statement to KMTV, Mutual of Omaha said Medicare Supplement premiums can rise because of higher medical costs and claims patterns for similar policies.

Still, the incorrect changes for these 92 customers came from a system issue, the company said.

The insurer also noted that federal law ended standardized Plan F coverage for people first becoming eligible for Medicare in 2020 or later, a change that affects the entire industry.

What's being done?

Mutual of Omaha said it was working on refunds for any overpayments and corrected premiums for the customers it identified as affected.

"We sincerely apologize for the error and the concern it caused," the company said in a statement.

Customers outside the affected group did not need to take any action because of the issue, according to the insurer. Frederiksen will be able to keep her existing supplemental plan at the revised premium.

The Area Agency on Aging urged people comparing Medicare coverage options to consult a counselor with the Health Insurance Information Program.

Counselors can help guide people through choices such as supplemental coverage and the Medicare Advantage option Frederiksen had considered.

Frederiksen's reaction to the change was clear.

"Oh, my goodness," she told KMTV. "The relief — happy — it was such a weight lifted. Yes, I was thrilled."

Where can I learn more?

A premium increase can be especially difficult to handle when health conditions limit a retiree's options for switching Medicare coverage.

• A Florida enrollee's Plan N premium jumped 25%, prompting suggestions to switch while they were healthy.
• In Florida, a couple seeking a high-deductible Plan G encountered an agent's scare tactics.
• A Medicare shopper said a broker discouraged guaranteed issue coverage before his denial.