Welcome back to “New to Medicare!”
Welcome to Part 4 of the series, “New to Medicare,” which I’m writing to help guide those who will soon be going on Medicare Parts, A, B, or both for the first time.
In Part 2, I discussed how Medicare Supplements and Advantage Plans differ as far as coverage, premiums and out of pocket costs, access to doctors and hospitals, and how claims are approved and paid. I suggest reading that column again prior to this edition. It and the others in the series can be found on our website along with podcast and webcast versions as well.
This Week’s Question
What are the pros and cons of both Medicare Supplements and Advantage Plans?
All about supplements
This week will be dedicated to Supplements and Part 5 will continue next week when we will do the same with Advantage Plans.
Supplements, aka Medigap policies and are highly Federally regulated and have been around almost as long as the Medicare program itself. They’re designed to pick up the portion of the bill not fully covered by Medicare, namely the Part A hospital deductible of $1,484 and the 20% Part B doesn’t pay.
The simplicity of how they work, the ease of making one’s choice in plan and company, as well as the peace of mind they offer are very nice benefits. Supplements can only be sold with Plan letters labeled A through N. There are only 11 choices, nine for those who turned 65 after January 1st, 2020. All plans cover the same exact medical benefits and provide the same access to doctors and hospitals. With very few exceptions, our agency recommends just two letters, G and N, which expose those who choose them to very few bills. The only medical costs those on Plan G are responsible for is the annual Part B deductible of $203. Plan N has the same deductible and just two small co-pays, a physician’s office co-pay of $20, and an Emergency Room co-pay of $50. God forbid someone has a diagnosis of Cancer and needs scans, a surgery, chemo, and/or radiation, etc., there is no worry about getting inundated with bills for those with Supplement Plan N or G.
Supplements provide nationwide access to doctors and hospitals. Not only is there access to all health systems here in the Pittsburgh, including our two largest and well known, UPMC and AHN, other world class facilities such as the Mayo Clinic, Cleveland Clinic, John’s Hopkins, and MD Anderson Cancer Center can also be used at no additional cost. I’ve had several clients whose lives were saved because they were able to get care at these hospitals.
Maybe the number one reason to choose a Supplement in my opinion is an aspect that doesn’t get talked about much. Supplement insurance companies do not get to make decisions on what’s covered. Medicare lets the patient’s treating physician determine what is medically necessary. If your doctor wants you to have an MRI or a surgery, it can happen immediately. There are no prior authorizations or need to wait for an approval before receiving services. In addition, if a doctor thinks it wise for a patient to stay an extra day or two in the hospital or Skilled Nursing Facility, there is no interference from an insurance company. Medicare lets the doctor steer the ship as I like to say.
Supplement benefits never change as long as one remains on the same plan letter. In other words, those who choose Plan N and live to be 85 years old will still be paying just $20 for doctor visits and $50 at the Emergency Room. Those can’t be increased. In addition, co-pays for other services can never be added. For example, in five years you can’t be told by the company that you’ll be forced to pay co-pays for MRI’s, X-Rays, or hospitalizations. It’s great piece of mind to know that now and in the future, there’s no prospect for large medical bills. Be advised that the Part B deductible does increase over time, but very mildly. In 2008, my first year in the field, it was $135.
The biggest negative
That brings us to the biggest negative of Supplements, cost. They generally have higher premiums than Advantage Plans, starting at $75 to $100 per month for a 65-year-old, depending on zip code, gender, and marital status. They increase as one ages. I mentioned living to be 85 years old. Those who do can expect to be paying $200 to $250/month or more by that time, not including a separate Part D prescription drug plan, which most on Supplements need to purchase at an additional cost of around $15/month on average.
And these Stand-Alone Part D plans, as they are called, generally have annual deductibles of $445 for Tier 3, 4, and 5 medications that must be paid before those drugs are covered. There are no deductibles on medications with Advantage Plans.
Supplements don’t come with ancillary benefits such as cosmetic dental, hearing, vision, and gym memberships like Advantage Plans. Although Medicare and a Supplement cover medical conditions of the ear, eye, and mouth such as Cataract, Gluacoma, Macular Degeneration, ear infection, eye infection, broken jaw, etc., they do not cover cosmetic services such as teeth cleanings, fillings, root canals, routine eye and hearing exams, glasses, hearing aids, etc.
Another negative of Supplements is six months after one’s initial Part B effective date, these companies use Medical Underwriting to determine if they will accept someone into their plans. That means current and previous medical history can keep someone from enrolling. Generally, the only time one can ever get on a Supplement, regardless of health is within six months after enrolling in Medicare Part B. This is why it’s so important to understand the ins and outs of both types of plans. Although Supplement premiums can never be raised or cancelled on an individual basis, those who start with an Advantage Plan may never be able to enroll a Supplement once diagnosed with certain medical conditions including but not limited to heart disease, certain cancers, auto immune disorders, A-Fib, Insulin diabetes, and COPD.
Please be advised
Please be advised that my columns and this series are not designed as a substitute for working closely with a licensed agent like those at The Health Insurance Store. The goal is to start the education process, not make a final decision. I recommend everyone call or email us to set up an appointment for a no cost consultation so your individual needs and concerns can be addressed. There is no one size fits all approach when it comes to choosing a Medicare plan. There are many factors that need to be considered before making such an important decision.
If you have any questions regarding this column or any other in the “New to Medicare” series or would like to set up an appointment for a no cost consultation, please call one of our offices or reach out to me personally at Aaron@GetYourBestPlan.com.
Erie County Area
1105 West 12th Street, Suite – A
Erie, PA 16501
Fayette/Westmoreland County Area
121 North Pittsburgh Street
Connellsville, PA. 15425
21 Yost Blvd., Forest Hills, PA 15221
Mailing Address: 128 Forest Hills Plaza, Pittsburgh, PA 15221
Albuquerque/Santa Fe, New Mexico Area
821 Coors Blvd. NW
Albuquerque, NM 87121
Serving These Areas
We proudly serve the health insurance and Medicare needs of the following Pennsylvania areas: Connellsville, Uniontown, Greensburg, Mt. Pleasant, Scottdale, Irwin, N. Huntingdon, Murrysville, Monroeville, Plum, Lower Burrell, New Kensington, Pittsburgh, Plum, Oakmont, Penn Hills, Forest Hills, Wilkinsburg, East Liberty, Lawrenceville, Bloomfield, Natrona Heights, Leechburg, Washington, Morgantown WV, Latrobe, Monnessen, Jeanette, Erie, Edinboro, Northeast, Girard, Fairview, Union City, Harborcreek, Corey, Meadville, Waterford, Ligonier, Kittaning, Somerset, Waynesburg, Fayette County, Westmoreland County, Armstrong County, Butler County, Somerset County, Erie County, Crawford County, Venango County, Allegheny Valley, Pennsylvania
We proudly serve the following New Mexico areas: Albuquerque, Rio Rancho, Sante Fe, Bernalillo, Belen, Los Lunas, Espanola, Moriarty, Corales, Tijeras, Cedar Crest, Edgewood, Soccoro, Sandoval County, Sante Fe County, Bernalillo County, Rio Arriba County, Valencia County, Soccoro County, New Mexico
Not affiliated with the U. S. government or federal Medicare program.
We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options.