Welcome back to “New to Medicare!”
Welcome to Part 7 of the series, “New to Medicare,” which I’m writing to help those who will be going on Medicare Part A, B, or both for the first time in the near future.
This Week’s Question
What are the most important considerations when choosing an Advantage Plan? Which plans and companies are the best?
Supplements vs Advantage Plans
Those going on Medicare Part B for the first time need to make sure they understand the differences between both Supplements and Advantage Plans as well as the pros and cons of each, which I have discussed in earlier editions of the series. Failure of educating oneself makes it much more difficult to choose the plan or plans that offer the greatest value. If you’re new to the series, I suggest going to our website and reading the first six. You can also listen or watch the podcast and webcast versions.
Choosing an Advantage Plan can be a much more complicated than a Supplement because there are eight companies that offer them in Western PA and approximately 80 total plans to choose from vs only nine available Supplement options.
And unlike Supplements where every plan of the same letter has identical benefits and out of pocket costs regardless of what company sells it, that’s not the case with Advantage Plans. Co-pays and out of pocket costs can vary quite widely among plans and companies. For example, one might have a co-pay for a 6-day or longer hospital stay as low as $300, while another $1,800. Two people who needed the same type and amount of chemotherapy could pay as much as $3,500 more or less than one another.
What do we want in an HMO or PPO?
Once someone has determined they prefer the Advantage Plan option, the most important considerations and what we want in an HMO or PPO for our clients are the following: Premiums as low as $0 and but not to exceed $50 per month; A per stay hospital co-pay. In other words, a flat fee no matter how many days one is an inpatient. A per stay co-pay in the $300 range is what my favorite plans have; A lower Maximum Out of Pocket (MOOP), which represents the most money one could be billed in a calander year. MOOP’s range from $4,000 to $7,550; Generous ancillary benefits such as comprehensive dental, a free routing eye exam and allowances for eyeglasses of at least $150, OTC benefits that provide an allowance to spend on items that can generally be found on the shelf at a drug store.
Another important consideration is the network of doctors and hospitals that are available. Not all eight companies that sell Advantage Plans in our area provide access to both Allegheny Health Networks and UPMC. In addition, insulin dependent diabetics may need choose a plan that participates in the Senior Savings Model which guarantees no more than a $35 co-pay for insulin that is on a plan’s formulary. Only one of the companies we normally recommend to our clients participates.
I’ve mentioned this in previous columns. When it comes to Advantage Plans, paying more doesn’t at all guarantee lower co-pays or out of pocket costs. Except on a rare occasion, it’s my opinion that paying $50 or more in monthly premiums doesn’t provide any additional value. In fact, most of the higher priced plans don’t even provide the lowest MOOPs. And some, in fact, have the highest! I find it unexplainable that in some cases companies can charge more and provide less protections and benefits.
Here’s another example of why paying more than $50 for a plan almost never makes sense. The two most likely ways someone on an Advantage Plan could meet their MOOP is if they needed Chemo, injection therapy, or infusion therapy. Regardless if a plan has a premium of $0 or $300, the cost of all three of those treatments is 20% of the billable amount to the insurance company.
It’s my opinion that Advantage Plans could use a few more regulations. If I were in charge of creating them, the first I would implement is that no plan can have a premium higher than $100 per month. Insurance companies know there are plenty of Medicare beneficiaries, especially the elderly, who will not change plans, even after premiums have gone up as much as 500% over the years. They fear changing to a lower priced plan could result in tens of thousands of dollars in bills in the event of a heart attack or hospitalization. I find it very troubling that some companies have gotten away with charging exorbitant rates over the years.
As far as the best plans, those that meet the criteria I listed previously are in my professional opinion. We typically only write plans with three companies, which per regulation, I can’t mention by name in any column, podcast, webcast, or Facebook post. When all things are equal as far as benefits and premiums are concerned, we prefer our clients choose a company that provides the best customer service. In that regard as well, not all are created equal.
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.
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Erie, PA 16501
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Connellsville, PA. 15425
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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
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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.