Welcome back to “New to Medicare!”
Welcome to the last column in the series titled, “New to Medicare,” which is designed to educate those who will be going on Medicare Part A, B, or both for the first time in the near future. The entire series can be found on our website along with the podcast and webcast versions. Please be advised that this will be the last column that will appear in the Trib. You can continue to read future columns on our website or Facebook page. They will be uploaded every Monday.
This Week’s Question
After I pick my plan for the first time, is there anything I need to do? Do plans change year after year?
Answer
Be proactive!
One always needs to be diligent and proactive regarding their Medicare plans. The worst mistake that can be made by a Medicare beneficiary is initially picking a plan and letting it renew every year without having it professionally reviewed, something we do for every client during Annual Election Period (AEP).
Because Supplements are regulated to provide the same exact benefits year after year, the only real concern for those who go this route is to make sure their premiums are still competitive. The only change that can happen to Supplements, with the exception of High Deductible plans F and G which we never recommend, is to the Part B deductible. It goes up on average $5 to $10 per year. Plan N, which most of our clients choose, has two small co-pays, $20 for a PCP or Specialist visit and $50 at the Emergency Room. Those can never be increased as long as the policy remains active. Nor can any other co-pays be added down the road for other services. What this means is those who live to 90 years old and still have Plan N will only be paying the deductible, $20 for a physicians visit, and $50 at the ER. Nothing else.
Advantage Plans can have both premium increases and changes in benefits, although in recent years there has been very little rise in premiums. Many plans have actually seen a decrease in costs as well as for some co-pays as competition in the HMO and PPO market has gotten pretty intense. I expect that to continue into 2022 and possibly 2023. In the last three years, we’ve also seen the addition of generous ancillary benefits that we hadn’t in ten years or had never existed before. Comprehensive dental and Over the Counter benefits which gives a member an allowance to spend on almost any item that can be found on the shelves of a drug store have been added to quite a few plan offerings. Be aware that not all plans provide the same level of ancillary benefits. The last two years, we have generally advised our Advantage Plan clients to choose only plans that provide the most along with lower overall co-pays and Maximum Out of Pocket (MOOP), which represents the most money one can be billed for medical services in a calendar year.
Ancillary Benefits
Ancillary benefits aren’t guaranteed or mandated to be provided every year. They are so generous in fact, that I’m concerned at their current levels they may not be sustainable. Right now, if one used just half their dental benefits as well as the hearing aid, eyeglasses, and OTC allowances, the total value of goods and services could be as much as $4,000 annually! At some point, I believe some of these benefits will either be reduced or eliminated. That may be hard to do because they’re become so popular. So, if companies decided to keep them at their current levels or close to, they may have to make other changes such as increasing co-pays, other costs, or the MOOP. One major player in the Advantage Plan market did just that in 2021. Others may eventually follow. Making these changes is allowed as long as they meet Medicare’s criteria and get their approval. Here’s an example of a major change that occurred in Advantage Plans. When I first got into the Medicare industry in 2008, all Advantage Plan HMO’s and PPO’s had a co-pay of $35 to $50 for Chemotherapy. Not long after, the cost to the consumer was increased to 20% of the billable amount on every single plan in Western PA. Chemo can be as much as $10,000 or more per infusion, meaning the cost to the consumer would be $2,000. This is probably the most significant change in benefits in the history of Advantage Plans. A “monumental change,” as I would call it, doesn’t happen often. But unless companies get an increase in what they’re reimbursed by Medicare, there’s very little doubt in my mind companies will be forced to implement some combination of higher premiums, co-pays, coinsurance, MOOP, and/or reduction in ancillary benefits. One benefit that has stayed very steady over the years with Advantage Plans is prescription coverage. There has never been a deductible for prescriptions and almost no increases in drug costs. Some plans now offer $0 copays for Tier 1 and 2 generic medications.
We review plans to find your best fit
Every AEP, I review all available Advantage Plans for the following year. There always seem to be two or three out of the 80 or so available in Western PA that are head and shoulders better than the rest. We want our clients to be on those plans. We send a letter letting them know what changes they can expect to their current plan and make a recommendation if they should stay on it or consider a change to another plan or company. Advantage Plans can be changed year after year regardless of one’s current or previous health. For the plan year 2022, I actually anticipate many people moving back to the company they left in 2021. I’ve also had stretches where clients moved to a different Advantage Plan company each AEP four years in a row.
Stand Alone Part D prescription plans that those on Supplements need to purchase are constantly changing and very rarely for the better. Part D companies have figured out how to get around some regulations and have gotten very good at pushing the envelope for greater profits. They count on seniors not paying attention to the changes and simply renewing. Even if one’s medications are the same as the year before, Part D must be reviewed. Again, we do that for every single Supplement client. It’s a painstaking and time-consuming process, but absolutely necessary. I estimate that we recommend to 50% of our Supplement clients to change Part D plans or companies each and every Annual Election Period. Not making a change can be up to a $1,000 mistake.
Thank you!
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.
Thanks to everyone who has read “New to Medicare” and all of you who have been loyal followers over the years! Keep your questions coming.
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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.