This week’s questions from Corrine
Your last column mentioned moving from a Supplement to an Advantage Plan. My impression after following for several years is you prefer Supplements. If that’s the case, why would anyone want to do leave one for an Advantage Plan? I chose a Supplement when I turned 65 after meeting with Bonnie at your Forest Hills office. Now I’m a bit concerned I did the wrong thing. Can you ease my mind?
Answer
Supplements Aren’t Always Better
I sure can. You made a great choice, and it tells me Bonnie did her job of comparing, contrasting, and explaining the two types of Medicare plans very well.
That doesn’t mean Advantage Plans aren’t an excellent value for millions of Medicare beneficiaries. According to the Kaiser Family Foundation, a non-profit organization that focuses on national health issues, the number of Americans enrolled in Advantage Plans as of 2021 was 26 million, or 46% of all those on Medicare. My guess is after this past Annual Election Period, we’re probably closer to 50% and 30 million. The reason for the growth is Advantage Plans continue to lower premiums and co-pays, as well as increase and add valuable ancillary benefits Supplements don’t offer such as comprehensive dental; Over the Counter, eyeglasses, and hearing aid allowances; debit cards to help pay for co-pays; and more. The Health Insurance Store has over 4,000 clients currently on Advantage Plans compared to around 6,000 on Supplements, comparable to the national numbers.
Why We Offer Both
Let me explain the reasons I feel Supplements are a great choice for those initially going on Medicare Part B.
#1) It’s very likely to be the only time in one’s life where a Supplement company must accept everyone into their plans regardless of current or past health issues. For many with conditions such as insulin dependent Diabetes or Type 2 Diabetes with complications, A-Fib, Heart Disease, certain Cancers, Auto Immune Disorders, among others, this is it, the one and only chance to ever enroll in a Supplement with just a couple of exceptions: Those who get Medicare prior to age 65 due to getting Social Security/Disability get another chance when they turn 65, and those who take an Advantage Plan as their first choice can enroll in a Supplement with no questions asked within a year of the effective date of their HMO or PPO. In the latter circumstance, however, that move must be made in either the AEP (October 15 to December 7th) or the Open Enrollment Period (OEP) that runs January 1st through March 31st. In addition, Plan N, which I recommend to approximately 98% of those who want a Supplement, isn’t available without going through Medical Underwriting. As the costs of Plan G continue to increase quite rapidly as compared to N, any money saved, or ancillary benefits used would be paid back in the form of higher Plan G premiums in a matter of just a couple years.
#2) Supplements are currently very affordable at age 65 through 75, and even 80 with select companies. They start as low as $75/month plus the cost of a Stand-Alone Part D plan that average about $13. However, when premiums creep into the $200/month range, the value of Supplements decrease. Those at $350/month or more are actually paying out the equivalent of the annual Maximum Out of Pocket on Advantage plans that offer the lowest MOOP before they even visit a doctor. At that point, Supplements make much less sense, especially for those on a budget.
#3) My favorite fact is companies who sell them have no say in what’s covered. Medicare, the primary insurer for those on Supplements, empowers you and your doctors to determine what is the best course of testing and treatment. There are no prior authorizations for CT scans, MRI’s, outpatient surgeries, and more. This isn’t the case with HMO’s and PPO’s. Not that it’s common with Advantage Plans or other commercial insurance such as individual and employer plans, but almost everyone has experienced themselves, or knows someone who has dealt with the following: Forced to wait to get an MRI, CT scan, or surgery, or being informed their insurance company would not approve those procedures until they went through physical or injection therapy first. We’ve also had Advantage Plan clients who’ve been told their insurance company was not willing to pay for additional days in the hospital or Skilled Nursing Facility, the latter of which is more common than we would like.
#4) There are no networks and virtually every doctor and hospital in the country is accessible at no additional charge. There is also very little or no out of pocket medical costs.
#5) You can always move to an Advantage Plan because those companies are regulated to accept everyone who has both Medicare Parts A and B, regardless of health history. This is why Corrine didn’t make a bad decision. In fact, due to most of the top HMO and PPO’s now being rated 5-Star, she can transition to an Advantage Plan anytime during the year. The opposite, however, doesn’t hold true. If one has been enrolled in an HMO or PPO for more than 12 months and medical bills start piling up due to treatments that have higher co-pays or co-insurance, the likelihood of a Supplement company accepting that person is very slim.
In Summary
Again, there are many reasons to choose an Advantage Plan, namely the large premium savings as well as the real dollar value of ancillary benefits used over a five-year period that can add up to as much as $5,000 or more for someone who stays just relatively healthy. But, as I’ve written in so many previous columns, there isn’t a one size fits all approach to choosing a Medicare Advantage Plan or a Supplement. People have different risk tolerances, health care issues and needs, other options of coverage from PACE, the VA, or a former employer. Budgets, travel, and medications need to be considered among other factors. My columns are not meant as a substitute for sitting down with myself or another licensed agent. Doing so is especially vital for someone new to, and even important as well for those already on Medicare who have never consulted with our agency.
Thank you!
If you have any questions or concerns regarding this column topic, or would like to make an appointment for a no-cost consultation, please feel free to give us a call – we would be happy to help. I’d like to remind everyone that I do a live call-in talk show called Medicare A to Z every 1st and 3rd Monday of the month on WMBS Uniontown, 590AM and 101.1FM, from 1 to 3 PM. You can listen in on their website, wmbs590.com.
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