Question from Marcy:
You stated in your last column that people on Advantage Plans need to be prepared to switch plans or companies every year. Why would I need to do that if my premium is going down for 2022?
Answer
Changing Plans on Supplements
Answer: I don’t care if your premium has gone up, down, or stayed the same. It’s very simple. There is a 50% chance you don’t have a plan that meets all the following criteria:
1) Has a monthly premium under $40. 2) Has a per stay hospital co-pay (not a per day) of $360 or less. 3) Provides at least $2,000 in comprehensive dental that covers fillings, extractions, crowns, root canals, partials, and dentures. 4) Offers Over the Counter (OTC) allowances that can be used to order products such as vitamins, pain relievers, cough, cold, and flu remedies, and pretty much anything that is found on the shelves of a drug or big box store’s health section. 5) Provides network access to all doctors and hospitals currently being used or you would like to have access to in the future. Although it’s not one of our criteria, some people may also be concerned with the amount of the Maximum Out of Pocket (MOOP), which represents the most one can be billed for medical services in a calendar year. That ranges from $4000 to $7,550 for in network services in 2022.
There is one large group of people in particular that I’ve been encouraging and advocating to make a change for years now. I estimate there may be as many as 50,000 or more seniors who are still on plans that haven’t been competitive in almost 10 years and won’t be again in 2022. My apologies for not naming the company or entities. Medicare regulations don’t allow me to do that. These folks have been with this company for 20 years or longer. The idea of leaving them and moving to another is frightening. Even when presented plans side by side that prove they can get another that covers the same medical services, the same doctors and hospitals, offers lower co-pays at less premium (sometimes thousands a year less), they can’t pull the trigger because of that fear. I’ve witnessed it hundreds of times. Some have watched their premiums go up by 500% in the last 10 years. It’s a travesty in my opinion. I’ve met seniors who were spending as much as 20% to 40% of their disposable income on Advantage Plan premiums that were $200 to $300 per month, when they could have gotten as good or better coverage from $0 to $80. If it were up to me, it wouldn’t be legal for companies to sell plans with a premium of over $50 or $100.
There is great news for this particular group however. The same company has introduced another entity which has a plan that is very competitive and in the group that I consider worthy of consideration. In fact, it’s in my top three that come with Part D prescription coverage. It provides savings between $40 and $250 per month versus the non-competitive plans I’m referring to and supplies some of the most generous comprehensive dental and OTC allowances on the market, benefits they aren’t currently receiving. It also has a per stay hospital co-pay that meets my #2 criteria vs the current per day co-pay which can result in a bill of more than $1,000. They also offer something that no other Advantage Plan company on the market does, access to most doctors and hospitals nationwide at in network co-pays with no deductible or hassles. There’s no longer a reason for anyone to stay on the more expensive plans that have higher hospital co-pays and don’t supply comprehensive dental or OTC benefits. None. If you have a friend or relative who has refused to change plans, please let them know they can finally stay with the company they’re comfortable with and get a better plan at a lower cost.
What’s happening industry wide is the addition of more and more plan offerings from existing companies. Often the new plans supply better value, but the member isn’t aware. Why don’t companies eliminate plans that are high priced or aren’t as good as the new ones? Because if you’re willing to pay more money for a plan with higher co-pays, the same or higher MOOP, and less dental and OTC benefits, the insurance company isn’t going to try and talk you out of that. It’s extra profit for them. I’m hoping at some point Medicare limits the number of plans each company can offer like they just did for Stand Alone Part D prescription companies. One particular Advantge Plan company has over 50 offerings in PA. The more plans there are, the more confusing it becomes which makes it much more likely that someone can wind up o n a non-competitive plan. There are now more than 100 to choose from in Western PA and there are 11 total entities (8 companies) offering them. Seven or eight years ago there were literally only four entities and three companies in the Western PA market with less than 25 total plan choices. The bottom line is very few people can navigate it alone without professional advice like we provide at The Health Insurance Store.
Anyone who has an Advantage Plan HMO or PPO that doesn’t meet the criteria I listed above should make an appointment to get a plan comparison during the Annual Election Period that just began and runs through December 7th. Consolations with myself or one of our experienced and licensed agents are always provided at no cost. Please feel free to reach out if you would like to have a discussion with an agent prior to making an appointment. I can be contacted directly via email as well. Aaron@getyourbestplan.com.
Get Your Part D Reviewed
Another mistake those on Supplements make is remaining on their Part D prescription plan without having it reviewed professionally, which should be done every year. Two of the most popular plans are almost doubling their premiums while not offering better coverage. It’s also common for drug tiers on plans to be moved from 1 to 2, 2 to 3, and so on. Failure to change Part D plans can be extremely costly. Even if you didn’t buy your Supplement from The Health Insurance Store, we can review and recommend a plan for 2023, just like we do for all our active clients. If you’re interested, please contact us as soon as possible so we can get you the necessary form.
There aren’t many significant changes to Advantage Plans, but indeed some items worth mentioning. Probably the biggest news is the reduction of the MOOP by one of our three major companies. In 2021 they raised it significantly across the board on all their plans to the maximum allowable by Medicare. It stayed the same in 2022 and many members chose other carriers due to the increase. However, on a select number of plans, including what we feel is their best for 2023, it has been reduced by $3,000 and is now the lowest in the market for those that supply prescription coverage.
If you weren’t aware, there are no preexisting condition clauses with Advantage Plans. Anyone who has Medicare Parts A and B can change plans or companies regardless of their current or prior health, even those who have End Stage Renal Disease. All Advantage Plan companies must accept you and begin to pay claims the 1st day the policy goes into effect. In addition, all Advantage Plans must cover the same categories of benefits. As I’ve written on so many occasions, paying more in premium doesn’t get you any additional coverage for medical services! In fact, we will not be advising our current or potential clients to choose any Advantage Plan that will have a premium above $40 per month in 2023. If you are paying over $40 for your HMO or PPO, you should call or email us to set up an appointment and see side by side why paying more doesn’t equal more.
How will Inflation Affect AEP?
Lastly, due to inflation, we’re expecting this AEP, which begins on October 15th, to be the busiest we’ve ever had in terms of moving people from Supplements to Advantage Plans out of financial necessity. If there was ever a good time to do that, now is it because the most competitive plans have never been better in the 15 years I’ve been in the Medicare industry. For those who don’t like the thought of leaving a Supplement, there is some good news. You may not have to as it appears one of the biggest increases in the Social Security Cost of Living Adjustment (COLA) is going to be announced soon. It’s estimated to be from 8.5% to almost 10%. And for once, the raise will not be eaten up by a large Part B premium increase. In fact, many people believe it’s going to remain $170.10.
AEP is right around the corner!
I’d like to remind readers that the Annual Election Period (AEP) is right around the corner. Pre AEP, when plan details are made public, starts October 1st and AEP, when changes to your plan lineup can be made and applications submitted, begins October 15th and runs through December 7th.
If you enjoy the columns, please consider using our no cost services when going on Medicare for the first time or looking at possibly making a change in plans as well as referring friends or family who are. Enrolling new clients in plans, which cost the same whether you use our free services or go directly through a company, helps us cover the expense of the articles so we can continue to run them every week. As brokers, we are appointed to provide plans from every competitive Advantage Plan and Supplement company in Western PA and West Virginia.
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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