Question from Brie
Question from Brie: I’ll be 65 and going on Medicare in July. I worked for North Allegheny School District. My husband is retired and applied for Medicare but is currently on my school health benefits. I have researched the many plans and talked to a lot of people. It’s my plan to have my husband choose an Advantage Plan. He has no serious health issues and takes just two maintenance drugs. I was planning on also signing up for an Advantage plan because they seem to be good. However, I’m eligible for HOP Medicare retirement benefits and saw in your last column that you advise for a people to always go with HOP even though it’s more expensive than the best Advantage plans. I take no medications and also in good health. I’d like your opinion and advice on how to proceed.
Answer
Answer: I consider this to be one of the most important columns I’ve ever written and it’s the longest I’ve ever done. I’m so glad Brie emailed me because I’ve been concerned with how many people are choosing Advantage Plans without understanding the possible consequences and risks. I’m shocked at the number of HOP recipients who are opting out of what I consider to be the best value in all of Medicare; The Hop Medical Plan for those who get the $100 per month premium assistance. I don’t stand to make any commission by making that statement or advising someone to choose the HOP plan.
Let’s get into answering the question and discussing my issues with the mentioned trend.
First of all, never ever choose a plan based on what a friend has or says. Period. I don’t give friends medical or financial planning advice and they shouldn’t be giving you advice on health insurance. As far as choosing a plan based on one’s current health, it’s simply not wise. It’s akin to not taking out homeowner’s insurance or choosing a policy that would put one of your biggest assets at risk because you’ve never had a fire. We buy insurance for the “what if’s” in life. The biggest what if when it comes to choosing a Medicare plan should be what if I’m diagnosed with Cancer, especially those that never, or may never, go away such as Chronic Leukemia, Lymphoma, Breast or Ovarian Cancer. What if I’m diagnosed with a rare disease or form of Cancer that can only be treated at the Mayo Clinic, MD Anderson, or another world class facility outside of Pennsylvania.
After 15 years dealing with people on Medicare, I can give example after example of the healthiest of 65-year-olds becoming very sick within a month to a year of going on Part B. Life is fragile and cancer doesn’t discriminate. That I know.
Please also need to understand that almost everyone who goes on Medicare for the first time gets one shot and one shot only to enroll in a Supplement without having their medical conditions considered. Supplements do a few very important things that Advantage Plans don’t. a) Eliminate almost all medical bills. b) Provide access to every full-service non-VA hospital in the country and virtually every doctor at no additional costs. No Advantage plan provides all of these. c) Eliminate the need for Prior Authorizations. In other words, if you have a Supplement, your course of treatment is decided by you and your doctor. There is no outside interference from an insurance company. Those with Supplements will never be told they need to get physical or injection therapy before being allowed to have a CT scan, MRI, Stress Test, surgery etc. They also won’t ever be informed their insurance company is refusing to pay for any more days in the hospital. This is the number one reason people choose Supplements.
“I’m healthy so if I want to go back to a Supplement later, I can,” Brie may be thinking as many others do. Everyone loves Advantage Plans when they’re healthy and I completely understand why. The best plans cost $0 to under $40 per month, much less than Supplements. They come with extremely valuable dental, vision, hearing, OTC, gym membership benefits and more! But when people get sick, start getting thousands of dollars in bills, and/or have to fight with their insurance company to get services approved, they don’t like them so much. That’s when they call us wanting to get on a plan that eliminates those issues. Well, guess what? Supplement companies aren’t going to accept sick people into their plans for up to five years, maybe ever, after certain diagnoses.
I’d like to make this message very clear; I’m not anti-Advantage Plan. Not at all. We enroll clients in them every day and I approximate that 35 to 40 percent of our Medicare clients are on HMOs and PPOs. However, what I’m seeing in today’s market is too much misleading information and advertising that is steering people who really need to be on Supplements away. We’re meeting so many seniors who have been lied to or given false information and been sold on $0 or low premiums, dental, vision, and free stuff. But these brokers aren’t explaining any of the risks or disclosing they aren’t Supplements and not secondary to Medicare. They’re leading people to believe they’re the same only less expensive while including extra benefits. They’re not explaining that CT scans, MRI’s, hospitalizations, outpatient surgeries will cost hundreds to thousands of dollars. They aren’t asking what types of ongoing medical issues people have that could cost them thousands of dollars per year such as injection or infusion therapy which are becoming more common. We’re talking to far too many people who didn’t know until they got big bills. And weren’t told that once they chose and Advantage Plan, most likely there’s no going back to a Supplement. The number of agents on the prowl looking to switch people off their Supplements and HOP plans is deeply disturbing. I’m shocked how ugly and out of control the industry has become. I’ve seen nothing like it in my 15 years in the field. And unfortunately, the Feds don’t have the resources for proper oversight. I’m afraid they may overcorrect and make enrolling in a new plan very difficult for everyone like they did with the mortgage industry after the housing collapse of 2008.
I’m also afraid that people are falling too much in love with dental, vision, and all the free stuff while ignoring more important aspects of Advantage Plans vs Supplements. I’m worried that we may be in a bubble. Advantage Plan companies are being reimbursed by the Feds much more than they did three and four years ago. It’s what’s prompted all the extra benefits. And in case you didn’t know, Medicare is not in a good place financially.
The following is a quote from a June 2022 press release by the Committee for a Responsible Federal Budget, a non-partisan and non-profit agency. “The Social Security and Medicare Trustees released their annual reports on the state of the trust funds today. The Trustees find that Medicare’s Hospital Insurance trust fund will be insolvent by 2028. Upon insolvency, Medicare Hospital Insurance payments will be reduced by 10 percent.”
The following is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget: “Social Security is only 13 years from insolvency and Medicare is only 6 years. Policymakers need to get their heads out of the sand and stop pretending these vital programs’ funding issues will fix themselves. Today’s youngest retirees will be 68 years old when Medicare runs out of reserves.”
What does this have to do with dental, vision, and all the other new free benefits? If payments from the Feds to Advantage Plans are reduced, which may happen with the state of things, insurance companies will have no choice but to do some or all of the following: a) Reduce or eliminate dental and other ancillary benefits. In 2018, there was no comprehensive dental, OTC benefits, co-pay and healthy foods debit cards. b) Raise premiums, which have gone down almost every year since 2019. c) Increase co-pays, which have also been reduced significantly in the same time frame.
I’m afraid in three, four, or five years, people who chose Advantage Plans or left Supplements for the free stuff and low premiums may look at their overall package and not recognize them compared to what they originally enrolled in. And the majority of people won’t be eligible to enroll in a Supplement due to pre-existing conditions.
In summary, when making a decision, think about both the short and long term, which is especially important for those with health issues. If you want to ensure you always get the facts and never advice based on what kind of commission can be made, call us or make an appointment for a no cost consultation. Once properly informed, we can then guide you to the best Supplement or Advantage Plan for your personal situation.
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.
Erie County Area
1105 West 12th Street, Suite – A
Erie, PA 16501
Phone: 814-920-5275
Fax: 814-920-5276
Fayette/Westmoreland County Area
121 North Pittsburgh Street
Connellsville, PA. 15425
Phone: 724-603-3403
Fax: 724-603-3402
Pittsburgh Area
21 Yost Blvd., Forest Hills, PA 15221
Mailing Address: 128 Forest Hills Plaza, Pittsburgh, PA 15221
Phone: 412-349-8818
Fax: 878-302-3149
Albuquerque/Santa Fe, New Mexico Area
821 Coors Blvd. NW
Albuquerque, NM 87121
Phone: 505-200-0069
Fax: 505-200-0073
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.