Question from DorothBecky :
Question from Becky: I’m 64 years old on an ACA induvial health insurance plan through Pennie. I have low deductibles/co-pays and my premium is much less expensive than Medicare Part B. Am I able to stay with this coverage once I turn 65 and opt out of Part B?
Answer: Becky is referring to the Affordable Care Act (ACA), sometimes called Obamacare. Unfortunately, she can’t keep her plan at that price, and if she opted out of Part B, would incur a late enrollment penalty down the road. Once eligible for Medicare, even those who haven’t applied for Parts A or B are no longer eligible for subsidies to help pay for health insurance on the marketplace. For those of you who are unaware, Pennie is the Pennsylvania exchange that replaced healthcare.gov as the only place PA residents can purchase individual health insurance using federal subsidies which lower premiums, and in Becky’s case, deductibles as well as co-pays.
Prior to the American Rescue Act of 2021, which significantly raised subsidies and in turn lowered premiums, Medicare Part B ($164.90 per month) and a Supplement or an Advantage were almost always less expensive for those going on Medicare. People would come to the office every day and tell us, “I’d never thought I’d be so happy to turn 65,” because most clients were paying between $400 and $800 per month for plans with deductibles from $800 to $7,000. Today, we meet lots of people like Becky who are going to pay more for health insurance when they turn 65 or go on Medicare Part B for the first time.
The good news is pre-65 retirement is now possible for more people than it was prior 2021. For example, an Allegheny County married couple, age 62, who have a Modified Adjusted Gross Income of $70,000 a year can now buy a high deductible Bronze Plan for $0 per month, or a $0 deductible Gold plan for $352 per month. Prior to the ACA, the plans I would have considered most comparable to today’s Gold options had premiums of $650 and were only available to healthy people who could pass underwriting.
Although Becky and others will pay more for Medicare Part B and a Supplement or Advantage Plan, the added coverage and benefits can make up for the difference in cost. Those who choose Supplements have very little out of pocket medical bills and can utilize virtually every doctor and non-VA full-service hospital in the country. The least expensive Bronze, Silver, and Gold ACA plans have by far the smallest networks when it comes to health insurance. Even those on Medical Assistance have a larger network in our area.
Medicare HMOs and PPOs also have much larger networks than ACA policies. Two of the three most popular Advantage Plan companies in Western PA provide network access to every hospital in Western PA. A couple of plans even have nationwide coverage. As I’ve discussed on several occasions, there are also many generous ancillary benefits supplied by Advantage Plans that aren’t available with Supplements or ACA plans such as: comprehensive dental coverage; allowances for eyeglasses, hearing aids, and over the counter products such as vitamins, pain relievers, cough, cold, and flu remedies, first aid, etc.; prepaid debit cards that can be used to pay certain co-pays and for healthy foods; and more. This “free stuff” as it’s often referred to by people on Medicare is probably the number one reason Advantage Plans are more popular than ever. Number two is the low premiums which start at $0 per month.
Please keep in mind that not all Advantage Plans come with the same ancillary benefits or low premiums. There are less than 10 out of more than 100 available in Western PA that we consider worthy of our client’s consideration. In addition, not everyone should choose Advantage Plans! I’m a broken record when it comes to this. You must get an education on the differences between Supplements and Advantage Plans as well as the pros and cons of each. The amount of medical bills one might have to pay, how claims are approved and paid, access to doctors and hospitals, and the ability to move from one type of plan to the other are not at all the same. Current health issues, future concerns, and many more variables must be considered to ensure the right choice is made.
The Health Insurance Store has been providing that guidance for just shy of 15 years. We’re brokers and can help enroll clients in every competitive Supplement, Advantage, and Part D prescription plan on the market. We’re also licensed to provide individual plans through the Pennie marketplace, which is also extremely confusing. A message to business owners: If you would like to get a quote on a new employer plan or are interested in us servicing your current health insurance policy and taking care of your employees when they have questions or issues, we are extremely experienced in this area. We can become your ‘broker of record” at any time during the year as well as get quotes with another carrier. Consultations are always free of charge.
One announcement I would like to make is that we’re now becoming or are currently licensed to provide Medicare plans in many other states including Ohio, WV, Florida, the Carolinas, Texas, Maryland, Michigan, Wisconsin, New Jersey, New York, Virginia, Tennessee, and several others.
Please send any questions you may have for future columns or those of a more personal nature to me at email@example.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.
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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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.