Question from Dorothy :
Question from Dorothy: Say after 4 years on a Medicare Supplement plan, you decide to go to another Supplement letter or company. Do they ask health questions prior to letting you enroll? I know if you go from an Advantage plan to a Supplement plan they ask questions, but I thought if you went from Supplement to Supplement none can be asked. Can you please clarify?
Answer: This is a great question and why sending them to me to use in columns is extremely important. There are so many misconceptions and bad information circulating regarding Medicare, Supplements, and Advantage Plans. Just yesterday, after getting done explaining how original Medicare A and B work as well as the many differences between the two types of plans, a new client told me, “I had no idea the coverage was different between Supplements and Advantage Plans.” This has become more common, and most of its due to confusing and misleading advertising along with agent ignorance and deceptive tactics. One of the most egregious acts an agent can make is not explaining Supplements as an option and/or leading someone to believe Advantage Plans are designed to fill in the gaps of what Medicare Parts A and B don’t pay. That’s plain false.
Advantage Plans can be a great choice for those on Medicare and we have thousands of clients on HMOs and PPOs. In fact, 50% of all those who are eligible in the entire country have chosen to insure themselves this way for the value they offer in terms of lower premiums and extra benefits. But let me be clear. They ARE NOT the same as Supplements, only less expensive. Something else yesterday’s client thought to be true. There are several good reasons why the other half of the county’s Medicare recipients choose Supplements despite generally having higher premiums.
Sorry to have veered off course. We’re just extremely frustrated at where our industry has gone in the last two or three years. Instead of educating seniors and helping them choose what’s best for each and every individual person, we’re seeing so much deception, smoke, and mirrors in trying to induce people into a one size fits all approach. Some big organizations and agencies are encouraging it too.
Let’s answer Dorothy’s question. Once someone has enrolled in a Supplement and is six months past their effective date, they must always answer medical questions, part of the underwriting process, to be approved for a new company or plan letter. Those who can’t answer all the questions “no” or take certain medications will be denied access to a new Supplement policy. This is also true for those on Advantage Plans who want to change to a Supplement with one exception. If an Advantage Plan was their first choice after getting Part A, or they went from a Supplement to an Advantage Plan for the first time, a move back can be made within 12 months of that policy effective date.
Let me make sure everyone understands this again. After you have been on a Medicare plan, either Supplement or Advantage, for between six months to a year, under almost no circumstance can you move to a different Supplement company or plan letter, or from an Advantage Plan to a Supplement unless you are relatively healthy and can pass medical underwriting which considers your current and previous health. The ACA, aka “Obamacare,” did not change that to many people’s surprise.
This is why I tell my clients, even those who are extremely healthy, when they go on Medicare for the first time or are considering a change in plans to choose the type of plan, Advantage or Supplement, like it’s the last chance you will ever have to do so. And for those choosing a Supplement, make sure it’s the right letter plan and company for the long haul. Why? Because we don’t know what your health will be in six months, one year, two years, or five years from now.
It’s also why I want those currently on an Advantage Plan or Supplement letters C, G, or F to understand the underwriting issue and the very real and quite common scenario of never being able to move from an Advantage Plan to a Supplement or from a more expensive Supplement letter to Plan N for the rest of their lives. You can always move from one Advantage Plan to another or from a Supplement to an Advantage Plan. It’s the opposite that has restrictions. Reach out to us if you would like to discuss this topic further.
And please keep the questions coming. When I publish an important one such as Dorothy’s, you help so many other people as well.
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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