Question from Bruce :
Question from Bruce: The article in Sunday’s paper 2/12/23, was good, but I think you need to be a little stronger in comparing Advantages plans to Original Medicare and Supplement Plan N for Part B drugs that have a 20% patient coinsurance for those on HMOs and PPOs. For instance, my mother had Macular Degeneration in both eyes, and she would get a drug injected every two months at a cost to her of $600.00. Multiply that by 6 and her responsibility was $3,600 per year. My mother’s HMO had a $3,400 MOOP (Maximum Out of Pocket) limit, so she paid for all but $200.00. The MOOP resets every January 1st, so she had to come up with that year after year. There are dozens of in-office drug injections and infusions for many medical conditions seniors may be diagnosed with down the road that can be costly. So, if you stress that once you sign up for a Medicare Advantage plan and stay on it for 6 to 12 months you could be stuck paying the $3,400 -$7000 MOOP, every year for the rest of your life compared to Original Medicare and a Supplement which would only have $226 in bills for the same services.
Answer: Before I get started with comments, I want to make sure everyone understands I really like Advantage Plans. We always provide HMO and PPO options to our clients, and many go that route. The reason I’ve been so heavily focused on concerns about Advantage Plans, like the one Bruce points out, is they often aren’t disclosed when people are making such a crucial decision when going on Medicare Part B for the first time or being talked into moving from a Supplement to an Advantage Plan. And with Five Star Plans being available all year round and so many sharks in the water looking to make large commissions regardless of what’s in a senior’s best interest, I feel responsible to educate as many people as I can. We saw more deceptive practices by agents and agencies in 2022 than in the previous 10 years combined. Advantage Plans can offer excellent value for those who remain just relatively healthy. But as Bruce points out, they can be expensive when out-of-pocket medical bills are considered. The fact is they aren’t for everyone, and many people should never choose them. And when given all the facts, others may decide a Supplement is a more comfortable choice with less risk despite the higher premiums.
Part B drugs are medications infused or injected in an outpatient setting. The most common is chemotherapy for those with cancer. Other conditions that require infusion or injection therapy include: Crohn’s disease, ulcerative colitis, lupus, psoriasis, psoriatic arthritis, rheumatoid arthritis, osteoporosis, end stage renal disease, ALS, multiple sclerosis, immunodeficiency disorders, migraines, anemia, and more. They generally are billed at $2,000 or more and as Bruce mentioned, those on Medicare Advantage Plans are responsible for 20% of that. For example, chemo can be billed at $15,000 per treatment, leaving the patient responsible for $3,000. Almost everyone who needs chemo receives multiple rounds, leaving them on the hook for whatever their annual MOOP is. And MOOPs are no longer as low as $3,400 or limited to $7,000. MOOPs on plans that include Part D prescription drug coverage now range from $4,500 to $8,000. Once the $226 Part B deductible has been met, those on Supplement Plan N, which we recommend most, pay $0 out of pocket for Part B drugs as well as every Medicare covered service other than a doctor or emergency room visit.
Unfortunately, when people are selling Advantage Plans, the “trap doors” such as expensive medical services can go unexplained. Agents often point only to the fun stuff such as $0 co-pays for primary care doctor visits and generic drugs as well as the free ancillary benefits like comprehensive dental, allowances for eyeglasses and over the counter items, gym memberships and more. And it’s not just Part B drugs that can be costly. Take a knee replacement that many, if not most, people will have done after turning 65. Between the physician’s visits, MRI or MRIs, the inpatient hospital stay, and four to eight weeks of physical therapy, the average total cost with the most popular Advantage Plans are $600 to $1,000 or more.
One other especially important fact is that those on Advantage Plans who have an insulin pump are also responsible for paying 20% of the retail cost for their insulin, while those on Supplements pay nothing. Additionally, it may not be mentioned that once someone enrolls in an HMO or PPO it can be impossible to get a Supplement, which Bruce also alluded to. People with insulin dependent diabetes, A-Fib, some cancers, auto immune disorders, heart disease, COPD, Alzheimer’s, early onset dementia, among other diseases or conditions, or who take certain medications will be automatically denied by virtually all Supplement companies.
Those who start with Supplements can always move back to an Advantage Plan because HMOs and PPOs are not allowed to deny applications based on one’s health history. Many of our clients choose Supplements to start and then move to Advantage Plans once the premiums get to what they consider expensive.
If you want to get all the facts, pros, and cons of Supplements vs Advantage Plans, get quotes or compare companies and plans side by side, give us a call to schedule a no cost consultation. We can do those in office, over the phone, or via a virtual internet meeting. And you don’t have to wait until the Annual Election Period. There’s never a bad time to get educated, and most people can change plans over the next few weeks.
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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