Question from Judith:
I know you try really hard, but I still get confused by the information in some of your columns. I suppose that shouldn’t matter to me because I am well over 65 and also on HOP, which means I should always stay a HOP person.
The only change I made this year was I switched from the Enhanced Prescription plan to the Basic. I don’t understand how or when my deductible will be assessed. I have had many prescriptions filled and I see no evidence of being charged even though the information they sent said I would.
I still think I pay a lot of money in copays, and that there may be better options for me, but I have no interest in switching at this point.
This is another one of those questions that has a lot that needs to be addressed. For those who are unaware, HOP stands for Health Options Program and provides and administers health insurance plans for retired public-school employees in Pennsylvania, among other states.
Almost all Stand Alone Part D prescription plans those with Supplements must buy, including the HOP Basic plan, have a deductible. However, they apply only to Tier 3, 4, and 5 medications which are usually brand name. Judith is taking only generic drugs that have flat co-pays and aren’t subject to a deductible. She and others who take only Tier 1 or 2 meds won’t have it come into play.
I want to address Judith’s statement that, “I should always stay a HOP person.” If she is on the HOP Medical Plan, receiving the $100/month premium assistance, and the plan benefits and premiums remain similar to what they are today in the future, I would agree 100%. But if they were to become expensive and/or benefits would change dramatically, there definitely could be a scenario where it might not be best. I don’t anticipate that happening, but it’s not completely out of the question in five or 10 years. Also, those who don’t get premium assistance, including spouses of the retiree, are often wise to opt out of HOP.
Also, I estimate that only about 10% to 15% of HOP recipients are best on one of the prescription plans they offer because they’re extremely high priced compared to Medicare Part D plans available on the open market. The Enhanced Plan is $126/month and will be completely antiquated in 2024 due to some provisions in the Inflation Reduction Act that eliminates the Catastrophic Stage of Part D. In 2024, once someone pays their way out of the Donut Hole, which occurs once someone has spent about $2,700 out of their own pocket, all drugs will be $0 for the rest of the calendar year. I don’t see any scenario where someone would be better off on the Enhanced plan after this year, and I estimate it only makes sense for one to two percent of HOP recipients. There just isn’t enough value for the exorbitant cost. The HOP Basic drug plan is $67 per month. It has $5 and $12 Tier 1 and 2 generic co-pays, respectively. Tier 3 medications have a co-pay of 25% of the retail cost, which would be $100 or more for the vast majority of brand name medications. Compare that to the two most popular Part D plans among our clients. They have premiums a bit over $10/month and co-pays are as follows: $0 Tier 1, $2 to $5 Tier 2, and a flat Tier 3 under $50. We have over 500 clients who choose a HOP Medical plan and allow us to recommend what Part D plan is best. Those who move from the Enhanced plan on average save $1,200 per year and those on the Basic around $800 between lower premiums and co-pays. If you would like us to evaluate your Part D options this coming Annual Election Period, give us a call and we can put you on the mailing list to receive the recommendation letter we send out every September which has a form to list your medications so we can do research and advise what plan will be best for the following year. We don’t charge for this service.
Judith, the HOP Medical plan with the $100 premium assistance is the best value in all of Medicare in my opinion. There are very few co-pays compared to Advantage Plans you could buy. Although you have a couple more co-pays than Supplement Plans N or G, the low price of HOP Basic Medical compared to what you would pay for N or G by far makes up for that. I bet you’re paying 65% to 300% less in premium than what those your age are paying for Plans C, G, F, or N.
One last statement I want to address is Judith saying that despite her thinking she could do better, “I have no interest in switching at this point.” That is the exact attitude insurance companies want people to have and it can cost seniors thousands of dollars per year in unnecessary premiums and out of pocket medical costs. The length of time you’ve been on your plan has no bearing if it offers the best value. In fact, those with Supplement plan letters, C, G, and F that have been active five or more years are paying much more than necessary. Those who have had the same Advantage Plan for 5 to 10 years or longer may be paying as much as $1,000 per year more in premiums, have higher co-pays and less ancillary benefits like dental, vision, OTC allowances, and more.
Most everyone can change plans outside of the two major election periods because Supplements can be enrolled in all year long. So can 5 Star Advantage Plans, and there are a handful we recommend. When it comes to Supplements, I’m adamant that most everyone should have Plan N. If you have Supplement Plan C, G, or F and can pass underwriting, you are almost certainly throwing away hundreds to thousands of dollars every year. As far as Advantage Plans, no one should be paying premiums over $40/month.
If you would like to have a no cost evaluation of your current Medicare Supplement or Advantage plan, give us a call or email me personally at firstname.lastname@example.org.
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