Question from Alan:
Reading one of your recent articles in the PG, it seems in some cases changing from a Supplement, which my wife and currently have, to an Advantage Plan may be practical and financially wise. I understand this is not best for all and seems to be for folks with high dollar prescription drugs. Fortunately, at age 74, we presently don’t take many drugs and those we do are generic. So, in your opinion should we keep what we have, Supplement Plan N and a Stand-Alone Part D prescription plan?
Answer
I can’t answer this question yes or no because there are so many variables, some of which I wrote about in the column Alan is referring to. I would need to spend some time with him to ask questions, listen, and get a feel for he and his wife’s personality.
Alan’s question was motivated by the announcement that we expect a major change in 2024 to most, if not all, Stand-Alone Part D prescription plans that people who have Medicare Supplements purchase to help pay for their medications. This year on the most popular plans, once a $505 deductible has been met, Tier 3 Brand name medications have a set 30-day supply co-pay between $40 and $50, very reasonable and affordable. In 2024, people on those same plans will have a $545 deductible and then be forced to pay 20% to 25% of the retail cost. We’re talking about $100 to $200 more per month for the same medications! This is a huge development obviously.
Advantage Plans, on the other hand, are still going to have a flat co-pay for Tier 3 drugs of $40 to $50 and no deductible. Although it’s not a slam dunk for everyone who takes brand name drugs and are on a Supplement to move to an HMO or PPO, the additional expense for medications is going to really influence many to do so. There will be some people who simply won’t be able to afford to keep their Supplement as well. We’ve already seen that trend this past year and have helped hundreds of people choose the best value Advantage Plan based on their specific needs and circumstances.
There are so many other factors to be considered when making that decision, however. Those who have Supplements pay almost nothing out of pocket for medical services while people on the most popular Advantage Plans are responsible for $10-$25 co-pay for X-rays, $175-$250 for an MRI, $200-$400 for a hospitalization, to thousands of dollars for cancer treatments, infusion and injection therapy, skilled nursing and more. For example, Remicade infusion has become a treatment more and more people are getting for rheumatoid arthritis and Crohn’s disease. Someone who is currently on a Supplement pays nothing for those infusions that are normally needed every four to six weeks. If that person was talked into moving to an Advantage Plan in 2024, they would be out of pocket $3600 to $4,800 for those treatments. I see very few scenarios where leaving a Supplement to go to an Advantage Plan would make sense in a case like this.
However, those who don’t need expensive medical services may indeed want to consider an Advantage Plan. Let’s say someone is paying monthly premiums of $125 for their Supplement and Part D versus the average cost of $25 for the most popular HMOs and PPOs, while saving another $1,200 on the Tier 3 drug they’re going to take in 2024. Now add in the value of all the extra ancillary benefits Advantage Plans provide that Supplements don’t. Those who get their free eye exam and use their full allowance for eyeglasses or contacts, get only their free teeth cleanings and bite wing X-rays, utilize their free gym membership, max out their Over-the-Counter benefit, use a Co-pay and Healthy Food benefits on those plans that supply them are literally getting between $1,000 to $1,800 in real dollar benefits per year. Add it all up we’re talking about $3,000 to $4,000 in total savings. Even if Alan or someone in his position who isn’t taking brand name drugs might be motivated to move to an HMO or PPO when seeing these figures.
But please don’t think only in terms of savings. There are still adjustments those moving from Supplements to Advantage Plans will need to understand and get accustomed to. Those on Supplements never need to wait to get an MRI, Scan, Biopsy, outpatient surgery, physical therapy, etc., to be approved by an insurance company. That’s not the case with Advantage Plans. Supplements also have no network restrictions.
My direct answer to Alan and anyone else considering a change from a Supplement to an Advantage Plan is to schedule a no-cost appointment with us here at The Health Insurance Store. I also recommend setting it up prior to the Annual Election Period. We may not be able to make a change and submit an application until October 15th through December 7th, but we can get the discussion started, answer questions, go over concerns, and make sure all pros and cons are understood so you can make the best individual decision. Most agents when given the opportunity to get paid a healthy commission by changing someone from a Supplement to Advantage Plan will highlight the rewards and gloss over the risks. We will never give advice based on commission. And remember, a move to an Advantage Plan may be permanent due to Supplement companies being able to discriminate on who they accept into their plans based on current and previous health history.
Thanks for reading everyone! Keep the great questions coming. Submit yours to my personal email. Aaron@GetYourBestPlan.com.
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If you would like to make an appointment for a no cost consultation to go over Medicare options, individual ACA marketplace plans, you’re an employer and would like a second opinion on your group policy, or are interested in life insurance, give us a call or email me personally at aaron@getyourbestplan.com. And keep the great column questions coming! Also, I am now licensed in over 20 states and able to help people choose and enroll in Advantage, Supplement, and Part D plans throughout the country.
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