Ask The Medicare Specialist

What are the pros and cons of both Medicare Supplements and Advantage Plans?

This week will be dedicated to Supplements and Part 4 will continue next week when we will do the same with Advantage Plans.

Supplements, also known as Medigap policies, are highly Federally regulated to protect the consumer and have been around almost as long as Medicare itself. They’re designed to pick up the portion of the bill not fully covered by Medicare, namely the Part A hospital deductible of $1,676 and the 20% Part B doesn’t pay.

Supplements can only be sold by Plan letters labeled A through N and there are only nine choices for those who turned 65 after January 1^st, 2020. With very few exceptions, our agency recommends just two, G and N, which cover almost everything that Original Medicare doesn’t pay. The only medical cost those on Plan G are responsible for is the annual Part B deductible of $257. Plan N has the same deductible and just two small co-pays, $20 for a physician’s office visit, and $50 at the Emergency Room. All other Medicare covered services are paid for 100%.

One of the aspects people on Supplements love the most is the peace of mind they will never get expensive medical bills. What’s also nice is that no matter what company one chooses to buy their Supplement from, the same benefits are covered and access to doctors and hospitals are also identical. In other words, Plan N is N is N, and G is G is G no matter what company sells it. So, what we as agents are looking for when helping enroll our clients are companies that have the lowest premium to start, and maybe even more importantly, have a good reputation for keeping rates lower over an extended period of time. There are around 20 companies who sell Supplements in Western Pennsylvania, but currently we’re only comfortable enrolling our clients in four.

Supplements also provide nationwide access to doctors and hospitals which means those who have them can obtain care at all health systems here in Western PA and West Virginia as well as other world class facilities such as the Mayo Clinic, Cleveland Clinic, John’s Hopkins, and MD Anderson Cancer Center at no additional cost. I’ve had several clients whose lives were saved because they were able to get care from those hospitals.

Maybe the number one reason to choose a Supplement is an aspect that doesn’t get talked about nearly enough; Supplement insurance companies do not get to make decisions on what’s covered. Medicare does that and lets the patient’s treating physician “steer the ship’ as I like to say. In other words, if your doctor wants you to have an MRI, CT scan, surgery, injection therapy, etc., it can happen immediately. There are no prior authorizations necessary or delays in receiving care while waiting for approval. In addition, if a doctor thinks it wise for their patient to stay an extra day or two in the hospital or Skilled Nursing Facility, there’s no interference from an insurance company.

Supplement benefits never change as long as one remains on the same plan letter. In other words, those who choose Plan N and live to be 85 years old will still be paying just $20 for doctor visits and $50 at the Emergency Room. Those can’t ever be increased and co-pays for other services can never be added. The Part B deductible does go up almost every year, but the increases are generally mild.

The biggest negative of Supplements may be cost. They’re generally more expensive than Advantage Plans and start at $75 to $100 per month for a 65-year-old, depending on zip code, gender, and marital status. Premiums also increase as one gets older and those who live to age 85 can expect to be paying over $200 per month by that time, not including the cost of a separate prescription drug plan known as Stand Alone Part D, which most on Supplements need to buy as well. The majority of our clients are on plans that have a very low or even no premium for 2025. There is a $590 deductible on Stand Alone Part D plans for Tiers 3, 4, and 5 drugs which can be burdensome for some.

Supplements don’t come with ancillary benefits such as dental, hearing, vision, OTC allowances and gym memberships. Although Medicare and a Supplement cover medical conditions of the ear, eye, and mouth such as Cataract, Glaucoma, Macular Degeneration, ear infection, eye infection, broken jaw, etc., they do not cover services considered cosmetic such as teeth cleanings, fillings, root canals, routine eye and hearing exams, glasses, hearing aids, etc.

Another negative of Supplements is six months after one’s initial Part B effective date, companies use Medical Underwriting to determine if they will accept someone into their plans. That means the insurance companies can discriminate and deny a policy based on an applicant’s current and previous medical history. Generally, the only time one can ever get on a Supplement, regardless of health issues, is within six months of enrolling in Medicare Part B. This is why it’s so important to understand the ins and outs of both types of plans. Those who start with an Advantage Plan may never be able to enroll in a Supplement once diagnosed with certain medical conditions such as heart disease, certain cancers, auto immune disorders, A-Fib, Insulin dependent diabetes, COPD, among others. It also may not be possible to move from one Supplement company or letter plan to another.

Please remember that this series and all columns are not meant to be a substitute for a consultation with one our licensed and experienced agents. There is no one size fits all approach and what type of plan, company, and Supplement letter one chooses really matters. Making the wrong choice can be costly and last a lifetime. It’s also not wise to buy a plan online or directly through an insurance company.

If you have any questions regarding this column or any other Medicare related topic or would like to set up an appointment for a no cost consultation, please call one of our offices or reach out to me personally at Aaron@GetYourBestPlan.com.