Ask The Medicare Specialist

Question from Connie: I’ve had an Advantage Plan for a couple of years now, but I only recently began to read your columns. I get the feeling you don’t like Advantage Plans and now I’m questioning my choice. Should I change to a Supplement? What’s your opinion?

Answer: Right away, let me be clear that there’s no one-size-fits-all approach for deciding between a Supplement or Advantage Plan. It comes down to several factors including health, aversion or tolerance to risk, income, and much more.

I don’t dislike Advantage Plans at all. In fact, I believe they’re a vital part of Medicare. Without Advantage Plans millions of Americans would be underinsured with only Original Medicare Parts A and B as protection, leaving them vulnerable to the potential for tens of thousands of dollars in out of pocket costs every year. 

The low premiums and overall benefits the best HMOs and PPOs offer, in my professional opinion, can be outstanding. They’re a great fit for millions of seniors. Our agency alone has around 5,000 clients who choose them. I recommend reading last week’s column where I write about why many people currently on Supplements that are increasing in cost might want to consider moving to an Advantage Plan. My 10-part New to Medicare series also has a chapter that goes over who we might advise is best to choose an HMO or PPO. This series and all columns can be found on our website, www.GetYourBestPlan.com. 

My problem isn’t with Advantage Plans. It’s with agents who don’t disclose any of the risks they pose and never compare HMOs and PPOs with Supplements. At The Health Insurance Store, we always explain and educate potential clients, in detail, about the differences, pros and cons, the risks and rewards of both. When that’s done properly, the majority of the people we meet with who are going on Medicare Part B for the first time choose a Supplement. I estimate it’s about a 70/30 split. As people age and Supplements become more expensive, it gets closer to 50/50. 

Those who go to other agents or agencies end up with an Advantage Plan around 90% of the time in my approximation. Why is that and why don’t all agents talk about Supplements or explain the risks of Advantage Plans? Because commissions to sell the latter are higher, as much as 400% more for someone going on Part B for the first time. Unfortunately, far too many agents are selfish and steer people to plans that are more financially lucrative for themselves. We meet people almost every day who have no idea their Advantage Plan isn’t secondary to Medicare and think their HMO or PPO is a Supplement designed to pick up what Medicare doesn’t pay, namely the 20% of Part B. That’s not the case and moving from an Advantage Plan to a Supplement in the future may not be possible, potentially making one’s initial choice in an Advantage Plan permanent. Far too often people aren’t made aware of this simply because all the facts weren’t explained by the agent or representative of an insurance company who enrolled them. You can’t choose a Supplement if you’re never given that option, an actual purposeful strategy used by many agents. 

I saw a very disturbing ad on Facebook just the other day from a guy who was trying to get Medicare agents to sign up and pay for a training webinar he was offering. The following was his pitch: “You just made $450 on a client and got excited? That’s cute. Chase Made $1,200 and still didn’t smile…. While you’re proud of that single Medicare Advantage Plan, Chase’s team is serving combo meals selling Cancer policies and fries with that.” 

This type of predatory behavior and sales practices are disgusting. However, they are far too prevalent in the Medicare insurance business, and I believe the majority of agents see those on Medicare as a paycheck and nothing more. 

As I stated, Advantage plans can be a great option, but they’re not the best fit for many. It’s wrong and unethical for an agent or insurance company representative to take away one of a senior’s only two choices. It’s my opinion that the Medicare insurance field needs a foolproof regulation that ensures everyone going on Medicare for the first time is fully aware that enrollment in an Advantage Plan comes with the risk of higher out of pocket medical costs and the possibility of never being able get a Supplement after one gets sick, has a major accident, or is diagnosed with certain conditions. 

Should Connie consider a Supplement? If she understands the risks of Advantage Plans, believes the rewards are worth accepting those risks and is happy with her HMO or PPO, it’s not necessary. However, If she or anyone else wasn’t given the Supplement option when first going on Medicare, didn’t have it explained properly or glossed over, as happens so frequently, then I highly recommend making an appointment with myself or another of our licensed and experienced agents who will take the  time to ensure everything is explained properly: how both plans differ as far as costs and coverage, how medical care is received and approved, and most importantly all risks are disclosed and understood. 

I wrote the following Mission Statement when I first opened The Health Insurances Store. 17 years, 14 employees, and over 20,000 clients later, it’s never changed and will continue to guide us when advising seniors and others who seek out our guidance.  

“I built The Health Insurance Store on a few simple concepts:

      1) Treat everyone with respect.

      2) Be honest.

      3) Work hard. 

…and help everyone who calls, emails, or walks through the door, even if it doesn’t result in a commission. Agents of The Health Insurance Store will never give advice based on how it affects their paycheck. Our only concern is doing what’s best for your health care needs and budget. Once you obtain a policy from The Health Insurance Store, we will assist you in any we can by answering your questions, taking care of problems, or handling issues that may arise as long as you remain a client.”

Reach out to us or email me personally at aaron@GetYourBestPlan.com to schedule an appointment or with questions regarding this column or any other Medicare, health, or life insurance related topics.