Medicare Reset: Part 5
Question:
What are the most important considerations when choosing a Supplement as well as a Part D Prescription Drug Plan, and what plans and companies are the best?
This is Part 5 of my “Medicare Reset” series designed to prepare those on Medicare for the Annual Enrollment Period (AEP) that starts on October 15th and runs through December 7th. AEP is the only time of the year when those on Medicare can make any and all changes to their plan lineup.
With over 600,000 people expected to have their current Advantage Plan discontinued, major benefit changes to many Advantage Plans and Part D prescription coverage, as well as the highest increases in Supplement premiums in the past 20 years, more people than ever are going to need or want to change Medicare health and drug plans. If you’re in one of these positions, it’s going to be vital to educate yourself in order to make a wise decision. This series is written to help you do just that.
Answer:
According to the Centers for Medicare and Medicaid (CMS), “All Supplement (Medigap) policies must follow federal and state laws designed to protect you, and policies must be clearly identified as Medicare Supplement Insurance. Each standardized Medigap policy must offer the same basic benefits, no matter which insurance company sells it. Cost is usually the only difference between Supplement policies with the same letter sold by different insurance companies.”
In almost every state, there are only 9 Supplement plans that can be sold and they’re labeled with letters A, B, D, G, K L, M, N, and High Deductible G. What’s great about there being no difference in what’s covered or what doctors can be used from one company to the next on the same letter plan is you don’t have to get into the weeds, spending hours upon hours comparing 10 different companies to see who offers the best overall benefits. Plan N is N is N and G is G is G regardless of what company is selling it. All we have to do is compare monthly premiums. Therefore, the best Supplement companies are those who have competitive rates at the policy’s inception and who we feel have positioned themselves to maintain competitive premiums over the long term.
How do I know what companies will raise rates more than others?
There’s no exact science behind predicting future rates because that’s 100% determined by the dollar amount of claims each company pays out on each of the letter plans they sell versus how much in premiums they collect in a 12-month period. It’s impossible to know how healthy or sick the pool of people in each specific company’s plans might be in the next year to 5 years. However, experienced agents, like we are at The Health Insurance Store, can speculate which companies have positioned themselves best to be more likely to keep rates down long term and what letter plans have had historically lower rates. It’s extremely important to make a good choice, especially when it comes to what letter plan you enroll in due to medical underwriting that allows companies to discriminate on who they accept into their plans based on an applicant’s current or previous health conditions. In other words, once enrolled in a Supplement, it may not be possible to move to another company or letter plan in the future.
Supplement company name has no influence on coverage and claim approvals
There are dozens of companies that sell Supplements in the US, and many aren’t household names that you’ve gotten used to hearing or have had a policy with prior to turning 65. It doesn’t matter what the name of the company is or how well known they are because again, they’re all regulated to not only cover the same services and provide access to the same doctors and hospitals nationwide, but also to pay and approve claims the same exact way. You see, Supplement insurance companies have no say in what’s covered. That’s decided by Medicare, the only health insurance in the United States that allows your treating physician to decide what’s medically necessary without prior authorization from an insurance company or delay. Medicare almost never denies a claim for services a physician or hospital orders. And when Medicare pays their share of the bill, the Supplement company must pay theirs with no questions asked and in a timely manner.
What Supplement letter plans are best?
As far as what plans are the best, G is most popular throughout the country, but we advise the majority of our clients to choose Plan N because there is very little difference in out-of-pocket medical costs, and premiums for N over the next 10 years have the potential to be as much as $20,000 less than G! So many people are already being priced out of Plan G in only 5 to 7 years after first enrolling, while N has remained much more affordable. It’s so important to have the differences in G and N explained properly, which most agents don’t do or even understand themselves. Do not enroll in G until you speak to us here at The Health Insurance Store and allow us to explain why we recommend N! In addition, if you’re currently on Plan G, there’s a very good chance you can cut your premiums in half by moving to N. Lastly, no one who can pass underwriting should be on antiquated and overpriced Plans C and F! Check with us for quotes and to see if you can pass medical underwriting. Don’t ever assume you can’t change!
Part D Prescription Plans
Regarding Part D, there really is no plan or company that’s “best” for everyone. What Part D plan is most cost effective is almost 100% determined by what medications you’re taking at the time of your first enrollment and each AEP. Part D needs to be reviewed every single year, which we do for all our Supplement clients. Even if one’s medications and Part D premiums haven’t changed, you must pay attention to the mail or emails that come from your Part D plan company because drugs that were covered one year can be taken off formulary the next. Drug tiers can also change, resulting in higher co-pays.
Paying more for Part D rarely makes sense
Be advised, paying a higher premium for Part D “just in case,” of what you might be prescribed later in the year, or for a plan that doesn’t have a deductible is also a common and costly mistake. You don’t need to do that! All Part D plans, regardless of monthly premium, now have the same annual cap on what you can spend out of pocket on covered drugs in a calendar year ($2,400 in 2027). They also all have the same regulations designed to protect the consumer, from the lowest cost plan to the highest. For example, If you get prescribed a medication that isn’t on the plan’s formulary, you must be given what is known as an emergency transitional 30-day supply. This gives you time to get with their doctor to prescribe an alternative drug or to file for an exception to have the original prescribed medication covered. There are also “Tier Exceptions” that can lower the cost of certain prescriptions.
How the Health Insurance Store can help with prescription costs and plan choice
We help our clients navigate through any obstacle and assist in the appeal process with the Part D companies when necessary. And no one has more experience in finding ways to save money on prescription drugs than we do with extensive knowledge regarding state funded programs like PACENET, alternatives to using insurance such as Good Rx and Cost Plus as well as Canadian Pharmacies, Patient Assistance Programs sponsored by drug manufactures, and Federal programs such as “Extra Help.” Our clients are instructed to reach out to us whenever they feel costs for their prescriptions seem excessive so we can get involved, which even includes determining eligibility for programs and submitting applications.
I recently recorded a tutorial on how to choose a Part D Prescription Drug Plan and navigate what has become a complex system for those on Medicare. Click the link here to watch the tutorial. However, if you become a Supplement client through The Health Insurance Store, we can take on the burden of recommending a Part D Prescription plan each AEP and shopping for a new one for you when necessary.
With questions regarding this or any other column or to schedule an appointment for a no cost consultation, give us a call or email me personally at aaron@getyourbestplan.com.