Question:
Question from Carrie: I’m one of the people who is losing their Advantage Plan in 2027. I’ve had it since I turned 65 in 2018 and I’ve been very happy with it. I don’t even know where to start as far as what my options are and what plan might be best for me. Can you please provide me and others in the same position with some advice?
Answer:
Answer: The number of people who are going to have their Medicare Advantage Plan terminated in 2027 is now estimated to be over 3 million! My first piece of advice is don’t panic. This is actually going to be a very good thing for a majority of those losing plans.
First let me start with a warning for those who have plans scheduled to be terminated. Failure to choose another plan before January 1st will result in coverage reverting to Original Medicare A and B. This leaves people with potential for huge out of pocket costs for hospitalizations and 20% for any outpatient services as well as no prescription drug coverage!
So, exactly how is losing your Advantage Plan good thing? Something Carrie mentioned in her question, that she’s had the same plan exclusively for 8 years, is one reason why I’m glad this is happening.
Just because you’ve had your Advantage Plan for a long time and are comfortable with the company doesn’t mean it’s a good value or competitive. So many people renew their Advantage Plan year after year, never shopping or comparing it to others because premiums have remained the same, or even been lowered over the past 5 years.
Although there’s been no premium increases, there have been dramatic changes in benefits on almost all plans including huge increases in hospital co-pays. Here in Western Pennsylvania, what might be the number 1 most popular Advantage Plan is going from a $400 co-pay for a 7-day stay or longer, to $2,100 for 2027! Meanwhile, there are plenty of plans to choose from that have lower hospital co-pays next year that will provide the same access to doctors and hospitals! So, there’s no reason to remain on a plan that will expose people to thousands of dollars more money in out-of-pocket medical costs! Yet, tens of thousands of people will do just that out of fear of change. This brings me to reason number 1 why it’s a good thing for people to have their plan terminated in some instances; it forces them to shop for a better plan.
Let me now address Carrie saying she’s been very happy with her plan. We hear this all the time from people who are healthy and have never had any major health issues that resulted in large co-pays or the need to fight with the insurance company to get testing or surgeries approved. Everyone loves $0 or low premium Advantage Plans when they’re healthy. Why wouldn’t they? Co-pays for PCP visits are $0. Specialist visits are $25 to $40. The Emergency Room is only $125. Generic drugs are little or no cost. And then there’s all the “extras,” ancillary benefits like dental and vision, OTC allowances, and a free gym membership that can be very generous and valuable.
It’s not until the bills add up to thousands of dollars, people are forced to wait to get a CT-scan, MRI, or surgery, or have a claim denied that they don’t like their Advantage Plan. And when they call us here at The Health Insurance Store hoping to move to a Supplement that eliminates virtually all medical bills and puts an end to waiting for insurance company authorization to get care, I have to tell everyone who doesn’t live in New York, Connecticut, Vermont, or Washington that it’s impossible to leave an Advantage Plan for a Supplement once they’ve become sick. Those on Advantage Plans who end up needing dialysis or other regularly scheduled infusion therapy, expensive injection therapy, or other costly services are then forced to pay thousands of dollars out of pocket in medical costs every year.
Which brings me to reason number 2 that having an Advantage Plan terminated is a good thing; people who are can enroll in a Supplement, regardless of their current or previous health conditions using what is known as Guaranteed Issue (GI) rights. GI allows people to get the “preferred rate” for select Supplement letter plans without companies having the ability to deny applications!
This will be a once in a lifetime opportunity for many people with pre-existing conditions that would otherwise keep them from ever getting approved for a Supplement! Those in this position need to make sure Supplements are being explained and quoted correctly in an unbiased manner. That is my number one piece of advice for those who are losing their Advantage Plan!
A broker or agent who will provide an unbiased approach and explain the Supplement option may be difficult to find, however. This is because agents get paid very little, or no commission at all, when we enroll someone in a Supplement using GI rights. Therefore, most agents won’t mention it as an option or will quote higher rates to discourage people from enrolling. It’s very sad that agents would behave this way, but unfortunately, it’s also very common.
That’s not how we operate at The Health Insurance Store. We always explain the Supplement option despite not getting paid any commission because we understand how important that is for those with health issues.
Carrie said she didn’t know where to start. That’s easy. I highly recommend people read my “Medicare Reset,” series that is designed to educated people on all things Medicare so that they can make an educated decision. We go over the basics, from how Original Medicare works, the differences between Advantage Plans and Supplements, what we as experienced agents want in plans for our clients, and much more. You can read the entire 8-part series here.
Using The Health Insurance Store as a resource is also a great idea and there is no charge for our services. If you, a family member, or a friend is losing their Advantage Plan and would like a quote on a Supplement and have the differences between the two types of Medicare plans explained properly, give our office a call, 724-603-3403, or email me personally, Aaron@GetYourBestPlan.com.