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What are the pros and cons of Supplements?
This is the continuation of Part III of my “Medicare Reset” series designed to help those on Medicare prepare for the Annual Election Period (AEP) that runs from October 15th to December 7th.
I went over what I feel are the pros and cons of Advantage Plans in last week’s column. I recommend reading it and this week’s side by side to get a better idea of just how much they differ. You can access all prior columns on our website and Facebook page.
In my opinion, the benefits of Supplements are as follows:
*Supplements are very easy to understand and designed to cover the “gaps” in Medicare, hence the other name they are often referred to, Medigap. Those who have them pay their premiums and almost nothing else. The plans we recommend limit one’s out of pocket medical expenses to just the $198 Part B deductible on Plan G, and the deductible, a $20 physician’s office visit co-pay, and a $50 Emergency Room co-pay on Plan N. That’s it. So, while those on Advantage Plans can be billed up to $6,700 annually, those with Supplement Plans G and N will never come even remotely close to paying that amount.
*Supplements provide access to any doctor or hospital who accept Medicare Assignment. If a doctor or hospital agrees to accept someone with Medicare and a Supplement as a patient, no matter the company, the provider will accept it. In fact, doctors and hospitals don’t bill Supplement companies. They bill Medicare, who then coordinates with the Supplement company to get the providers paid in full. There is unfettered access to our two largest health care systems, UPMC and AHN, as well as every other non-VA medical hospital in the country. If there were a need for the Mayo Clinic, Cleveland Clinic, or MD Anderson Cancer Center due to a rare disease or cancer, those with Supplements could go without incurring additional costs. I’ve met several people whose lives were saved because they had access to those facilities.
*Supplement insurance companies have no say in what’s covered. That’s Medicare’s decision and they rarely deny a claim. If Medicare pays, Supplements must pay their share, no questions asked. Medicare lets the doctor “steer the ship” as I often say. If a doctor thinks it’s prudent to stay an extra day in the hospital or Skilled Nursing Facility, wants a patient to have an MRI or an outpatient surgery immediately, it happens without interference or the need for a “green light” from an insurance company.
*Supplement benefits never change, guaranteeing very little out of pocket expense as long as one keeps his or her plan. For example, those with plan N will never pay medical bills other than the Part B deductible and their small doctor or Emergency Room co-pays. And those can never be increased above the $20 and $50 they are today. That’s not the case with Advantage Plans. For the benefit year 2021, as many as 200,000 people who currently have popular Western PA Advantage Plans are going to see what I believe are some of the most significant increases in exposure to out of pocket medical bills since I’ve been in the Medicare field, possibly ever, in the form of higher annual Maximum Out of Pocket (MOOP) limits.
The negatives of Supplements in my opinion are as follows:
*Supplement premiums are generally more expensive and will increase as one ages. They start around $80 to $100/month for a 65- year old and people in their 90’s are currently paying upwards of $300/month. Supplements also don’t include Part D prescription coverage. That must be purchased and plans currently average around $18/month. In addition, these Stand-Alone Part D plans, as they’re called, have a deductible on Tiers 3, 4, and 5 drugs of $435. Western PA Advantage Plans that provide Part D have no deductible. Please be advised, however, that many Advantage Plans are more expensive than Supplements and it never ceases to amaze me how many people pay more for an HMO or PPO and are still exposed to $4,000 to $6,700 in bills. In 2021, in almost no circumstance will we be advising anyone to choose an Advantage Plan that has a monthly premium over $50. One of the more baffling aspects of Medicare Advantage is paying more doesn’t guarantee better coverage or co- pays, or a lower MOOP.
*Supplements and Medicare do not provide any dental, vision, hearing, or Over the Counter (OTC) benefits. And except for AARP, Supplements don’t’ offer Silver Sneakers which is a free gym membership. In 2021, the value of these “ancillary benefits” provided by Advantage Plans will be better than ever before. In the past, so called dental coverage meant two free or discounted teeth cleanings and an X-ray. Now several companies and plans offer comprehensive coverage for fillings, crowns, root canals, dentures, and more. However, not all plans provide as many ancillary benefits or the same dollar amount. The Health Insurance Store can help people choose plans that we feel have the best combination of monthly premium, low co-pays and MOOP, as well as the most ancillary benefits, while ensuring they understand how the pros and cons of both Advantage Plans and Supplements should play into one’s choice, which brings me to the last negative.
*Supplements can be medically underwritten. Companies who sell them can deny access based on current or past health. The most common exception is the first time one goes on Part B, known as the Initial Election Period, when Supplement companies must accept anyone who applies. However, if someone who chose an Advantage Plan for lower premiums and ancillary benefits got sick, had to pay $4,000 to $6,500 in bills, and then wanted to move to a Supplement to avoid that from happening again, he or she could very well be denied acceptance into a plan. This dynamic is not explained nearly, or clearly enough to people making their first choice in Medicare plans in my opinion.
If you would like to make an appointment for a no cost consultation during AEP to inquire if you currently have an Advantage Plan, Supplement, or Part D we believe offers the best possible value for the benefit year 2021, give one of our offices a call or reach out to me directly at aaron@GetYourBestPlan.com.
The column runs every Tuesday on page A7 in the Tribune Review.
This is a guide to prepare for the up coming Medicare Annual Election Period. Click on articles, videos and podcasts dedicated to helping those soon to be new to Medicare and just as importantly those who are already on Medicare.
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