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What Supplement (Medigap) and Part D companies and plans are the best and why?
This is Part VI of my Medicare Reset series designed to prepare those on Medicare for the Annual Election Period (AEP) that starts October 15th and runs through December 7th.
Before I get into the answer, I need to make a correction from last week’s column. In it I stated there was a single Advantage Plan for the 2021 benefit year that was going to pay for expensive Type 2 Diabetes drugs such as Ozempic, Trulicity, Jardiance, and Tradjenta through the Doughnut Hole. I was mistaken. Although this company is participating in the Part D Senior Savings Model which ensures insulin will be paid for through the Doughnut Hole, unfortunately the others I listed will not.
While the drugs I mentioned will have a Tier 2 copay that’s the same as other non-preferred generic medications in the Initial Coverage Stage, once the Doughnut Hole is reached, which may be as soon as April, co-pays will then be increased to 25% of the retail cost, as much as $200/month. Those who have questions regarding this please feel free to call or email me personally. I apologize for any confusion.
According to the Centers for Medicare and Medicaid, “All 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 Medigap policies with the same letter sold by different insurance companies.”
Let me start by explaining there are only 11 Supplement plans those on Medicare Parts A and B can choose from, nine for those who turned 65 on or after January 1st, 2020. They are A,B,D,G,K,L,M,N,and high deductible G. Plans F and C were eliminated for sale because they are a rip off, a description I give for lack of space to explain it more tactfully.
The bottom line is this. Every Supplement plan covers the same exact medical services and grants access to the exact same doctors and hospitals nationwide, and providers don’t even bill Supplement companies. They bill Medicare, who then coordinates with the company to pay their share of the claim. Supplement companies also have no say in what’s covered. That’s Medicare’s determination alone, which means no prior authorizations are necessary and doctor’s call the shots, not an insurance company.
I estimate there are 100 or so companies who sell Supplements. Currently we send 99% of our Supplement business to just three. Two of those have the lowest available prices in Western PA, which is our first criterion when considering who we are going to place clients with. Next is what their history of rate increases are. All three we use have an excellent reputation of keeping those to a minimum over the years.
We can get appointed to sell plans with almost any Supplement company, however I’m very leery of doing business with new ones out of fear they may start out competitive, then employ more frequent and larger premium increases, something we see often. If you have a Supplement and didn’t get it through The Health Insurance Store, it’s likely you are overpaying.
I recommend a quick phone call or email for a price comparison on the same letter plan you currently have. Common thinking is, “If rates go up, I’ll just move to another company or plan.” Unfortunately, it’s not that simple with Supplements like it is with Advantage Plan HMO’s or PPO’s, who must accept everyone who has Medicare Parts A and B. Supplements are underwritten, meaning your medical history is taken into account and your application for coverage can be denied. Companies don’t require physicals when applying, a very common misconception. What they do is ask a series of medical questions and review one’s Medical Information Bureau, the medical history equivalent of a credit report. Based on it, and the answers to the questions, companies determine who they accept and decline.
This means there will be people who won’t be able to move to companies or plans that offer lower premiums. And there will almost certainly be a time when those with certain medical conditions are either stuck paying more money to remain on a Supplement, or will be forced to move to an Advantage Plan that can expose them to as much as $7,550 in medical bills each year as well as limit what doctors and hospitals they can use. HMO’s and PPO’s are good options for many, but not everyone.
As far as what plans are the best, we advise our clients to choose between G and N. I recommend N about 90% of the time. Many people are skeptical of N for two reasons, both of which they need not be. My experience is that F and G have been labeled “the best” and in peoples’ minds, choosing Plan N could result in thousands of out of pocket costs. That’s simply not the case. When premium savings are factored in, N is almost always the better value. This will be especially true in five to ten years when I predict premiums on G will be $700 to $1,200 more per year than N, and $1,400 to $2,500 more per year for F. Some also worry about “Excess Charges” that are covered by F and G, but not N. Again, not a concern. First, it’s illegal to bill excess charges in Pennsylvania. Secondly, only doctors who don’t accept Medicare Assignment are able to do that. There are almost zero specialists, and not one full service medical hospital in the country that don’t accept Medicare Assignment. Out of the thousands of clients we’ve enrolled in Plan N since 2010, not once have we heard from anyone who was billed Excess Charges.
As far as Part D prescription plans, those need to be reviewed every single year, even if one’s medications and premiums haven’t changed. Drugs that were covered one year can be taken off Formulary the next. Drug tiers can also change, resulting in higher co-pays. And in 2021, insulin dependent diabetics risk missing out on thousands of dollars in savings if they renew a plan that doesn’t include the new“Part D Senior Savings Program.” Paying $500 or $600 more a year for Part D “just in case,” of what one might be prescribed later in the year, or a plan that doesn’t have a deductible is also a common mistake.
If you would like us to review your Part D and ensure you are enrolled in the most cost-effective plan for the benefit year 2021, we can do that at no cost. Email myself to make that request or call one of our offices. We are also taking appointments for those who want to have their Advantage Plan HMO or PPO reviewed and compared to others on the market or discuss a move to a Supplement.
The column runs every Tuesday on page A7 in the Tribune Review
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