In this podcast Aaron discusses how to add on Prescription coverage to Advantage Plans and Supplements. As the costs of medicines go up, this is a strategy that we are all going to need to implement for coverage.
Interested to find out how much of your Medicare or Supplements pay for Skilled Nursing, Assisted Living or Nursing Home Services? These are big topics that Aaron Zolbrod owner of The Health Insurance Store tackles in this informative Tribune Review Article. Maybe you didn’t read it in the paper, you can always view it on The Health Care Store Website.
My husband and I are investigating making a switch from an Advantage plan to a Supplement, if we qualify, and have several questions which we’ve not yet seen addressed in your columns:
I’m a retired public-school teacher and get my Medicare plan through HOP. Is there anything I need to do during Annual Election Period? How do you normally advise those like me?
Let me first say HOP doesn’t call it Annual Election Period (AEP), rather the Health Option Selection Period. In the past it has run October 1st to November 15th. AEP runs October 15th through December 7th. Look for your HOP packet to arrive early October. Also, please note neither myself nor the other agents who represent The Health Insurance Store are compensated to help anyone enroll in HOP plans.
Nearly all those eligible for HOP who reach out to us get the same advice, although there are different groups to consider. Let’s start with those turning 65 or going on a HOP Medicare plan for the first time. We advise everyone who gets the $100 premium credit to choose the HOP Medical Plan, which has a net cost of $94/ month after the credit is applied. We also advise the purchase of a private Part D prescription plan though our agency because HOP prescription coverage is very expensive, and the co-pays are generally higher than industry standard. The HOP Basic Rx monthly premium is $67 in 2019, compared to the $14.50-$17.20 most of our clients are currently paying. Generic co-pays on the HOP Basic Rx are $8. Most of our clients have Tier 1 and 2 Generic co-pays between $0 and $6. Co-pays on the HOP Basic Plan for Preferred Brands are 30% of the retail cost, with a cap of $100. Brand name drugs now average around $400, so a $100 co-pay for a 30-day supply will be quite normal. Average co-pays for brand name drugs on plans our clients currently have range from $35-$47. The only real advantage with the HOP Basic Rx is the deductible for brand name drugs. With HOP it’s $100. Our clients generally have deductibles from $285 -$415. However, when considering the HOP plan costs $600 or more per year in premium, the net savings is still quite significant, especially considering generic drugs are not subject to a deductible on most plans.
The second group of people are spouses of retirees who don’t get the $100 credit. We advise them to choose a Supplement or Advantage Plan with a private company though our agency, with the exception of those older than 75 and others who can’t pass medical underwriting. A Supplement through a private company costs $70 to $100 less per month for those ages 65 to 67. The savings can be as much as $150/ month when considering prescription plan premiums. It’s also my professional opinion this coverage is as good or better than what HOP provides. Those who choose a $0 Advantage Plan can save as much as $250/ month in premiums. However, keep in mind private Advantage Plans potentially expose those who have them from $3,400 to $6,700 in out of pocket medical bills, compared to very minimal expenses with either the HOP Medical plan, HOP Advantage Plans, or a Supplement from a private company.
The third group of people we encounter are those who didn’t work for the school system long enough to get the $100 credit. If you have questions about your eligibility, call HOP. Their representatives are extremely helpful. I had a gentleman in the office last week who told me he didn’t qualify. We reached out to HOP and found out he was mistaken. With few exceptions, we advise this group the same as we do spouses of retirees; If 75 or younger, go with a private Supplement or Advantage Plan if you can pass underwriting.
Some other items to consider. Those who opt out may never be able to get back into the HOP program. That’s not a huge issue for those who are closer to 65 and aren’t getting the $100 credit. However, unless you want to take an Advantage Plan at age 76 or older, you’re not going to save as much money as those in their 60’s and early 70’s. In the past, HOP has opened enrollment up to those who have opted out. But that was a courtesy and may never happen again.
Also, we never advise choosing an HMO or PPO Advantage Plan through HOP. They’re generally more expensive than the HOP Medical Plan and have network restrictions. The HOP Medical Plan is a Supplement, which means if a provider accepts Medicare Assignment (virtually everyone), you’re covered anywhere in the country with no additional out of pocket costs. And, there are no pre-existing conditions considered when changing from one HOP plan to another, including moving out of an HMO or PPO.
You DO NOT need the HOP Enhanced Rx Plan! I personally have advised over 500 HOP beneficiaries. On only one occasion have I found someone whom it made even the slightest bit of financial sense. It’s costs $700 more per year than the Basic Rx and $1,300 more than the plans we enroll most of our clients in.
One thing everyone on the HOP Medical Plan should do is have The Health Insurance Store evaluate your Part D prescription coverage. We can show you exactly how much money you will save with a private Part D plan in 2020. And unlike the Medical portion of HOP, you can always opt back into HOP prescription coverage every year during the Health Options Selection Period. Call one of our offices if you would like us to provide you with this no-cost service.
I would also like to remind readers that starting in October, “Ask the Medicare Specialist” will be moving to Fridays. And don’t forget to tune into KDKA Radio this Saturday at 7am for my live show, Medicare A to Z.
No-cost, unbiased Medicare plan review and consultation with local, licensed agents
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From Jean: I know you’re a big fan of Supplements, but mine keeps going up at least $15 to $20 every year. With my Part D prescription plan, I’m over $275 per month. Is there anything I can do?
You do have options and I’ll get more specific in a moment.
We’re counseling our own clients who are dealing with the same issue, most of whom are in their mid 80’s or older. You see, once you turn 68, most Supplement companies raise rates every year on the policy’s anniversary date. It’s minimal from age 68 to 80. But after that, they become significant. $15 to $20 increases are common and can add up quick.
But that isn’t the only rate hike people on Supplements will see. There’s another one we call “across the board.” Any Supplement company can make a request for a premium increase to The Pennsylvania Department of Insurance. If they can show that they’re in danger of not making a profit due to claims paid versus what they collected in premiums, they will almost assuredly be granted permission to do so. I got an email from a gentleman recently who received a letter informing him his rates were going up 25%.
My agency only does business with companies who have a history of keeping “across the board” increases to a minimum. The two Supplement companies we have the majority of our clients with, have never had a double-digit rate hike since I started doing business with them. In fact, our favorite company for those who live in Allegheny County hasn’t raised rates on Plan N in over 5 years and just once on plan G (5%).
So, the first thing someone like Jean or the gentleman who had a 25% increase can do is call us and see if a change to another company would help. A move from Plan F or C, to G or N can instantly save someone as much as $100 per month with negligible changes in benefits. But don’t wait for it to happen before you check and see if you’re with a company that has a reputation for higher increases. Chances are good that if you didn’t buy your plan from The Health Insurance Store, you’re either overpaying and/or with a company that will hasten the move across the $200/ month threshold. Please be advised that changing to another Supplement plan letter or company will require you pass medical underwriting.
Last week I advised two current clients whose premiums are now in the $250 range to move to a low-cost Advantage Plan HMO. I know what many of you who read all the columns are thinking. “But Aaron you always write about how Supplements ensure large medical bills are never an issue.” That is correct. Those on Supplements pay virtually no medical bills. However, those paying $250 per month in premium are spending $3,000 before ever going to a doctor. That’s only a few hundred less than what the Maximum Out of Pocket (MOOP), which represents the most one can be billed in a calendar year, is on some plans. As Supplement premiums approach, equal, or exceed plans’ MOOP, their value diminishes.
I don’t ever advise someone to choose an Advantage Plan over a Supplement solely based on this, but if you add in the monetary worth of ancillary benefits like dental, eyeglasses, hearing aids, and Over the Counter allowances, they start to make a whole lot of sense in cases like this. I recommended these clients I’m speaking of do the following. Open a new checking account. Deposit $125 of their savings every month and use it exclusively for co-pays or coinsurance they didn’t have with their Supplement. Take the other $125 and have fun. “Go party,” I joked with them. At the end of the year, if there’s any money left in the account, figure out exactly what was saved and do it all again in 2021.
The right plan must be chosen, however. We prefer those with lower hospitalization co-pays. This limits the chances of reaching a MOOP.
If you’re paying over $200 per month for a Supplement and would like to discuss if moving to an Advantage Plan may be appropriate, give us a call. Have a preliminary discussion with an agent because it isn’t the right move for everyone. Those who are currently receiving or may have a need for Chemo, Radiation, expensive drugs administered in an outpatient setting like Remicade, probably aren’t going to be candidates because it’s almost a certainty the MOOP will be reached. This is often not a good idea either for those who winter elsewhere and need unfettered access to doctors in both their winter and summer homes.
I don’t want anyone to be insurance poor. That’s not a good way to live. I have a saying. The best insurance in the world isn’t worth a nickel if you can’t pay for it.
If you would like to make an appointment to go over options in the final 38 days of Annual Election, which ends on December 7th give us a call. You don’t have to be a Pittsburgh area resident either. If coming to one of our offices isn’t convenient, we can mail you out materials and review them over the phone. Or better yet, interact online in what we call a “virtual appointment.” It’s almost like sitting across the desk from an agent.
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No-cost, unbiased Medicare plan review and consultation with local, licensed agents