Ask the Medicare Specialist

QUESTION:

Should I switch to Supplement Plan F before the end of the year since it’s going away in 2020?

ANSWER:

I realize I answered a similar question not too long ago, but we are getting this question over and over. My answer is ABSOLUTELY NOT! We’ve been hearing from clients who have gotten that advice from other agents. Anyone who would recommend Plans C or F either doesn’t know what he or she is doing or pushing a more expensive plan because it pays a higher commission. These plans are often described as “the most comprehensive” or “the best,” leading people to believe that there could be exposure to large medical bills if they choose any other plan. That’s simply not the case.

For those who are unaware, Medicare Supplements, aka Medigap plans, are labeled with letters A through N and highly Federally regulated to protect the consumer. There are only 11 Medigap plans to choose from, soon to be nine when F and C will no longer be available for purchase as of January 1st.

The Centers for Medicare and Medicaid ( CMS) mandating the end of the sale of these two plans is just that, consumer protection. The only benefit plans C and F provide vs Plan G is coverage for the Medicare Part B deductible of $ 185. Other than that, the plans are identical. So, there’s no reason whatsoever to spend $ 300 to $ 1,000 more per year on premiums, the range of how much more money people are paying for Plan C or F, to get rid of a $ 185 worth of bills.

Not only am I advising people who are currently Medicare eligible or going on for the first time in 2019 not to choose Plan F or C, I’m also adamant that anyone who has either plan move to Plan G or N immediately if healthy enough to pass medical underwriting. Unlike Advantage Plan HMO or PPO’s, Supplements plans can be changed at any time during the year, so you don’t have to wait until the Annual Election Period ( AEP) in October. Like I said, do it now if you can and don’t risk being diagnosed with a condition that will keep you from changing plans in the months or years to come. We have seen much steeper rate increases on Plans C and F than G and N over the last five years and that’s going to continue as more and more healthy people escape to lower priced plans that offer better value. As that occurs the pool of people remaining on C and F will be less healthy one and utilizing medical services at a higher rate. This ultimately results in Supplement companies paying out more in claims, reducing their profit margins. Once those margins hit a certain level, the companies can request and receive permission from the Insurance Commission to raise rates.

Across the board rate hikes on Plans F and C happen almost every year with virtually every company. The Supplement company we recommend most often for those who reside in Allegheny County has had only one of these rate hikes on plan G, and none on Plan N over the last five years.

On a different note, please remember that Advantage Plans ARE NOT Supplements. Supplements are designed to pick up the portion of the bill Medicare does not, with only the $ 185 deductible as the lone exception for plan G, and the same deductible and $ 20 and $ 50 copays at the doctor and Emergency Room respectively on plan N.

Advantage Plans are not designed to pick up the gaps in Medicare. They are designed to pay in place of Medicare. Those who don’t understand that concept or don’t know the differences and nuances of both types of Medicare plans need to get that education. In my opinion it’s the most important thing you can do if you are on Medicare or will be soon. I recommend doing that before AEP, evaluating if making a move from an Advantage Plan makes sense or not, is affordable, and if you can pass medical underwriting. Remember there’s never a fee for an appointment at any of our office locations or over the phone.

We are also in the process of building state of the art studios where we can do what I’m calling “virtual appointments.” So, for those of you who are a bit further from one of the offices and have been hesitant to drive to us in the past, you will soon be able to meet with myself or another licensed agent, see our faces, and get the same quality consultation from your home. All you’ll need is a computer or an iPad and the internet.

If you have questions regarding this column or another Medicare issue, contact us via phone or our website. If you would like to submit a question for a future column or reach me directly, I invite you to send an email to aaron@getyourbestplan.com. You can also follow The Health Insurance Store on Facebook.