Ask the Medicare Specialist
QUESTION:
I’m turning 65 soon and have been going back and forth trying to decide between choosing an Advantage Plan or a Supplement. I read all your columns, but I’m hoping you can tell me what you consider to be the number one reason someone might choose each as well as your number one concern you have regarding both types of plans in hopes it will help me make my final decision.
ANSWER:
Let’s start with Advantage Plans. As I often do, I want to remind readers HMO’s and PPO’s are not secondary to Medicare or designed to pick up the portion of the bill, generally 20%, that Medicare doesn’t pay. They are very different from Supplements regarding who pays claims, how claims are approved, what doctors and hospitals one can access, and more.
As far as I’m concerned, the number one reason to choose an Advantage Plan is for the premium savings and dollar value of the ancillary benefits such as comprehensive dental, vision, Silver Sneakers (free gym membership), as well as hearing aid and Over the Counter (OTC) product allowances that some Advantage Plans offer.
The average cost of the combination of a Supplement and Part D prescription plan for someone 70 or younger is around $115/month. Advantage Plans can be purchased for as little as $0 and the most popular currently among our clients cost between $30 and $50/month. Using those figures, annual premium savings can be $780 to $1,380. Over five years, $3,700 to $6,900. Granted, some, or more than that could be lost due to medical bills, as Advantage plans expose those who have them from $4,900 to $7,550 per year, the figures that represent the annual Maximum Out of Pocket (MOOP). However, if one stays relatively healthy and avoids the more costly services such as chemo, radiation, Skilled Nursing, outpatient infusion or injection therapy, along with a couple other more uncommon expenses, much of this savings can be realized.
In addition, those who utilize Silver Sneakers, just a minimum amount of dental benefits, and maximize their OTC and eyeglasses benefits can receive $1,000 or more in goods and services. Add five years of that to the premiums savings, and you can see the how HMO’s and PPO’s can be extremely attractive.
Be advised, not all plans offer all these benefits or the same amount in terms of dollar value. In addition, they are not guaranteed from year to year. The comprehensive dental and OTC allowances are very new, only offered by some companies the last three years. I’m hopeful they are always provided, and as generous as they are in the 2021 benefit year. However, I’m concerned they aren’t sustainable. After all, Advantage Plan companies are for profit entities. The biggest risk of taking an Advantage plan is not the possibility of meeting the MOOP one out of five years or so. For me, it’s the possibility of being diagnosed with a medical condition such as heart disease, insulin dependent diabetes, an auto immune disorder, Atrial Fibrilation, certain cancers, among others, keeping one from ever being able to enroll in a Supplement. Other than up to the 12 months after one goes on Part B for the first time, Supplement companies can discriminate on who they accept based on current or previous health issues.
Moving on to Supplements, it’s really hard to only pick one reason why one would go that route. Other than offering the security of never having to worry about paying expensive medical bills and having access to every full-service medical hospital in the country, there is something I don’t write about very often. It’s the fact Supplement insurance companies do not have any say in what is covered, where one receives treatment, or when one receives treatment. Medicare determines that and lets the treating physician decide what is medically necessary and appropriate. There are virtually no medical services that require prior authorizations such as CT Scans and MRI’s, surgeries, Skilled Nursing, home health care for those with Medicare and a Supplement, unlike Advantage plans. In addition, those on Supplements cannot be told thier insurance isn’t going to pay for additional days in the hospital or a Skilled Nursing home. Medicare allows lets the doctors “steer the ship’ and determine on a patientby-patient basis what is the best course of care and treatment(s).
Although it’s far less common that it was years ago, the practice of denying claims, patients being told their insurance company is not willing to pay for additional inpatient hospital services, or requiring physical therapy prior to getting a surgery does happen from time to time to those on Advantage Plan HMO’s and PPO’s.
When it comes to the risks of taking a Supplement, it’s my opinion there are none, unless one might consider paying $100 or more a month for a health plan and rarely using those benefits, risky.
In closing, these items I’ve mentioned may be what I find most important or concerning, but not to others. Consultations with myself and the other licensed agents of The Health Insurance Store to help Medicare beneficiaries consider all the positives and negatives of both Advantage Plans and Supplements before making a choice or changing plans are always no cost. As are the services we provide after processing a new clients application(s). We get involved and take care of any problems that may arise after one buys a plan. This includes issues or questions regarding premiums, medical bills, claim denials, and prescription costs. In fact, I’ve just filled a new position within my agency, “Prescription Drug Caseworker.” Our newest employee, Tony Diroma, will now be available to counsel any client who hits the Doughnut Hole or has trouble affording their medications. Again, his services and all others we provide are offered as a no-cost benefit of being an active client.
If you would like to become a client of The Health Insurance Store, would like an appointment, or have any questions related to Medicare or any other health insurance, please call on of our office locations, visit our website, or email me personally.