Ask the Medicare Specialist
QUESTION:
Question from Kent: I’ve read your articles for some time now. Very interesting…but still a bit confusing. I realize the starting point is getting your Medicare card which gives you Medicare Part A. My question is how do most people supplement this? I must take into consideration that I have MS and get an infusion drug twice per year. Some of my friends have told me to look at AARP, but what is the best and most economical combination to get to go along with Medicare A? I’m hoping there is a logical track most people take to offer some guidance.
ANSWER:
There are several topics that need addressed here. First, I realize how confusing it is going on Medicare for the first time, or even what those already enrolled should do from year to year. I want to make it clear that my columns, webcasts, podcasts, and Facebook Lives are not a substitute for a consultation with me or another of our licensed and experienced agents.
What most people do is choose a Supplement or Advantage Plan, which are the only two options for those who aren’t Federal retirees, to help limit costs vs Original Medicare. My last column went into detail about the differences between Supplements and Advantage Plans which can be found on our website.
As far as specifically stating which type of plan and what company or companies are better and more economical as a rule or for most? I can’t and won’t answer that question here because every individual’s situation is different. Also, no one should be taking advice or picking a plan based on what a friend or family member has or what statements they make. There are too many variables such as access to a retirement plan, VA benefits, PACENET, along with one’s health conditions, budget, risk aversion, and more. In this case, AARP sells both Supplements and Advantage Plans. The wrong one could easily be chosen if not careful. In Kent’s case, it’s vital he understands that his MS would keep him from ever getting a Supplement again six months to a year after his Part B effective date or enrolling in an Advantage Plan. If he consults with us, we’ll highly recommend a Supplement for this reason.
Another rationale for Kent going with a Supplement is how infusion therapy, which Kent indicated he gets twice a year, is covered. Supplements pick up the 20% that Medicare Part B does not. With an Advantage Plan HMO or PPO, Kent would be responsible for the 20% for this particular service. Infusion therapy generally runs $2,000 and up per treatment, resulting in a bill of $400 or more, meaning any premium saved by going with an Advantage Plan would be eaten up.
Ken indicated the need for Part A, which is free. But to purchase a Supplement or Advantage Plan, Part B is necessary as well. Many people who are getting employer provided coverage don’t need Part B when they are first eligible at age 65 and can opt out. Those who need to enroll usually pay the standard cost of $170.10/month. Advantage Plans can be as little as $0, with the most popular among our clients and those we recommend the most running $25 to $40/month. Supplements start at $75 to $85/month for those 65 to 67 years of age and cost around $3 to $4 more/ month for every year older than 67.
As far as wondering if a Supplement with AARP would be best? Again, don’t take what I call “over the fence advice” from neighbors, friends, or family members. When it comes to Supplements, policies can only be sold labeled with letters A through N. There are nine choices in plans, and we generally only recommend G or N. Cost is the only difference between companies selling the same letter plan. What’s covered as well as access to doctors and hospitals is identical regardless of the carrier. Plan N with AARP is $31 more per month than the least expensive company for a resident of Allegheny County and $27 more for G.
Thanks for the great question, Kent. Readers, please keep them coming and thank you so much to those who loyally keep up each week.
If you have questions of a more personal nature, would like to speak with an agent, or make an appointment for a no cost consultation, give us a call.