Ask the Medicare Specialist

QUESTION:

Question from Jim: In 2017 I signed up for Medicare Parts A and B, Aetna Supplement Plan G, and XYZ Part D prescription plan. My Aetna started at $137/ month and it’s now $226. My Part D premium has also increased. Is it possible to switch to another carrier at this time and/or change to plan N? How about switching from XYZ Part D to a better prescription plan? My meds are Lovastatin, Lisinopril, and Levothyroxine. I’m not interested in an Advantage Plan.

ANSWER:

My apologies for not being able to refer to Jim’s Part D company by name. The Centers for Medicare and Medicaid (CMS) regulations prohibit me from referring to a specific Part D company or plan.

As far as changing to another Supplement letter or company, that indeed can be done at any time during the year. However, as I’ve mentioned in previous columns, to do so, one would be required to go through, and pass, medical underwriting. The ACA, aka Obamacare, did not forbid Supplement companies from denying applications based on one’s medical history. All ask a series of questions such as: In the past 3 years have you been diagnosed, hospitalized, or taken medication for internal cancer, heart attack, stroke, COPD, or atrial fibrillation? Are you an insulin dependent diabetic? Do you have an auto immune disorder, etc. If you can’t answer all the questions “no,” you won’t be issued a policy. Keep in mind that different companies may look back for longer or shorter periods of time, and they all ask different questions. The great advantage of being brokers, like we are at The Health Insurance Store, is our ability to shop multiple companies and find one that will approve clients for a Supplement at a fair premium. In addition to Medical Underwriting, Supplement companies also review what is known as a Medical Information Bureau (MIB), which includes codes for every medical or prescription claim that has ever been paid by a health insurance company, be that an individual ACA, employer, or Medicare policy. Supplement companies employ people who are trained to read those codes and determine what kinds of treatments and medications people have received. If they see something they don’t like, that too can be a reason an application is denied.

I want to address the large increase in Jim’s Supplement Plan G in just five years. I’ve written column after column warning Medicare beneficiaries of this exact outcome. All our licensed agents explain to clients who are going on Medicare for the first time that Plan G increases much much faster than N. It’s why approximately 98% of our clients who prefer Supplements go with Plan N.

Again, I’m adamant that Jim and anyone else on Supplement G, F, or C move to Plan N immediately if they can pass underwriting. There’s absolutely no difference in what is covered by these three plan letters and N. The only contrast between G and N is a $20 co-pay for physician’s office visits, be that a PCP or a Specialist. And there are no co-pays for Physical Therapy, blood work, X-Rays, CT scans, surgical procedures, etc. Assuming Jim went on Medicare at age 68, is now 73, and can pass underwriting, he can get Plan N for just $111/month, $1,860 per year less than his current Plan G.

G will just keep going up as there have been and will continue to be rate increases across the board every year. Jim mentioned he doesn’t want an Advantage Plan. Well, it won’t be long, three to four years, considering the increases we’re seeing now, before his Supplement G will be over $300/month, $400/month six to eight years from now. He may not have a choice but to move to an Advantage Plan at that point. As much as I like Supplements, it’s my professional opinion that when they get to the $200 to $300 per month range, the value and benefits they offer versus the best Advantage Plans become diminished for many or most. In comparison, Plan N, with the three companies we write almost all our Supplement business, have only had one single across-the-board rate increase in the past five years, meaning it’s going to be a very long time before they approach $200/ month.

As far as Jim’s prescription premiums going up, he made the very common mistake of not having his Part D reviewed like we do for all our Part D clients every year. Not only did his premium rise, but his deductible also increased from $0 to $485. He could have moved to a plan with the same company or one with another company that would have had $0 to $1 co-pays for all three of his meds and saved between $500 and $620 in premiums since his plan changed two years ago. Unfortunately, moving from one Part D to another outside of Medicare’s Annual Election Period (AEP), which runs October 15th to December 7th each year, is not possible except for people with lower incomes or those who move outside their plan’s service area. If you would like to make an appointment for a no cost consultation or have questions regarding this column or any other Medicare, health, or life insurance related topic, give us a call or email me personally, aaron@getyourbestplan.com.