Ask the Medicare Specialist

QUESTION:

Question from Bruce: Nice article explaining PPO’s and HMOs in Sunday’s Post-Gazette. If someone were to sign up for a PPO Advantage Plan that offers nationwide coverage, would there be hospitals in all cities that could be accessible at in network costs? Also, my wife’s close friend has an Advantage Plan PPO and was just diagnosed with pancreatic cancer last week and is a smoker. She will go on chemotherapy soon. She signed up for Medicare around a year ago. If it’s less than one year, can she move back to Original Medicare and a Supplement without going through underwriting?

ANSWER:

To answer the first of John’s two questions, yes. There are hospitals all over the country that are in network with the company I referred to last week. Nationwide, I estimate 95% or more of all non-VA full-service hospitals would be in network as well as any physician who was employed by those hospitals. For those who travel for extended periods of time, have two homes, or take several vacations per year and can’t get a Supplement due to a pre-existing condition, or don’t wish to spend the extra money on a Supplement, there are two specific PPO plans we recommend to our clients. My apologies for not being able to name them. CMS regulations don’t allow me to do that. If you would like to know if your PPO is one of those two plans, which company offers them, or are interested in enrolling in one, feel free to reach out to us. They are 5-Star rated, making them available all year round.

As far as Bruce’s wife’s friend, who we’re going to refer to as Joyce, once again, we have an unfortunate and far too common scenario where a Medicare beneficiary was misled by an uninformed, untrained, or unethical agent. I say this because in the course of our conversation, Bruce also told me that Joyce was told by the agent, who signed her up at age 65, that in the future she could move to a Supplement anytime she wanted and led her to believe it was possible regardless of her current or prior health conditions. That is absolutely false if it’s been over six months to a year since her first enrollment in the Advantage Plan.

Bruce is correct that when one enrolls in an Advantage Plan at age 65 there’s a 12-month period where it’s possible to move to Original Medicare and get a Supplement without going through medical underwriting. However, unless Joyce qualifies for what is known as a Special Election Period (SEP) which allows for a change outside of the Annual Election Period (AEP) that runs from October 15th to December 7th, she would have to wait until then to do so. Let’s say today Joyce is 9 months removed from her initial enrollment in the PPO. By the time October rolls around, her 12-month window to get a Supplement will be up, meaning Supplement companies can then deny her application due to her cancer diagnosis.

I’m guessing the agent who enrolled her failed to mention that all Advantage Plans, regardless of premium cost, are subject to 20% coinsurance for chemotherapy. It’s not uncommon at all for chemo to be billed at a rate of $10,000 or more per infusion, meaning a responsibility of $2,000 to anyone with an Advantage Plan who isn’t also on Medical Assistance. Those bills wouldn’t stop coming until they reached one’s annual Maximum Out of Pocket (MOOP), which range from $4,000 to $7,550.

He probably also didn’t disclose that smokers pay more for Supplements than nonsmokers unless they enroll withing six months for their initial Part B effective date. So, even if Joyce could pass medical underwriting and buy a Supplement, she would have to pay a higher premium for the rest of her life. There is nothing wrong with choosing an Advantage Plan. They offer excellent value for those who remain just relatively healthy due to lower premiums and all the ancillary benefits like dental, vision, hearing, and OTC allowances offered in the best HMOs and PPOs. But the pros and cons must be explained, something we do with every single person we meet who is going on Medicare for the first time. In reality, these benefits aren’t really free for those like Joyce who will likely end up paying as much $7,550 in medical bills, which is the most common MOOP for PPOs. And statistically one in 20 of those enrolled in Advantage Plans meet their MOOP each year.

I believe it’s safe to say if Joyce would have gotten a more thorough and proper explanation of the differences between Advantage Plans and Supplements, there’s at least a 50/50 chance she would have chosen a Supplement instead.

I would like to remind the readers that consultations with the trained and licensed agents at The Health Insurance Store are always no cost and can be provided in office, over the phone, or via the internet in a Zoom style meeting.

Please give us a call if you would like to schedule an appointment or have questions. Feel free to email me personally at aaron@getyourbestplan.com as well.