Ask The Medicare Specialist

QUESTION:

Becca: A) I am a 68-year-old woman in very good health. I have no significant health problems, take no medications, eat well, and exercise.

I moved here in 2021 from California where I had a plan an Advantage Plan, which I loved because it was inexpensive and covered everything. B) In 2022 I was advised to switch to a United Health Supplement plan, which I did. I was paying $108 a month, plus just over $7 for a Stand-Alone Part D Plan, even though I was taking no medication. C) That seemed like a lot to pay for someone in good health, so last year I switched back to an Advantage Plan because it was $75 less. It seemed like a good idea, but since you’re always only one doctor’s visit away from being told there’s something terribly wrong with you, I wonder if I made the right decision. D) I may be saving money now, but if I ever did get diagnosed with a serious disease, I want to make sure my insurance offers good coverage because I am not a wealthy person. Did I make a mistake?

ANSWER:

There are several topics that need addressed in Becca’s question so I’m breaking them down into sections to make for an easier read.

A) Becca mentioned that she “loved” her Advantage Plan because it was inexpensive and “covered pretty much everything.” She’s super healthy so she probably hasn’t used either of her Advantage Plans for much other than routine or preventative doctor visits. If she’s like most people with Advantage Plans who’ve never been through serious health issues, she likely has no clue what her out of pocket costs would be, how services or claims are approved or paid in those situations. She also may not be aware if she has a diagnosis of a rare disease or cancer, she does not have access to possibly the only health care systems or hospitals that could treat her such as the Mayo Clinic, MD Anderson Cancer Center, Johns Hopkins, etc.

B) No one should forgo prescription coverage because they’re currently not prescribed any medications or only taking those that cost a few dollars. If you were to be prescribed a brand name drug during the year and didn’t have Part D coverage, you would be on the hook for the entire cost of the medication and would not be able to get a plan until the following year. Oral chemo drugs run $10,000 per month or more. Without drug coverage that entire cost would be your responsibility.

C) Becca said it perfectly. We’re all one doctor’s visit away from no longer being healthy and battling a serious disease. I will add that accidents can happen to anyone as well. Although it’s not what many people like to talk about, we always make sure those we sit down with understand worst case scenarios and how their insurance would work under those circumstances. This may make a difference in the choice they make and at least there will be no surprises as far as what bills one could expect, how or where care could be received should there ever be a diagnosis of cancer, an auto immune disorder, the need for ongoing injection or infusion therapy, among other more costly treatments.

D) Again, Becca brings up future concerns. Did she make a mistake in moving from a Supplement to an Advantage Plan? If the pros and cons are honestly explained to someone prior to making a choice, I would never in hindsight tell someone they made a mistake by choosing one. As far as getting large bills that she’s exposed to with an HMO or PPO that she wouldn’t have had with the Supplement, that hasn’t happened and hopefully won’t before the end of the year. If she also uses her ancillary benefits that don’t come with Supplements such as her comprehensive dental, got her no cost eye exam, used her allowances for eyeglasses and over the counter products, and went to the gym, she saved almost $1,000 in premiums and got more than another $1,000 in value of goods and services. Imagine the savings if she stays just relatively healthy for the next five years. But here’s another scenario. Becca is diagnosed with cancer before the year ends and needs chemo for six months. The costs for Part B drugs are 20% of the billable amount on all Advantage Plans. Becca would be certain to be on the hook for her MOOP, which run from $4,000 to $8,300. The MOOP resets every January so she would meet it again in 2024. I’m just scratching the surface of the pros and cons of Advantage Plans vs Supplements. Too many other agents don’t’ go over them extensively enough or at all. Some don’t even understand the differences. Others want to only sell what pays the largest commission and there’s a substantial difference in how much and how long agents are paid.

I’m going to write about this almost every column from now until the Annual Election Period starts in October. You must learn the differences between the two types of plans, not only if you’re going to be new to Medicare, but for those who’re already are on a Supplement or Advantage Plan. Although it very well make a ton of sense for you personally to move from a Supplement to Advantage Plan in 2024, as we expect to help and advise many to do, it’s not a smart move for a large demographic of seniors for various reasons. Don’t make that change without speaking with myself or another agent first.