Ask the Medicare Specialist

QUESTION:

What are the pros and cons of both Medicare Supplements and Advantage Plans?

This is the Part III of my “Medicare Reset” series as we come closer to the Annual Election Period that starts in October 15th, we only have room to discuss Advantage Plans today, so we will address Supplements with next week.

Before I get into the answer, I want to let everyone know there is a surprising and unexpected development in Advantage Plans for the benefit year 2021 that is going to affect as many as 200,000 Western Pennsylvanians. Several very popular Advantage Plan HMO’s and PPO’s are increasing their annual Maximum Out of Pocket ( MOOP) as much a 100%, to just over $ 7,500, for 2021. The MOOP represents the most one could be billed for medical services in a calendar year and I have heard estimations that 1 out of 20 people on Advantage Plans meet their MOOP each year. Our agency prefers our Advantage Plan clients to choose plans that have a lower MOOP, per stay hospital co- pays, and a premium under $ 50 in 2021.

ANSWER:

Let’s start with the pros of Advantage Plans which are as follows:

* In my opinion the number one benefit of Advantage Plans are the low costs, as little as $ 0 per month. With Supplements averaging $ 100 per month or more, potential premium savings on Advantage Plans could be as much as $ 6,000 over a five- year period if one stays relatively healthy.

* Almost all Advantage Plans come with Part D prescription coverage embedded at an all- inclusive cost. Those who have Supplements must buy a separate “Stand Alone Part D” plan in addition to their Supplement that will start at $ 10 in 2021. In addition, almost all Stand Alone Part D plans have a deductible of over $ 400. There is no Part D deductible on Advantage Plans.

* Advantage Plans come with ancillary benefits such as dental, vision, hearing, OTC allowances, and Silver Sneakers, which is a free gym membership. It’s our opinion for the 2021 benefit year that not only should your Advantage Plan cost less than $ 50, have a MOOP lower than $ 7,500, and per stay hospital co- pays vs per day, it should also provide at least $ 2,000 in annual comprehensive dental benefits.

* Advantage Plans have dedicated customer service reps that can help with booking an appointment, doctor referrals, billing questions, etc. And you can talk to an actual person with very little if any hold time. That’s not the case with Medicare. Supplement companies can be helpful when called, but not in the ways I just mentioned.

* There is no medical underwriting with Advantage Plans. You can move from plan to plan and company to company regardless of your previous or current health issues. They must accept everyone and there are no pre- existing condition clauses. Supplement companies on the other hand are able to discriminate on who they accept in their plan.

The negatives of Advantage Plans are as follows:

* Advantage Plans are HMO’s and PPO’s and have network restrictions, meaning you can be limited to what medical providers you can use, unlike Supplements.

* Premiums and benefits can change annually. In the last few years, premiums have remained very stable, even gone down. However, co- pays and out of pocket costs can be increased, sometimes dramatically as I indicated is going to happen in 2021. I find it very concerning.

* Advantage can expose those on them to thousands in out of pocket costs for services such skilled nursing, durable medical equipment, chemo or other infused or injected drugs, radiation, prosthetics, and multiple hospitalizations, up to $ 7,550 in 2021.

* The biggest risk of taking choosing an Advantage Plan in my opinion is that once enrolled in one, it may become impossible or unaffordable to enroll in a Supplement due to those companies’ ability to discriminate based on pre- existing conditions.