Part of a CtWatchdog series on the cost of healthcare and prescription drugs.
If you are at least 65 years or older, you’re probably being inundated with letters, postcards and TV ads urging you to sign up for a Medicare Advantage plan, switch plans or keep the one you have.
The reason for the advertising blitz is because Medicare recipients have the annual window of opportunity from Oct. 15 to Dec. 7 to take those actions.
If you have Medicare, it is an excellent opportunity to review your health plan to make sure you have the best coverage considering your health condition, age, and location.
Medicare Advantage plans are great for many people, but they are not for everyone. If you can afford it, you are much better off with a Supplemental plan which we will discuss below.
If you have a Medicare Advantage plan and are happy with it, you should still examine the information your company has or will soon provide you, as it will list changes for the next year. Unfortunately the vast majority don’t review their plans.
The document will include any changes in fringe benefits as well as which primary physicians, specialists, and hospitals are still in your network. (Check carefully because your doctors might have been dropped.) It will also include which medications are still covered.
Medicare – especially Advantage plans – are complicated, as scores of insurance companies sell these policies and they all have different plans. They don’t offer the same plans in every location.
While every Advantage plan receives the same amount of money per enrollee from the government, insurance companies provide different services and have different rules on which physicians you can use without paying extra.
Each company has additional fringe benefits not offered by Original Medicare. Each plan limits which primary doctors, specialists and hospitals you can use as well as which prescriptions are covered. Some plans give you greater freedom to use out-of-network doctors but offer fewer fringe benefits.
There as so many variables that it is unlikely you will find the best plan in your circumstance without getting professional help.
Every state has free one-on-one counseling available through a federally funded State Health Insurance Assistance Program (SHIP).
“These federally funded programs are not connected to any insurance company or health plan. SHIPs were established to help beneficiaries with plan choices, billing problems, complaints about medical care or treatment, and Medicare rights,” says Consumer Reports.
You can find your state’s telephone number and website here.
If they don’t provide you enough assistance, there are a host of private companies that will analyze your needs and recommend their best plan.
Their agents are highly trained and represent many insurance companies. Most provide the service for free and earn their money from commissions paid by the insurance companies.
Some companies specialize in giving advice on Supplemental plans, some on Advantage plans. If you don’t know which one is best for you, look for agents who can advise you on which one is most beneficial.
I don’t know which ones to recommend because different agents represent different insurance companies in different states. My suggestion is to call two to get differing advice.
There is one firm that charges a fee for Medicare analysis that is highly regarded. The firm, 65 Incorporated, charges $599 for a consultation but provides unbiased assistance as it receives no commission from insurance companies and has access to every possible plan.
I know it’s a lot of money, but it might be worth it if you just turned 65 and you don’t know whether a Supplemental or an Advantage plan is best for you.
Advantage plans are enticing:
Many are free, others charge a small monthly premium.
Some will reimburse you for part or all what the government charges for the Medicare Part B. In addition, some will even give you extra money each month.
Most will cover some of the cost for hearing aids, prescription glasses, dental work, and prescriptions.
Some will pay a portion of health club memberships.
Some will provide transportation for doctor visits.
Some will pay for medical alert devices.
Some will even pay to build a handicap ramp at your home.
If you stay within your network, your annual co-pays are limited to $7,500 (other than for prescription drugs), but some plans don’t charge any medical fees.
The reason Advantage plans can offer all these perks is because they are betting that they can provide your medical care cheaper than what Medicare pays them.
If you are healthy, live in an urban area, and have limited financial resources, your best bet might be to sign up with one of these Advantage plans.
But Advantage Plans Aren’t For Everyone.
Under some circumstances, a Supplemental plan or even Original Medicare may be better choices. And they are less complicated, as there are fewer options.
“If you have chronic conditions or severe health needs, you may want to think twice about Medicare Advantage because of the requirements for pre-authorization and staying in-network,” Melinda Caughill, co-founder of 65 Incorporated,” told Consumer Reports.
“If you need to see multiple specialists, and you have to get referrals for each appointment or fight to overturn denials, it can be really challenging,” Caughill says.
If you live in a rural area, there are probably few doctors and few medical facilities. An Advantage plan will even more limit who you can get to provide your health care. Because of the smaller pool of primary doctors and specialists in your network, you might find it harder to get an appointment or to have access to the best doctors.
A recent study by Health Affairs found that many low-income seniors in rural areas switched from Advantage plans to Original Medicare because of poor access to medical care.
If you travel a lot – let’s say you winter in Florida – most Advantage programs won’t cover you our of state except for an emergency.
If you can afford it, a Supplemental plan is far superior to Original Medicare.
While they have no fringe benefits, nor prescription coverage, they permit you go to any doctor or hospital in the U.S. that accepts Medicare. And you can purchase prescription coverage through Medicare Part D.
There are 10 different Supplemental plans with Plans F and G being the most popular. They are almost identical with both paying 100% of fees to primary doctors, specialists, and hospitals.
No matter which insurance company you purchase them from, the plans are identical. However, the premiums are different.
The monthly premium for the Plans F and G range from $90 to $476 (determined by your age and health) and increase a couple of percent each year.
If you have a chronic condition, your co-pays from an Advantage plan or from Original Medicare may end up costing more than what you might pay for a Supplemental plan.
Both the F and G plans also have high deductible choices and are less expensive. Not every insurance company provides deductible plans. The first $2,490 in 2022 are paid by customers. Both the deductibles and premiums can increase annually.
As I was fortunate to be in good health when I turned 65, I felt comfortable in signing up with a United Healthcare Advantage plan through AARP. It worked well for me in Connecticut and in Florida.
When I turned 70, I started thinking about what would happen if I began having serious health issues. I decided to switch to the Supplemental high deductible Plan F through Colonial Penn with now $134 monthly premiums.
As part of this story, I checked to see if I was getting the best deal and had an agent analyze my plan.
He found the same plan from Humana for $86. However, Humana turned me down because of one medication I was taking.
But since Medicare prohibits companies from dropping you from a Supplemental plan, the medication does not affect my current policy.
It’s important to keep in mind that in most states you cannot simply switch from an Advantage plan to a Supplemental plan. You can be denied because of the medication you take and your health. The goes if you want to switch from one Supplemental plan to another.
All Medicare recipients can sign up for a Supplemental plan during the first six months they are on Medicare no matter what preexisting medical conditions they have. They also have that option during the first 12-months on an Advantage plan.
Residents of Connecticut, Massachusetts, New York and Maine have special protection – insurance companies must permit all Medicare recipients to join their plans at anytime without even asking about their health status. They cannot charge higher rates based on medical conditions.
In the rest of the country, insurance companies can decide who to allow and who to exclude from their Supplemental plans.
Those that can’t afford a Supplemental plan and don’t want an Advantage plan, can stay with Original Medicare. They will be able to see any doctor or go to any hospital that accepts Medicare, but they will have to pay the 20 percent of the fee allowed by Medicare.
While Advantage plan members must rely on the prescription plan offered by their insurers, Original Medicare and Supplemental policy holders will have a choice of many prescription plans offered through Medicare. The firm you chose to assist you in deciding which plan and which company you use, will also guide you on which prescription plan to purchase, depending on your medications.
Keep in mind that you can also get great deals on drugs through the internet as well as through Canadian pharmacies – which is technically illegal, but the U.S. government generally looks the other way.
An Example Of Your Options Between Medicare Advantage and Medicare Supplemental Plans
Earlier this year I had a colonoscopy and an endoscopy.
If I had an Advantage plan, my primary physician could have rejected both and insist that I just use an at-home stool test like FIT or Cologuard.
However, since I have a Supplemental plan, I didn’t need my primary physician’s permission. I did ask him which gastroenterologist he uses.
I made an appointment with his specialist, who happens to be the president of the state’s gastroenterologist society.
The gastroenterologist wanted me to also have an endoscopy because of my long history of heartburn. Since I have a Supplemental plan, I didn’t need permission from my primary physician for the procedure.
If I had the regular Plan F, I would not have had any out-of-pocket expenses. But since I had not used up my deductible, I ended up having about $300 in co-pays for the doctor, biopsies, as well as for the anesthesiologist.
Medicare Savings Program
Some low income seniors might qualify for financial help through the Medicare Savings Program.
“Only the state can determine if an individual qualifies for coverage under one of the programs. Many states apply different standards and methods to determine MSP eligibility. Some states, for example, have no resources for these programs or figure the income and resources differently.”
