Almost every appointment I run, I get some version of the question “Should I get a supplement or advantage plan?”. I can usually sense the tension in their voice as they ask the question. A gentleman I helped last week told me had spent the previous two weeks searching and studying online but was more confused by the time he was finished with his research. After 30 minutes, he was happily enrolling in a plan that was vastly superior to what he currently had. After we were done, he expressed surprise and relief as to how easy it actually was to understand…despite the mountains of confusing information he had been trying to digest online! If you don’t study it all the time, Medicare can definitely be confusing!
So, when looking at this question, let’s dig in. Before we do, however, relax, all of these policies are excellent. The key is just getting you into the one that fits YOU.
In my opinion, it really comes down to your individual circumstance and preference. What type of care and access do you want and/or need? Are you willing to pay for it?
Most people trend nowadays towards Medicare Advantage plans. They are housed within Medicare Part C and are sold by private insurers who are closely overseen by CMS. The primary reason they are popular is that, in most areas, you can opt for a plan with a low or even a $0 premium. These plans are guaranteed issue and you can make changes a least once per year. In most cases, you will have to choose a primary care doctor and get referrals for specialists and other types of care. In the case of a $0 premium, if you have a good year, you might have little or no additional out of pocket costs for medical bills. If you have a bad year, you will be paying some co-pays and coinsurance up to a maximum out-of-pocket limit. Another nice upside is most Advantage plans include Part D prescription coverage within the benefit structure. Depending on where you live, there are HMOs, PPOs, PFFS, MSAs, and other forms available. So, if you like the idea of a small or $0 monthly premium, don’t mind having a PCP or getting referrals, this might be the perfect plan for you!
Medicare supplements have been around for years and have been very popular. Though they have been recently upstaged somewhat by Medicare Advantage, they remain very popular and are not going away anytime soon! Supplements, like Medicare Advantage, are also sold by private insurers. They operate in conjunction with Original Medicare Parts A&B. Note: Medicare supplements do not cover Part D prescription drugs so a Part D plan will have to be added as well. Generally speaking, when Medicare approves and pays a hospital or doctor claim, the supplement will kick in and cover the deductibles (usually hospital) and coinsurances left (usually 20%) after A&B pay their share (generally 80%). How completely these costs are covered depends on the plan you buy. These policies require a monthly premium that will generally go up each year. One thing that makes these plans popular is, unlike Medicare Advantage, a primary care physician is not required and referrals are unnecessary. They can be used anywhere is the USA where Medicare is accepted. This freedom does have an important price: The only time these plans are guaranteed issue (with very few exceptions) is when you first become eligible for Medicare Part A and elect Part B. After that, health underwriting is required. Given that, the best and safest time to elect a Medicare supplement is when you first become eligible for Medicare. So, if you can afford a monthly premium and want maximum control over your healthcare options, a Medicare supplement plan may fit the bill!
Ok, I understand better! I see commercials literally every few minutes of every day about many different plans. So, which plan is best for me?
Ah, there’s the rub isn’t it! Thankfully, it is not a hard question to answer but, alas, that is a topic for another day!
If you would like “white glove” concierge treatment in navigating your Medicare options, give us a call at 281-451-0194. The service is free.
Justin K. White CLU®