Last week I received from my Medicare adviser a simple overview of what the next round of Medicare will look like. I thought I'd share it with those of you who are at or near Medicare age. This info is for supplements, insurance that covers what Medicare doesn't.
NOTE: These are NOT Medicare Advantage programs. In those, Medicare just gives an approved company a lump sum and then bows out. For better or worse you're then their problem. Many of the Advantage plans seem to cover more, but there is always small print. They are basically HMO's/PPO's, meaning you have to use THEIR doctors and hospitals. They may also say they include prescription drugs, but not ALL drugs are on their included list (their "formulary"). Be careful!
MEDICARE SUPPLEMENTS
Medicare has
deductibles and co-pays ... lots of them. These deductibles and co-pays
change every year, but this is what they look like in 2017:
PART A DEDUCTIBLES AND CO-PAYS (the hospitals)
Day one deductible: $1,316
Days 2-59 co-pays: $0 per day
Days 60-89 co-pays: $329 per day
Days 90-150 co-pays: $658 per day
Skilled Nursing Facility co-pays: $164.50 per day (Maximum 100 days)
PART B DEDUCTIBLES AND CO-PAYS (the doctors)
Annual deductible: $183
Co-pays after the deductible is met: 20% co-pay of everything WITHOUT LIMIT.
Whoa!
You don't have to be a
Mensa member to see that an unexpected illness could cost you a ton of
money if you had original Medicare and nothing else.
THIS IS WHERE SUPPLEMENTS COME IN
Medicare supplements
(Medigap plans) are private insurance plans, regulated by Medicare, that
pay all or part of the aforementioned deductibles and co-pays.
There are eleven different kinds of supplements, identified by letters A to N, each one covering different pieces of those deductibles and co-pays. The most popular plans are Plan F and Plan G since they cover the most.
A Plan F covers ALL of
Medicare's deductibles and co-pays. Plan G covers all of them except the
Part B annual deductible of $183. Since Plan G has a premium that's
$400 per year less than Plan F (on average) it's always the better
value.
Here's a little known
fact: Because supplements are federally regulated, those with the same
letter are identical except for price! They have to cover the exact same
things.
WHAT DO THEY COST?
Premiums are based on
your age and your zip code. In Frisco, TX, there are at least 26
different companies offering Plan F supplements. The premiums for a 65
year old female range from $120 per month to $369 per month - for the
exact same thing!
The least expensive
plan is not usually the best value because those are the plans that have
the largest renewal increases. If your plan costs $120 per month in
year one but jumps to $180 per month in year two, it's no longer a good
deal. And if your health is bad, or your medications give the insurance
companies a scare, you'll be stuck with that plan and its
ever-increasing premiums.
MY RECOMMENDATION
There are some supplement companies that have proven to be reasonably priced and have relatively low annual premium increases.
They are, in
alphabetical order: AARP, Aetna and Blue Cross. As those of you who have
been to my office know, Aetna has always been the plan that starts out
the least expensive of the three and stays that way over the years, so
that's usually what I recommend. In addition, if a husband and wife both
go on the plan they get a 12% discount.
Once you have a quality supplement, there should be no need to change. They will all have some rate increases each year on your anniversary date, but those increases should be manageable.
CAN YOU CHANGE SUPPLEMENTS?
If you have a
supplement that is NOT priced right, can you do anything about it?
Maybe. You can apply for a different supplement any time during the
year, but the plan you're applying for will ask you three pages of
health questions, review your medications and talk to your doctors. If
they don't like what they see, they will decline you and you'll have to
stay where you are.
~~~~~~~~~~~~~~~~~~~
Hope this helps.
Regards,
S
Thanks for research into good info for those who need it. I dread age 65 as it requires a test of knowledge I could not pass now. One would think it would be an automatic and simple system.
ReplyDeleteYeah, right. Haha! The key is to find out if your current doctor(s) will continue to see you once you're covered by Medicare. If you're already a patient they usually will, but if you're out shopping for a new doctor, you might be told "no" a lot. It has worked very well for me, and I have no complaints. When your time comes to sign up, see if there is a Medicare adviser in your area who can guide you.
DeleteI just skimmed over that going lalala... We have a few more years in our house before we need to worry about it, and I assume that it will change between now & then. At least that's the excuse I use for not doing my homework ahead of time!
ReplyDeleteOne of my friends (on Medicare) just was diagnosed with breast cancer. Her doctor suggested that she switch to a different supplemental plan that covered more of what she needs now. Of course, with her diagnosis, the different plan wouldn't take her.
ReplyDeleteI read through your post...probably a little more careful than The Bug. I'm a few years (short years) away from all this. I'll be stopping by the Lowandslow office for advice then, I believe. Dallas is worth a visit, yes?
Betina...I suspect your friend has a Medicare Advantage plan, not a Medicare supplement plan. Changing from one SUPPLEMENT to another won't make any difference because they are all exactly the same by law. In an Advantage plan there are differences as to what is covered, over a certain baseline level. Maybe she was trying to change from a supplement to a more lavish Advantage plan, and they are free to pick and choose....and deny. Seriously, it's a complicated mess, and is why I STRONGLY recommend you get a Medicare adviser to help you. Yes, he gets a commission from whichever plan you pick, but my understanding is the commissions are standardized, so there is no pressure to push you towards any particular plan. His profit comes from getting renewals year after year, from an increasing base as he builds his business. Mine gave me some solid info without any pressure.
DeleteBy all means, come visit! But you don't have to wait until you're 65. :)
I stand corrected: If your friend had one of the lesser, cheaper supplements she could be lacking some coverage. If she had Part F or Part G coverage, that's the best supplement they have. I have the Part G and my only expense is my $183 per YEAR co-pay.
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