Ask The Medicare Specialist

Question from Nancy: I'm struggling to decide if I should move from my Supplement to an Advantage Plan which many of my friends have. My Supplement premium is going up again, $40 in July, and will be over $250 per month. I started at about half that cost 7 years ago. But the coverage has been so good I hate to drop it. However, it's getting expensive, and I just don't know what to do. What advice do you have for people in my position?

Answer: The best advice I can give is to make an appointment with us to discuss it before making such an important and impactful decision. It can't be taken lightly and shouldn't be influenced by what types of plans friends or family have. I'm going to give some general information in this column, but there's no substitute for a one-on-one conversation with myself or another of our agents. Nancy may have unique circumstances or health concerns. Her income is obviously a factor and there are many others that must be considered as well.

With several Supplement companies recently announcing unprecedented premium increases, more people than ever are going to consider moving to an Advantage Plan. Making that choice will make sense for a lot of people, but not everyone. You can be assured that the licensed and experienced agents at The Health Insurance Store will be extremely careful and diligent in making sure those in the same situation as Nancy have a full understanding of the many differences between Supplements and Advantage Plans as well as the pros and cons. We also provide support when making the transition to an HMO or PPO and a strategy to prepare for possible future out of pocket medical costs.

Let's start with the benefits of moving from a Supplement to an Advantage Plan: The savings can be huge. Almost all our Advantage Plan clients have premiums that are under $30/month. So, in Nancy's case, she would save around $3,000 a year. That can be a big financial relief for those on a fixed income, especially considering today's high cost of living.

In addition, if Nancy chooses one of the Advantage Plans we recommend, she will also pick up valuable ancillary benefits, "extras," that Original Medicare and Supplements don't provide. Per regulation, I'm not allowed to list specifically what they are. But what I can say is they're goods and services almost everyone utilizes. I estimate that most people on Advantage Plans receive about $1,000 a year, on average, in real dollar value of ancillary benefits. Those who maximize them can literally use as much as $4,000 worth of "extras." The combination of premium savings and ancillary benefits is what has driven the growth of Advantage Plans in the last five years, with 55% of those on Medicare now enrolled in an HMO or PPO.

The following are some concerns that need to be taken into account before changing from a Supplement to an Advantage Plan: Those who need chemo, other infusion or injection therapy which are becoming more common, radiation, a lengthy Skilled Nursing stay, or multiple hospitalizations can be billed up to what is known as the plan's annual Maximum Out of Pocket (MOOP) which range from $5,000 to over $8,000. The MOOP resets every January, so someone going through chemotherapy that stretched over portions of two calendar years would likely meet their MOOP twice in a matter of a few months.

Unlike Supplements, benefits with Advantage Plans can change year to year. The extras may be reduced or eliminated, and/or out-of-pocket costs can increase. I'm a bit concerned that in the near future, inpatient hospitalization co-pays, which are currently only a couple to a few hundred dollars on the most popular plans in Pennsylvania, may increase to as much as $1,200 to $2,000 for stays of five days or longer. This range is already the norm in almost all other states.

Often the biggest adjustment for those who leave Supplements for Advantage Plans is how care for many services must be "prior authorized" before they can be received. While on her Supplement, Nancy can get an MRI, CT scan, outpatient surgery, and virtually any test or procedure immediately upon a doctor's order. If she changes to an HMO or PPO she will need to wait until the insurance company gives those a "green light." This usually takes about two weeks and at times, there can be further delays if the insurance company makes physical or injection therapy a requirement prior to an MRI, CT scan, or surgery being performed.

The move to an Advantage Plan can be permanent. Once enrolled, to move back to a Supplement, one must be approved, and Supplement companies can deny applications based on current or previous health issues. Everyone loves Advantage Plans when they're relatively healthy, saving thousands in premiums and getting lots of ancillary benefits. But when people get sick, must wait or fight with insurance companies to get certain care, or receive large bills, frustration and anxiety can set in. At that point, unfortunately, going back to a Supplement is usually impossible.

Selfish and unscrupulous agents and agencies are extremely happy premiums on Supplements are going up so much. They're licking their lips with the prospect of enrolling as many as people as possible in Advantage Plans and looking forward to the commission checks. Most don't care if it's the right move and won't disclose both the pros and cons of Advantage Plans, focusing only on what we call the "sizzle." The only way to make sure you, your friends, or family make the best decision is to reach out to The Health Insurance Store for a consultation with a caring member of our team who will take into account each individual's personal circumstances when making a recommendation.

Although most people can't change from a Supplement to an Advantage Plan until the Annual Enrollment Period this coming October, we encourage people considering it to set up an appointment prior. This provides proper time to take in all the information we provide, ask questions, and think things over. Our services are always no cost, and meetings can take place in the office, over the phone, or via the internet in a Zoom style meeting. Call us with questions or to schedule. Feel free to email me personally as well. [email protected].