Ask The Medicare Specialist

Welcome to Part 6 of the series, "New to Medicare," designed to help those who will be going on Medicare Parts A and/or B for the first time soon. I want to remind readers that this series and all columns are written to provide general knowledge and education. They are not intended to be a substitute for a one-on-one consultation with one of The Health Insurance Store's experienced and licensed agents.

Question: What are the most important considerations when choosing a Supplement as well as a Part D prescription plan, and what plans and companies are the best?

Answer: According to the Centers for Medicare and Medicaid (CMS), "All Medigap (Supplement) policies must follow federal and state laws designed to protect you, and policies must be clearly identified as Medicare Supplement Insurance. Each standardized Medigap policy must offer the same basic benefits, no matter which insurance company sells it. Cost is usually the only difference between Medigap policies with the same letter sold by different insurance companies." That last sentence is actually printed in bold in the official publication titled "Choosing a Medigap Policy: A Guide to Health Insurance for People with Medicare," for good reason; It's the most important piece of information in the 52-page document.

Let me start by explaining there are only 9 Supplement plans to choose from. They are labeled with letters A, B, D, G, K, L, M, N, and high deductible G.

The bottom line is the name and logo of Supplement company means nothing! Every Supplement plan of the same letter reimburses providers the same amount, covers the same medical services, and grants access to the same doctors and hospitals nationwide. You don't get any extra benefits by paying more premium for the same letter plan from one company to another!

Doctors and hospitals don't even bill Supplement companies. They only bill Medicare, who then coordinates with the Supplement company to make sure the provider gets paid in full. The insurer also has no say in what's covered. That's Medicare's determination alone, which means no prior authorizations for medical services are necessary and doctors call the shots without any interference. When Medicare pays, the Supplement company must pay, no questions asked. When we have clients who prefer a Supplement to an Advantage Plan, this is almost always the number one reason.

There are close to 20 companies offering Supplements in Westen PA and I estimate approximately 50 or more nationwide. Currently we send 100% of our Supplement business to just a handful. The "best companies," are those whose premiums are either the lowest, or close to the lowest at the inception of the policy, and as or more importantly, what their history of rate increases has been as well as the outlook for future rates. Upon initially enrolling in Part B, which is virtually the only time acceptance into any company and Supplement letter plan is guaranteed, it's extremely important to choose one that provides the best chance of keeping rates reasonable over a long period of time because you can't switch to another company without having your current and previous health taken into consideration. What we do at The Health Insurance Store is ensure our clients make a wise first choice and then follow up with them if rates get the point they're not competitive with other companies.

We recommend that our clients enroll in either Plan G or N because they don't under or over-insure. However, when the very small differences between the two letter plans are explained correctly, most people choose N because premiums remain lower long term, and the savings can be very significant over time.

Regarding Part D, there really is no plan or company that's best for everyone. Which will be most cost effective is 100% determined by what medications one is taking at the time they go on Medicare.

Paying $500 to $1,000 more per year in premiums for Part D "just in case" of what one might be prescribed later in the year, or a plan that doesn't have a deductible are common mistakes. This is especially true now that there's a $2,000 out-of-pocket limit on what someone on Part D can spend on covered drugs. All Part D companies cover hundreds and usually over a thousand drugs. They are also regulated to include at least two for every "medication category" or as I like to say, that treat practically every diagnosis known to man. Those who get prescribed a drug that isn't on their plan's list, known as a formulary, must immediately be supplied what is known as an "emergency transitional 30-day supply." This gives people time to get with their doctor to prescribe an alternative or to file for an "exception to the formulary." There are other protections as well although they can often be confusing. The staff at The Health Insurance Store are always available to help our clients choose the right plan and assist them in navigating through any future issues or confusion that may arise.

If you have any questions regarding the "New to Medicare" series or would like to set up an appointment for a no cost consultation, please call one of our offices or reach out to me personally at [email protected].