Teach me about Medicare supplement policies

The wife is headed toward the big 65.
What do I need to know about Medicare supplement policies?

I am a licensed insurance agent. Pm me and I will be happy to talk in detail (not to sell you anything, I’m not licensed in your state).

The big thing to know is that you have two broad choices with several sub choices. The biggest broad choice is medigap vs Medicare advantage. Medigap is standardized and every policy offered by every company must have identical benefits by law. It is typically a bit more expensive than an advantage plan in terms of monthly premium but a good plan (I like plans F and G best) offers what is quite possibly the best medical coverage available to anyone in the US. Shop around and go with the company with the best rates then continue to shop to make sure your rates stay good.

Medicare advantage offers lower premiums but less security and usually significantly lower quality coverage. These plans are not standardized so every company’s plans will be different and they can change them on you every year. Typically the monthly premium goes up considerably after the first few years. Many but not all of them are essentially hmos. They also frequently come bundled with a prescription drug plan which can be a benefit, but takes away your ability to shop your rx plan annually as your drug needs and the laws change.

The other important thing to know is that for 6 months after you enroll in a supplement you can change your plan as often as you want with no medical questions being asked. After that you can (and likely will) be medically underwritten by the insurance company effectively cutting you off from some coverage if you have any real health problems.

Let me know if any of that doesn’t make sense or if you have other questions.

Two more considerations…

A few companies still offer a level premium plan. This is a bit like whole life insurance… you pay higher premiums now but your rate does not increase with age. Depending upon her family’s history, she might come out well ahead over the years by choosing one of these plans. The government’s website offers a search tool that lets you find which plans are available for sale in your area.

Obamacare does not prohibit insurance companies from medically underwriting a Medicare Supplement policy. But as a person turns 65 they get an opportunity to choose any Medicare Supplement plan with no medical underwriting whatsoever. Be sure she does not miss her chance!

One of the things my clients most frequently don’t understand when I first go see them is how aca (Obamacare) effects them. It doesn’t. Medicare is its own thing with its own rules. It is totally different (and in many ways better) than ACA plans.

I will relate an anecdote about Medicare advantage. My neighbor has it. He got it because it was a few bucks cheaper total cost for paying for his usual health expenses. A couple weeks ago he had a heart attack. He need an MRI (or other advanced tests) to determine whether he needed open heart surgery or just a stent. The Medicare Advantage insurer delayed approval for the tests for over a week (and then only approved it after his daughter threatened lawsuits…). [The Medicare insurer had told her they had two weeks to decide.]

If my neighbor had had a regular Medicare supplement they would have just gone ahead and run the tests without these delays.

I researched this quite a bit just a year ago and went with a MediGap F policy. Primarily because it has worked so well for my parents. I did choose the high deductible policy (about $2000) to save on premiums. If I start using medical services, In my state I can switch to a zero deductible during the annual open enrollment.

I did this within 6 month of my 65th so no underwriting and chance of refusal. This is VERY important.

Even though I could get a $0 premium Advantage policy, I simply don’t care for the idea that the private companies that offer them get paid more by the government to administer them, get to make medical decisions for me - AND make a profit off the whole thing…

Being able to switch between plan f’s is a pretty good deal. You can do it without underwriting? You can’t here in the state where I work.

I typically counsel my clients to go with plan G, though most end up taking F anyway. My reasoning is that the price difference between plan F and plan G is usually more than the cost of the part b deductible, and will likely continue to be more than the cost of the part b deductible for the foreseeable future. Also rates for plan F typically increase at a faster rate than plan G since it is a more popular plan.

If we assume person X CANNOT switch between high-deduct F and 0 deduct (I take it this is a function of State):

How far “Wrong” can a person go by simply holding out wallet and saying “0 deduct F, please, ignore price”?

I have multiple conditions which can run into big money - I went with most coverage I could get.

One specific issue: Chronic Kidney Disease (aka Renal Failure): It is my understanding that, regardless of coverage (or even no coverage), that, at 65 any and all treatment (dialysis, transplant, whatever is “medically necessary”) will be covered by Medicare - is this true?

Yes. For you I would go with plan F and a lot of research into what company to select because that will likely be the last insurance company you will work with. Talk to a couple of agents and look at both brokers and companies that don’t sell via brokerage.

Please make sure that your doctor and other healthcare providers are approved for whatever Medicare Supplement Policy you choose - unless, of course, you’re not attached to them.

I have (usually temporarily) lost patients when they’ve signed on for a Medicare supplement plan. More often than not, someone has come to do a talk at their senior building, and they sign what they’re told are papers requesting information. They’re switched without realizing they were signing papers to sign up. Because my company is only approved for traditional Medicare, this means I have to stop seeing them, as does their physical therapist, and sometimes their home physician. It’s a big problem for some of them. Generally they can switch back if we find out the issue promptly, but of course that’s entirely up to them. If they don’t want to switch back and would rather find a new doctor and home health company, that’s cool with me, too. I can always find other patients. But it can be terribly disruptive for the patients.

Anyway - approved for traditional Medicare does not necessarily mean your provider is also an approved provider for these supplement plans. Best to check, if that’s important to you.

To make sure there is no confusion, the types of plans you are referring to in the quoted posts are all Medicare Advantage plans, not actually supplements. Traditional Medicare plans, also known as medigap plans
, work directly with Medicare and will be accepted anywhere Medicare is accepted.

The easy way to tell if you are talking to someone about medigap or Medicare advantage is if the plan has a letter name (plan f, plan g, plan N, etc) it is a supplement. If it has a name (freedom blue, golden plus, etc) it’s an advantage plan.

Thank you! I admit, I’m totally confused by the whole shebang. There’s one (or maybe more?) plan here in Illinois referred to as “Healthspring”, which some patients have and they pay us, and others have and they won’t. I’m lost. I’m a nurse, not an insurance agent! I hate it when people ask me about their Medicare and I’m all derp about it. Ask me how to control your blood sugar or take care of your wound, man. I don’t know nothin’ 'bout insurance!

I know we can take “traditional Medicare”. The good ol’ red, white and blue card. Anything else, I gotta run by the billing guy at the office, and it seems to be a crapshoot.

Ask your doctor(s) (actually, ask the office manager) what company they like the best (this means what company pays most and fastest). Unless that one is wildly expensive, get it. There is a lot to be said for keeping your doctor happy. (IANAD)

From what I understand, more people take the F plans than all other plans combined.

Don’t go the Medicare Advantage route unless you know people enrolled in the plan, they have used it and are happy with it. Even then, I would think twice.

As your wife gets closer to age 65, she will likely receive a crapload of mailings, many of which look official (but aren’t). They say they want to educate you but just want to sell you. Put those mailings directly into recycling and save yourself a lot of time.
There is also the issue of a drug plan. For this I just went to the Social Security site. You tell them what drugs you take, what your pharmacy is and they tell you what your best options are.

Is that deadline affected if you have other regular coverage? e.g. if you’re still working with benefits, or your spouse is?

It has to do with when you apply for medicare part b. Can’t have that if you have other coverage too.

Edit: as long as you are covered by a working spouse or your own employer coverage you don’t have to apply for part B (though it is likely that you would be better off if you did) but if you no longer have active employer coverage (retirement coverage doesn’t count) you pay a penalty for not signing up.

What kind of costs are people paying for these plans?

My employer has money put aside for me that can only be use to cover my costs (and that of my spouse) for such coverage. I followed the link they provided and for me, assuming I’m 65 right now (I’m not), I could get a high deductible medigap program for between 40 and 50 dollars a month.

For two CareFirst non high-deductible plans, I could pay 77 or 118 a month depending on whether I elected coverage for the Plan B deductible and Plan B excess (“This is the difference between a doctors or other health care providers actual charge (which may be limited by Medicare or the state) and the Medicare-approved payment amount.”).

Then separate drug coverage would range from 12 to 46 dollars a month depending on copay and “doughnut hole” coverage. Total cost then (for medigap and drug coverage) would be anywhere from 52 to 164 a month.

The Medicare Advantage plans range from free (but no drug coverage) with cheap doctor visits, to 81.00 a month for a Humana PPO. Looks like only Aetna and Humana offer these, at least in my area.

Stay away from Cigna anything. They have a history of nonpayment, refusing needed tests and treatments, of requests for treatment/tests being “lost”…

Didn’t see this before.

How much you pay will vary by state and by company. Here in PA, $160 a month for regular plan F at age 65 is average. It can be found cheaper (I sell a version that is $120 a month depending on what county you live in) and it can be more expensive.

Plan F is the most expensive but also offers the best coverage.

The other thing you want to look at is how the company you are buying from sets their rates. There are three methods of pricing that the companies can use with traditional Medigap (plans with letter names, A, B, C, D, F, G, K, L, M or N). The first is attained age. This is most common. With attained age you premium is based on how old you are today. These plans are usually the least expensive at age 65, but go up each year (some go up as often as once a quarter). Depending on how much lower the plan is than the competition you could end up paying too much for your coverage in a few years time.

The next is the community rated plan. This means that the rates are based on your community (usually a zip code) without regard to your specific age. These plans are usually a little more expensive at age 65 than attained age plans, but while the rates do fluctuate (both up and down), they do so more slowly. With community rated plans the more popular the plan the more likely it is to have a rate change. So Plan F, the most popular plan, will go up in price more steadily than Plan G or C (less popular plans).

The last pricing method is issue age rated. With this method you usually pay a fair bit more at age 65 than you would with either of the other two, but the rate stays the same for the rest of your life. With these plans you will usually be paying a lot less than your friends with similar coverage by the time you get into your 70s.

With Advantage plans things are more complicated as they have the flexibility to make broader changes to the plan every year and usually change your rates based on more than one factor. Advantage plans are customized state by state and to a lesser extent county by county.

Also, while I have said it before it’s worth repeating. After you have had a supplement plan for 6 months (1 year for Medicare Advantage) you no longer have the guarantee of being granted coverage by a different insurance company. Look at the whole picture and do NOT assume that you will stay healthy for the rest of your life. You probably won’t. Make sure you can live with the financial realities of a worst case scenario with the plan you select.

It does indeed vary by state!!

I plugged in my in-laws’ zip code just for giggles. Came up with a different subset of plans (no surprise), with VASTLY different costs.

Medigap examples ranged from high deductible plan F (at 127.87 a month), the next cheapest was a plan B (217 a month), and a few more plan C and plan F ranging up to 339 a month. Note that this is without the drug portion. Info on an AARP / United Healthcare plan wasn’t available but supposedly there is a plan available (well, I know there is, my in-laws have that).

Drug coverage costs are from 12 to 50 dollars a month beyond that.

All of the Medicare Advantage programs are free, but several don’t include drug coverage.

Of note: the in-laws live in Florida, in a zip code with a very large number of retirees. We’re in the greater DC metropolitan area, and the ranges are 41 to 168 a month (including one plan G attained-age related - but it’s Cigna).

I plugged in a Pennsylvania ZIP code and got medigap plans from 63 to 196 a month. More choices overall, too.

So, so much for claiming the in-laws’ address as ours for retirement purposes!! (not as skeevy as it sounds, we actually own the place).

What happens if you move to another area? Can you actually be turned down for coverage if that happens? Or do you remain under your original state’s plan (and hope it covers doctors in the new area)? Can you switch between Medigap and Medicare Advantage?

What happens if you move to another area will vary company to company, but losing coverage due to moving is one of the triggers to put you into a guarantee issue period. IF you lose coverage due to a move OR if the company that covers you currently stops providing coverage in your area, you are guaranteed the right to sign up for a new MediGap or Medicare Advantage plan of your choice for 12 months with no medical questions asked. Whoever you chose must take you as long as you sign up within that 12 month window.

You can switch between Medigap and MA, but only once a year. From October to December you can leave a Medigap plan and go to an MA (or from one MA to another), and from January to March you can leave an MA and go to a Medigap plan (though you can do the paperwork as early as October 15). Also, you can leave the MA plan at anytime within your first 12 months on the plan if you have never been in an Advantage plan before. You can switch Medigap to Medigap whenever you want though.