Deena Flinchum
Many people confuse Medicare supplement or Medigap plans with Medicare Advantage (MA) plans. Medicare supplement plans complement Medicare A and B by paying for most goods and services that Medicare approves but doesn’t pay the full amount for.
Medicare Advantage plans are private health insurance plans that replace Medicare A and B and usually have a drug plan attached.
It is very important to know the difference between these two types of plans because selecting an MA plan over a Medicare supplement could affect your ability to purchase the latter at a later date.
If you are at least 65 and have Medicare A and B, you can purchase a Medicare Supplement anytime that an insurance company will sell you one. Unfortunately, after your initial six-month enrollment period when you meet both conditions, insurance companies are not required to sell you a supplement. If you have pre-existing health conditions, an insurance company will often not be willing to sell you a policy.
If you are under 65 and have Medicare as a result of disability, you will not be able to buy a supplement policy without paying around $9,000 or more annually.
The most common reason given for not buying a supplement when possible is that they are generally more expensive than MA plans. Although this may be true under ordinary conditions, a MA may prove more expensive if you develop serious health problems that require a great deal of medical attention.
Most MA premiums are less than supplement premiums but are accompanied by co-pays, coinsurance, and deductibles. A major selling point for MA plans is that they cap out-of-pocket costs, albeit at $4,900 to $10,000, depending upon the plan.
If you find yourself paying more than you like for a supplement and are in generally good health, you may want to consider downgrading your supplement rather than dropping it and going with an MA plan.
Plans G and N both have cheaper premiums than Plan F, which covers all out-of-pocket costs, and offer excellent coverage. A high deductible Plan F offers what might be considered a catastrophic coverage plan that could spare you financial ruin if you have a serious illness or accident but has higher initial out-of-pocket costs.
A high deductible Plan F has a low monthly premium, usually below $50, and a deductible that you must pay – $2,180 in 2016 – before the policy will pay its portion of your bills. After this deductible is met, the plan pays all remaining Medicare approved bills just as a regular Plan F does. Obviously a high deductible Plan F is not for everybody; but buying such a plan could be a very economical move compared to the high MA out-of-pocket caps, its premiums, and its network constrictions.
There are far more health care providers that accept assignment to Medicare than there are who are in network for most MA plans. If you are healthy enough to be sold a supplement, your best choice may be to buy one that is cheaper even if it doesn’t cover all of your out-of-pocket expenses rather than buying an MA or having just Medicare A and B without a supplement, a condition that could open you to uncapped out-of-pocket expenses that could ruin you financially.
Speaking of networks of providers, it is wise to contact a potential provider’s office directly to inquire about the provider’s in-network status if you have an MA plan. Not only could the provider be anticipating an exit from the network in the near future; but also the online databases of providers in MA plans can contain highly inaccurate data, ranging from listing providers in network when they are not to showing bad contact information.
Also the proper question to ask is, “Are you in network and accepting new patients?” Providers who will not accept new patients are as unavailable as those not in network.
If you need more information regarding what Medicare supplements cover, call the NRV Agency on Aging at 540-980-7720.
