Great news! Your Medicare card came in the mail. Your Medicare card however only covers you for 80% of your medical costs. And, I know what you are thinking, 80% isn’t good enough! And you are right, because the other 20%, if something really bad were to happen, could cost you huge dollars out-of-pocket.
But, not to worry, because you are now ready to sign up for a Medicare plan. Think of it this way: Your Medicare card is like a ticket into the movie theatre. Now it is time to pick the movie.
You are now at a fork of the road where you have two different ways you can go with Medicare: Original Medicare or Medicare Advantage.
Here you go one direction or the other. Just as when you arrive at a fork in the road in your car, you cannot go down both roads, although I am sure a few people have tried. With Medicare it is Original Medicare or Medicare Advantage: One or the other.
So which way to go???? We can help you, of course with the information it takes to make the right decision for you. We are experts and have helped 1,000’s of people with this sometimes difficult and confusing choice.
Medicare Advantage plans are based on the county you live in, with different counties in the same state often having very different Medicare Advantage plan choices. In more urban areas it is not uncommon to have 50 different plans to select from, with plans offered by 10 or more carriers. In rural counties it’s kind of like restaurant choices, and the pickings will be much slimmer. Not just that, but the benefits you get will often be much richer with Medicare Advantage plans in urban areas.
Medicare Advantage plans can be either HMOs or PPOs. PPOs give you more flexibility. With a PPO you can go out-of-network to see doctors or for other medical services. Note, that going out-of-network will typically be with a higher copayment cost. Some PPO plans will only charge a small extra amount to go out-of-network, whereas other plans could double your copayment cost if you leave their network. If this going out-of-network ability is important to you, then it is critical to also know how much extra each plan charges when you do leave network. PPOs also let you see specialists without a referral from a primary care doctor. For most people this is a very big deal. Note though, some HMO’s may also allow you to see specialists without a referral, called an Open-Access HMO.
With PPOs offering greater flexibility, you might wonder, why would anyone choose an HMO? After all, flexibility is a good thing, right? The selling point for HMOs is that they are able to reduce their doctor costs by having a controlled provider network which in turn allows HMOs to offer richer benefits such as smaller copayment amounts, and more money for extra benefits.
Most Medicare Advantage plans include prescription drug coverage, cover all your medical needs, and often include extra benefits, not even covered by Medicare, as well. Using a restaurant comparison, because Medicare Advantage plans package all your medical needs, prescription needs, and extra benefits, think of them like the Full Meal Deal.
For the same reason you might have an Amazon Prime membership. Free Shipping, Free Movies, Free Music. Well, you get the picture.
A Medicare Advantage plan is even better though, because where a Prime membership has a cost, Medicare Advantage plans are usually (but not always) premium free. With many plans, your only monthly cost is the Part B premium which you pay directly to Medicare through Social Security. You will have some co-payments such as for doctors, labs, and hospital, but they are usually very low, often a fraction of the copayment costs you might have experiences with Group Health or any other health insurance which you currently have.
Medicare Advantage plans also typically come with many extras that you don’t get with Original Medicare. Ask us about these extra benefits. A wide range of Medicare Advantage plans compete with each other to earn your affections. Medicare Advantage plans are like contestants on the Bachelor or the Bachelorette, with the winner getting you.
Where Medicare Advantage is the Full Meal deal, Original Medicare is more like ordering from a menu ala carte. With Original Medicare, Medicare covers 80% of your medical costs leaving you with the other 20% where you’re on your own. This is, however, not a problem because almost everyone who opts for Original Medicare will get a supplement to cover the other 20% Medicare itself doesn’t cover, often referred to as a Medigap supplement.
There are different letter supplements such as Plan A, Plan N and Plan L, but the usual supplement we recommend is Plan G because Plan G covers you the most completely. With a Plan G supplement your medical costs are covered 100% other than for an annual deductible set by Medicare which is $226 in 2023.
Supplements piggyback on Medicare so Medicare pays the entire medical cost and then they bill your Medigap supplement carrier for their 20%. Because of this, it doesn’t matter which carrier's supplement you have, every doctor who takes Medicare will take every supplement equally.
Whichever plan you pick, such as Plan G, and whichever carrier you select to provide your coverage, it is important to make the best choice out of the gate because you will not be able to change later without passing underwriting. For instance, you will not be able to pick a Plan N now and then down the road switch to a Plan G, if at that time you have any medical issues that won’t pass underwriting.
You can expect to pay between $100 and $400 for a Plan G supplement. In different states the cost will be significantly higher than in other states. Men also pay around 15% more than women do in most states (other than in California which doesn’t allow it). Women client tell me, “At last, something we pay less for than men do.”
Each carrier is free to charge what they want for a Plan G Medigap policy and as a result the charges from one carrier to another are vastly different for the same Plan G Medigap supplement. On top of the monthly cost for your Plan G supplement, you’ll also need to purchase a Part D Prescription Drug Plan seperately. Additionally, if you want dental and vision coverage, you’ll want to purchase a separate dental and vison plan.
But why would you go with Original Medicare when you are paying for your Plan G Medigap supplement and paying for a prescription drug plan, especially since your Medicare Advantage may not cost you anything each month, at all?
The reason is because Original Medicare (with a Plan G Medigap supplement) and a stand-alone drug plan, is less restrictive than Medicare Advantage is. A few such advantages of Original Medicare are: You don’t need to get pre-authorizations as you often do with Medicare Advantage plans; you can see any doctor that takes Medicare as well over 90% do; and, you can go anywhere in the country for any type of treatments. Note: You are covered for any emergency medical need with Medicare Advantage allowing you can to go to Urgent Care Centers or Hospitals without any additional copayments beyond what you would pay in your home location. There is more about this in the section on Travel.
With Original Medicare combined with a Plan G Medigap supplement, you also eliminate the copayments which you’ll have with a Medicare Advantage plan. This way you will have cost certainty. For instance, if you go to the hospital you need not worry about how much the hospital copayment will be.
I call “Guaranteed Issue” the two most important words in Medicare. Guaranteed Issue is something which everyone ought to at least take into consideration in making their Medicare choice.
Guaranteed Issue means you cannot be denied a Medigap supplement no matter what medical conditions you have. You get six months of Guaranteed Issue when you first join Medicare. After this six-month period ends, if you ever want to switch to Original Medicare in the future, you must pass a medical questionnaire. If you answer YES to any of the questions, then chances are you’ll be denied for a Medigap supplement. Because Medicare Advantage doesn’t have a medical questionnaire, and Medicare Advantage plans always must accept everyone, it could become your only Medicare option.
You only get Guaranteed Issue for a limited time of 6 months when you first join Medicare either because you are turning 65 or because you are leaving Group Health and signing up for Medicare Part B for the first time at any age.
You also get one other important privilege called Trial Rights which lets you try out a Medicare Advantage plan for up to 6 months (in some circumstances 12 months). With Trial Rights you’re able to switch to Original Medicare along with Guaranteed Issue for a Medigap supplement if you’re not happy with what you experience on the Medicare Advantage side. This makes your introduction to Medicare Advantage essentially risk free.
Plenty of my clients teeter back-and-forth between Original Medicare and Medicare Advantage. With good reason: There are pluses and minuses to each direction. Medicare Advantage usually offers cost savings and also covers important benefits which Original Medicare doesn’t, resulting in even more cost savings from these bonus benefits.
On the other hand, Original Medicare gives you greater freedom in your doctor and clinic choices.
So, COST SAVINGS or GREATER FREEDOM. It could boil down to which one you prioritize the most.
The bottom line is we will help you evaluate what is important to you in a plan, go over the pluses and minuses of both choices, and help you make your plan selection.
There is a reason why Baskin-Robbins offers 31 flavors of ice cream: because we all don’t pick vanilla. In a lot of counties, just like ice cream, you’ll have 31 (or more) HMOs and PPOs to choose from. Sometimes, you can even sample and switch, if you choose.
With several carriers competing for your business, there are numerous considerations that each of us will weigh a little differently. For starters, do you want an HMO which usually has lower copay costs but less flexibility? Or, a PPO with higher copays but which lets you see specialists without a referral and even allows you to go out of network at a higher copay cost?
The doctors that matter to you may be in one plan’s network but not others (We can check this for you.) Plans also formulate your prescription drugs differently so that with one plan you could save considerably on prescription costs over other plans. (We can check this for you, too).
Another important factor is “Star Ratings”. These are ratings out of 5 stars that are handed out each year by CMS (Medicare). They use several key factors, most importantly customer satisfaction. Just as you would rather stay in a 4.5 star hotel over a 2.5 star hotel if the cost was equal—so too, star ratings are important to consider.
The key question just about everyone has in selecting a plan is, “What’s it going to cost me in my out-of-pocket expenses? This brings us nicely too the subject of . . .
If you are ever playing scrabble and you happen to have M-O-O-P—then play it. If you get challenged on what it is tell your opponent it means, “Maximum-Out-Of-Pocket.
MOOP was designed to prevent people from being pushed into a bottomless medical copayment pit and is of special importance for those people who have medical conditions that could require multiple hospital stays.
Every Medicare Advantage plan has a different set of copayment amouns for each medical need you might have. That includes smaller ticket items such as doctor visits and lab services as well as a big ticket item that you really need to pay attention to: Your copayment amount for a hospital stay. Medicare Advantage plans will vary greatly in their copay amounts.
This then leads to a very important number: MOOP. Once you reach a plan’s MOOP all your medical needs for the remainder of the year will be covered 100% (it doesn’t however include prescription drug costs). Plans can vary in their MOOP amount greatly, for instance $2,000 on the low side to $7,000 on the higher side.
If you choose Original Medicare, it only covers 80% and the other 20% could be OUCH!! Not to worry, though. This is where a Medigap Supplement fits in.
Your supplement pays for the 20% which Medicare does not cover. There are several supplement plans to choose from A-B-D-G-K-L-M-N, with Plan F no longer usually available. Let’s look at the most-popular, Plan G.
The most important thing to know is that there are numerous companies that sell PLAN G and each one of their Plan G’s, when lined up to compare, look like our scrabble example below:
The thing you’ll notice is that they are IDENTICAL, because Medigap letter plans are designed by the government and every company that sells Medigap supplements must sell the exact same Plan G plan. This means that Plan G from any company always covers 100% of your medical needs without any copayments. There is always a $226 annual deductible with every Plan G, which is your only out-of-pocket cost.
Plans do differ in one important way: Companies are free to charge whatever they want for their plan. As a result, companies charge very differently for what amounts to the exact same plan. They also have different methods by which they can increase your premium cost each year. This is where we can help you choose the plan that will be the least expensive to you—overtime.
One big area of confusion with Medicare is that where Medicare Advantage plans usually include your prescription drug coverage—Original Medicare does not.
Make sure you are clear on this very common area of confusion about Medicare plans. It’ll be on the test!
Because Original Medicare doesn’t include coverage of your drugs you’ll need a Prescription Drug Plan for two reasons. Firstly, drugs can be very, very expensive so you will want to safeguard against the potential cost. Secondly, if you decide, “I don’t take any meds, I’ll wait until I do to sign up for a PDP,” the government is one step ahead of that thinking. They will hit you with a big penalty that’ll last for the rest of your Medicare days.
Prescription Drug Plans (PDP) are typically not costly, but because they vary greatly in their monthly cost and coverage, it’s an area where you definitely need to shop around. (We'll be pleased to help, of course!)
Another reason why it is vital to pick the right plan is because of another key word in Medicare . . .
Every pill looks like it ought to cost 10 cents and some pills do. But other prescriptions can cost thousands of dollars. Our common sense asks, “FOR A PILL??!!”
It doesn’t matter if you have a Medicare Advantage Plan (remember prescriptions are usually included!) or Original Medicare with a Prescription Drug Plan (PDP), your plan is going to divide your prescriptions into tiers, generally from Tier 1 to Tier 5, and much of the time require you to contribute a copayment.
Some plans also have an annual deductible, as well, that could be as high as $505. When a prescription drug plan has a deductible it often only applies to Tier 3 drugs and above. So if you’re just taking basic Tier 1 and Tier 2 meds—you may not have any deductible to pay.
Prescription drug coverage rules are ultra-confusing and help from an expert (such as we are) is critical. If you are just taking basic Tier 1 and 2 generic medications it may not be so important to know all the rules, but if you’re taking higher cost Tier 3 and above drugs the difference between selecting one plan or another could amount to $100’s, if not $1,000’s of dollars each year. Worse, prescriptions you take could be covered by some plans, and not covered at all by others.
If you’re taking higher tiered prescriptions, you’ll also need to know about the Doughnut Hole (after your drug costs reach $4,660 a year) and about Catastrophic coverage (which kicks in once your drug costs hit $7,400). You also may need to know about applying for an Exception, if your particular prescription isn’t covered by any plan. All in all, it practically takes a Master’s Degree in Medicare to understand prescription drug coverage. If you want to formulate your drugs yourself, we have a website shown below, as an easy-to-use site for you to formulary your drugs on your own.
We would be happy to offer our expertise and to formulate your prescription drugs for you.
One other key matter to know about is Part B medications. A Part B drug is any drug that is given in a hospital, injection center or in a doctor’s office. Chemotherapy drugs are an example. These drugs typically require a 20% copay under a Medicare Advantage plan until you reach your MOOP. Under Original Medicare, with a Medigap supplement, Part B drugs may be covered 100%.
The statistics tell us that those of us who are over 65 take an average of 4.5 trips a year. The fact is: we have grandkids, bucket lists, and time on our hands.
The good news is that any Medicare plan covers both emergency (hospital) and urgent care centers wherever you go in the USA, with the same copayment as you have at home. International travel varies from plan to plan, and if this is something you’re going to do, you should consider international travel coverage rules of each plan prior to picking a Medicare plan.
The services of a healthcare agent are FREE.
The reason why the service of an agent (such as we are) is free is because we are paid by the carriers when you sign-up for a plan through us.
The cost of your plan is also identical with or without using an agent. My role, and the role of my team, is providing a service both to educate you and to help you pick the best Medicare plan choice to cover your needs at the least cost. I do hope you’ll take advantage.
There are two types of agents: Captive, who work for one carrier and can only sell that one carrier’s plans. And, Independent Agents (such as we are) who are able to select the “Best Plan for You” from a full range of carriers. Naturally, an independent agent will give you far more Medicare choices than a captive agent can.
We are also “Medicare Only Specialists”. Medicare is very complex. Because we focus exclusively on Medicare, it enables us to serve your needs that much better.
WE CAN PROVIDE FREE FULL SERVICE HELP OR HELP YOU SELF-ENROLL
We find that the world of Medicare is divided into two groups of people. Those who, when driving, like to get to a destination where they have never been before, entirely on their own. And those people who would rather have some help, or even be chauffeured.
Consider us your GPS to get you where you need to do on your own. Or, your chauffeur if you want even more hands-on help:
If you prefer to get to where you want to go on your own: HAVE WE GOT A WEBSITE FOR YOU!
Click to View Plans and Self Enroll
If, in doing Medicare enrollment on your own you have a question, want some advice, or a concern comes up: Please get a hold of us. We are here to help!