I’m interested in any thoughts on Medicare Advantage plans vs. straight Medicare Supplement plans. Currently in the sign up process.
Here is my simple take on Medicare Advantage vs Traditional Medicare with Supplemental plans and what I and my wife have done with our health insurance:
Medicare Part A: Basically Covers hospital care, skilled care, hospice and home care.
Medicare Part B: Pays for Doctors and ancillary care / outpatient care
Medicare Part D: Covers prescription costs to a certain extent
Medicare Part C: Medicare Advantage Plans - Insurers assume responsibility for providing reimbursement for Medicare expenses in exchange for a fixed payment from the government on a per member basis. For this payment the insurers assumes financial liability and risk. They “manage” the care and attempt to optimize health by offering services and programs that are preventative in nature. For instance they incentivize preventative care such as immunizations (flu shots, pneumonia shots, shingles vaccines, RSV shots), health club and exercise programs, social interactions etc. They profit if the members consume less dollars of health care than the government calculated and paid for the insurance companies to assume that risk.
Costs: Medicare Part A: No cost to the member
Medicare Part B: $174.70 (2024)
Medicare Part D: Variable depending on insurer and benefit. Avg. $48
There is a “IRMAA” (Income-related annual adjustment) for singles and couples that increases the above Part B and D premiums by up to a maximum of $594 for Part B and can add up to $81.00 to the baseline Part D plan.
Part C: Medicare Advantage: Many plans are at zero premiums but members must maintain Part B coverage so they still pay the Part B and any IRMAA as well as a Part D IRMAA if applicable based on income. They do not pay an extra premium (for most plans) for the Advantage plan.
Medicare Supplement Insurance: Medicare Part B pays 80% of “allowed charges” with Medicare determining the “allowed charge.” This leaves the patient responsible for the 20%, and if the provider does not accept assignment up to an additional amount as allowed by medicare. To cover this amount many purchase a supplement plan from insurance companies. Many different plans are available and provides different levels of coverage and are at variable prices. The most popular plan right now is called Plan G. Medicare dictates that there are basic coverages that each plan has to offer regardless of which Insurance company offers the product so one Plan G has to cover the basics as determined by Medicare but they can offer additional coverages above the minimum so there is variability in the coverages depending on which company you choose. The prices for these plans are set by the insurers and are generally competitive across the spectrum of offering companies. There is an annual Part B deductible that has to be met before medicare Part B kicks in ($240 in 2024).
Part A Medicare for hospital charges also has an annual deductible. For 2024 this amounts to $1632 for inpatient hospital costs. Should the hospital duration extent to days 61-90 there is a daily deductible of $408. If Skilled Nursing Care is needed beyond 20-100 days post hospital care the deductible for that is $204.00/day.
The Medicare Supplements may cover these deductible costs depending on which Supplement plan is purchased. Plan G for instance does cover the deductibles except the Plan B $240 deductible.
Plan C Medicare Advantage programs have variable benefits depending on the company and plans. They have HMO plans that are more “managed” and somewhat restrictive as to providers and pre-authorizations and PPO plans which allow members to seek care from a wider range of providers (although at a slightly higher co-pay amount) and less restrictive pre-authorization requirements.
Most Medicare Advantage programs have some coverage for things like eye care, exams, glasses, etc.; hearing aid coverage; dental coverages; health club memberships (silver-sneakers). Some provide a supplemental benefits to purchase over-the-counter health products (vitamins, toothpaste, mineral supplements, women’s health care products, and others); and incentivize by providing small payments to members who meet criteria for improving their health like exercising, getting immunizations, doing annual health assessments. Most Medicare Advantage plans offer better coverage for foreign travel emergent care needs (although travel insurance should still be highly considered)
There is a deductible (generally for the first few days of hospitalization for in-patient care and small co-pays for out-patient care {less for HMO than PPO plans}).
Given all the above, I think the bottom line depends on your individual needs and desires, but Medicare Advantage appears better suited for those wanting to save money over the costs of Medicare supplement plans, and those who live in an area where most providers are enrolled as providers (for HMO plans) or are accepting Medicare patients (PPO plans) and where the hospitals are participating (most are.)
Those who want some eyeglass care, hearing aid care, gym memberships etc benefit from Advantage plans.
Traditional medicare is likely preferred for those who anticipate considerable services with multiple hospitalizations as Medicare Advantage programs can have a high out-of-pocket limit especially if utilizing “out-of-network” providers.
My wife and I chose a Medicare Advantage Plan as Supplemental Medigap plans (G) and plan D plans) were costing us over $5000/yr. and do not anticipate multiple prolonged care needs and live in a region where most providers are either in-network or accept Medicare so we can use our PPO plan and pay a slight additional co-pay ($50 for specialist vs $35 in-network specialist). We also travel internationally every couple years and find emergent care coverage of the Advantage programs to be preferable.
Consult an independent health insurance consultant and do not rely on Joe Namath of JJ Walker to assist you in making the decision regarding you Medicare or Medicare Advantage plan.
BKMK
>Consult an independent health insurance consultant and do not rely on Joe Namath of JJ Walker to assist you in making the decision regarding you Medicare or Medicare Advantage plan.
Thanks for the morning’s best LOL! And the overall post.
Medicare is a level of complexity that you WILL NOT UNDERSTAND.
Find a certified agent. They deal with the details every single day. They will know things you will never know.
There is zero reason to believe Advantage is a scam. About 40% of new 65 yr olds choose Advantage plans and that number is growing. They have items of superiority. They have items of inferiority and a certified agent can lead you through all this.
As for what happens after you have the selection made, no plan scams you any more than any other plan. They all will try to scam you.
When Medicare was put into place, limiting it to 80% created the entire Medigap/Advantage industry and it’s absurd. It should have provided 100% coverage. If that meant payroll withdraw was higher, then so be it. Better that than this insanity we deal with now.
We LIKE out advantage program. After decades with only one use of insurance, it’s fantastic to get included dental, vision, annual exams, urgent care, health clubs, and more for no extra cost. Last year I got an iWatch (wearable fitness device) for $12.
I’ve never heard anyone support Supplement programs other than my brother whose retirement pays for it. If money’s no object and you anticipate bring sick because of poor lifestyle and dietary choices, then maybe they make economic and risk management sense. We would rather spend about $350/year each on nutritional supplements, eat very healthy food, and exercise regularly, with a no-cost advantage program.