P.A. asked a good question yesterday:
I’m 60 and not yet investigating, so here’s my Q: does MedAd ‘require’ MediGap insurance the way trad Medicare does? That would be another layer of complication.
One of the big advantages Medicare Advantage has over traditional Medicare is that it does provide a catastrophic cap on financial exposure.
Traditional fee for service Medicare Part has no out of pocket limit. Beneficiaries can buy that protection with a MediGap supplemental policy. There are roughly a dozen standardized supplemental designs at various premium points. Each plan design has a different coverage matrix for the deductible, co-pays and coinsurance as well as a maximum allowed out pocket limit.
Medicare Advantage plans may also wrap in Medicare Part D drug benefits into the same plan. There are some nifty incentive and substitution effects at the plan management level for health economists to geek out about but the primary point of interest is that a comprehensive Medicare Advantage plan reduces the number of decisions that need to be made and pieces of paper that need to be tracked. People who stay within traditional Medicare need to manage hospital and professional insurance with their own unique cost sharing (Part A and B), potentially buy a Medicare Part D drug plan and look into a MediGap supplement to get some catastrophic protection. People who buy A&B only Medicare Advantage can avoid thinking about supplements.
Medicare is complicated. It is a weird benefit design that was cutting edge Blue Cross/Blue Shield thinking from 1964 with several kludges added to it since then to solve real problems. Medicare Advantage plans have the potential and ability to be a bit less kludgy. And sometimes that non-kludginess is quite valuable to people in the right circumstances.
PST
The broad subject of who should choose Medicare Advantage vs. who should choose traditional Medicare plus a supplement plus drug coverage is one that I think would be of great interest to many of us here. We do skew a bit old, so many of us are facing that choice or might want to consider changing. I wish there were some kind of decision matrix that would help.
David Anderson
@PST: That is a damn good point. I will outline some thoughts in the next couple of days. But the biggest piece of advice is go talk to the Area Agency on Aging etc. and get real advice.
dnfree
I’m risk-averse so I have traditional Medicare A and B and supplement plan F and a drug plan D. All of it stays the same every year except for checking the drug plan so it’s not too complicated after the initial setup. (Plan F has no copay and is going away.)
This setup doesn’t cover vision or dental as many Advantage plans do, but you can have a heart attack or major surgery and not pay a penny, and you can go to any doctor anywhere in the country and not be out of network. Those are major benefits that to me make my higher monthly cost worth paying.
The Advantage salesman in our area even said, “IF you have known medical conditions, and IF you can afford it, you’ll be better off with a supplement.”
dnfree
The other key point is that on your initial signup they can’t consider your medical history in calculating your cost. If you want to switch later, they can consider your health. So you can’t just plan to switch later if you get sicker. And if you don’t sign up for a drug plan when first eligible, you’ll pay a penalty every month for the time you weren’t enrolled. Sign up for the cheapest Part D if you don’t need medications, or an Advantage plan that includes drug coverage.
delk
I’m curious about Plan F. Whether to hang on to it or switch to an Advantage plan. The problem with my Plan F is that I am under 65 (just turned 57) and the monthly premiums are pretty high. I’m wondering if I will eventually be priced out before I hit 65. Had Medicare for 7 years as secondary but lost my employer provided insurance at the end of August. Was given just 2 weeks notice so grabbed the F. A lot of the advice I got was the same, they have never dealt with under 65. I got a lot of conflicting information.
Barbara
David, you need to amend your post with the following information: You cannot combine a Medicare Advantage plan with a standalone Part D plan. People who buy “MA only” benefits almost always do so because they have some kind of wraparound (e.g., unions sponsored) retiree coverage that includes generous drug benefits. Nearly 90% of beneficiaries in MA plans have combined MAPD benefits.
Barbara
@dnfree: Wow, he should not have said that to you. It could be the case that you would be better off but it could also be the case that he is preemptively trying to weed out beneficiaries with existing health conditions. Because whether they are better off or not is debatable, but the MA plan is better off with healthier enrollees.
You do NOT need Medigap if you have Medicare Advantage. If you feel better about getting Medigap, then you probably should stick with FFS. It’s true that some MA plans have supplemental benefits like dental and vision and those are serious draws for many people, but you really need to read the fine print about how they work, their dollar limits, deductibles, and so on if that’s the only reason you would enroll in the MA plan.
Ruckus
I was able to use a total plan, the VA, rather than any Medicare coverage. I’ve seen what Medicare does and doesn’t do. It is far better than nothing at all but it is not great coverage and from my and other people I know’s experience it is not good enough to work alone. It was designed at a time when medical costs were far lower and life extension was fairly non existent. Today it is inadequate by itself. With the worst half of our political system it will never be as good as it should be.
Elizabeth
Thank you for this article, and everyone in the comments for the discussion, which is all news I can use at age 64. Like dnfree I am risk averse, and had pretty much decided to go with a Medi-Gap supplement. I have watched that combo work extremely well for my mother over the last several decades, with her able to access cutting edge specialists in our large metropolitan area who have brought her back from severe health challenges like stage 4 ovarian cancer (10+ years cancer free), when I am not certain that an Advantage network plan would have done the same; that is strictly my opinion. She is very informed and pro-active re her own health, so this suits her personality.
OTOH, many of her friends have the excellent Kaiser Advantage plan, primarily for low cost and ease of use, and there are many benefits there, too. It’s a good deal for many people, and for example ensures they get regular screenings, preventive care, and ongoing medications with ease.
Again, very grateful for these timely and informative discussions!
Jager
I’m very happy here in sunny SoCal with my Kaiser plan and Medicare. 8 bucks a month with minimal copays.
Barbara
@delk: You must be eligible by reason of ESRD. This is a really complicated situation, worthy of finding someone who understands how ESRD specific coverage works. There are resources on Medicare Supplement policies (https://www.medicare.gov/Pubs/pdf/02110-Medicare-Medigap-guide.pdf?) but it’s likely your state also has some specific rules that might deviate from normal, because Medigap isn’t normally available to people under 65 unless the state says it is.
raven
So I retired and enrolled in medicare and the Anthem “F” supplemental and I receive a subsidy to cover that. My wife is 62 and is supposed to stay on the system health insurance until she turns medicare and then she gets the subsidy too. I went in the website to look at our account yesterday and there is a letter indicating that we have no coverage on her as of Oct 1. I’ve been on the horn with support and the best I can get is they’ll look into it but it may take “2 or 3 days”. I’m assuming it’s some kind of fuckup on their part but since this is part of our master plan for the future it’s pretty freakey!
delk
@Barbara: I’m disabled but not end stage renal. I’m in Chicago and it’s a BCBSIL plan. It’s also a select plan because everyone I see is in network.
dnfree
@Barbara: I feel better off with my supplement plan. It’s paid for any medical visit or emergency anywhere I’ve been in the country. The only bill I’ve ever had was $24 for some test Medicare didn’t cover during cataract surgery. I’m never out of network. My medical costs are quite predictable. If I want a second or third opinion I can go anywhere to get one.
Barbara
@delk: Still a special situation. I would work with people who are knowledgeable about disability in particular. These are the furthest corners of the Medicare program, and understanding how it all comes together in your situation is not easy to figure out.
Kelly
@raven: Were you the primary name on your pre medicare insurance? I’ve read that can result in the younger spouse getting lost in the shuffle. We plan to put my wife’s name as primary on our Obamacare this year to reduce the odds of a problem.
I’ll age into Medicare June 2021 so I’m also finding these discussions useful.
Ned
I hardly ever comment on the BJ feed, but I’m going through this right now. I have had an advantage plan for two years, and so far so good, but there is that annual out-of-pocket cost that makes me uneasy. The Keystone plan I have now here in PA, (I’m nearly 68, and have SS also), has an OOP capped at 5600.00, so if I land in the hospital, that’s a lot of money to handle. So I’m shopping around for a new plan also because I moved to DE last year. I pay the $135/mo. for medicare which is deducted from SS benefits, and 35.00 for the Advantage plan. Not much less than I paid for a silver plan through the exchange when I was 64, with subsidies. Medigap seems to cost more than an advantage plan, and many advantage plans can cost much more, but some cost 0.00. It’s really hard to find, or get in touch with, someone to explain this all to me.
When I turned 65, I thought I could finally get me that free government health care, Uhuh, that’s not how it works. When I told my kids, they all thought it was free also. I wonder if everyone wanting medicare for all realize this also?
Butch
Frustrating to me that the folks who run Medicare will stay busy complaining about how people don’t understand Medicare rather than putting some effort into making it understandable. I had an Advantage plan last year and wasn’t sure it was worth it but then I was told that if I drop it my cost for Medicare will actually go up. Is that right? Given the cost of spouse’s individual policy through BCBS I can’t even think about buying a Medicare supplement so I have to stick with Advantage.
StringOnAStick
@Ned: No, the young Bernie partisans I know are quite sure that Medicare is free and just like single payer is in Europe, plus another example of how the evil Boomers (who are entirely responsible for fucking up the planet, spit) get everything for free.
I love SP Warren but her insistence on getting rid of all company sponsored health insurance is a sure fire way to lose the general election. The majority of people now like the ACA, and the R’s talking about how awful it was before the majority came to that conclusion was part of his we lost the D majority in Congress. Just campaign on improving this already po popular program!
RAVEN
@Kelly: Yes, I’m part to a group that goes through AON to enroll and I hope that’s the issue.
Barbara
@Ned: The out of pocket cost is the maximum you would be expected to pay. It is generally pretty stable across MA plans in a market, but you can look at it on the plan finder comparison website. Zero premium plans tend to have fewer benefits, because the money available to provide a richer benefit has instead been rolled into keeping the premium low. Many people with insurance view paying premiums as wasted expenditures for any month in which they don’t “use” their benefits. These are the people who will always choose the lowest premium no matter what else they are getting or not getting. It drives health economists crazy. Medicare always tells people to look at the “average total cost” metric as the starting point for assessing the relative likely cost for plans, but much depends on your own needs.
Barbara
@StringOnAStick: Yes, I don’t know why she has made herself so apparently inflexible on this point. Most people don’t really understand how Medicare works, and how dependent it has always been on private insurance, but also what a rotten, siloed benefit structure it has, compared to Medicaid or most commercial insurance.
Pam
I rarely comment but wanted to say my spouse and I are happy with our MA plan. But we have had to do research every year because changes year to year can be showstoppers — dropped plans, changes in hospital/ doc networks, etc. This is our fourth year and the first time we have been able to keep the same plan. As we age making good choices will get more difficult and that’s a real concern
dww44
Spouse and I are 9 years into Medicare parts A and B and a supplemental Plan J insurance plan, which, although not cheap, has served us well to date. We’ve been contacted twice in the last couple of weeks by a Humana rep (they provide our drug coverage) and have been told that if we can afford the premium on the Plan J we might be better off with it. At the time we bought the coverage the company told us that was the last year that Plan J would be available.
Spouse likes the convenience of the supplemental and not ever having to pay anything when we make our periodic doctor visits. No dental coverage and no vision coverage though. We’re self-insuring on that. Plus the Humana drug premium for me just doubled, while that of a 92 year old friend who has 3 times the 3 prescriptions I have, went down. My 3 are not rarely used drugs, and are generic. Time to get on the computer and start figuring out options.
Ned
@Barbara: Thanks for that plan finder machine. I’ll take a look. I’d love to see a comparison of OOP costs from different plans to an actual in-patient hospital procedure, but since the costs are so impossibly varied, that may not be possible. When Repubs talk about “shopping around for health care procedures” is if I’m looking for a used car, I injure myself from eye rolling.
Raven Onthill
Having watched what the limited network of a supposedly-good Medicare Advantage plan did to a friend, I think you are defending the indefensible.
EthylEster
Shorter DA: No.
Ruckus
@Ned:
I’ve been shouting this on BJ and other places for some time. People don’t realize that Medicare is not free, at least part B, D and F are not. I’m not sure if it was ever free or if it always had a monthly payment out of your SS.
But let’s face it, healthcare is never free. It has to be paid for in some way. And there are many ways to accomplish this. What I’m afraid of is that too many are running on MfA and it’s going to backfire, because when people hear how it will be paid for and how much it will cost they freak out.
It has to be explained by how people pay for healthcare insurance NOW and how that would differ with any new plan. Maybe a good way would be for someone to do a spreadsheet with cost averages per state now – and what any new national plan would differ. At least that will have some realistic meaning.
Elizabeth
Honestly, I’d really rather stay with the ACA than switch to MediCare. It seems like a better deal, and has a cap.