A recent article I read shows that more than 50% of seniors on Medicare choose a Medicare Advantage Plan or MAPD.
The reasons are many why this is so and to begin with, these plans offer so much more than Original Medicare. They also have something that Original Medicare does not have and that is a maximum out of pocket to protect seniors when something serious happens medically. Many of these MAPD plans offer additional benefits like dental, vision, gym membership and prepaid debit cards to use to buy essentials they bought anyway. The plan pays for these additional benefits thus the senior does not. That’s why these plans are so popular.
Original Medicare is the only insurance in the United States that does not have a maximum out-of-pocket. We have discussed this in previous blogs but to explain why MAPD plans are so popular we had to revisit the restrictions of Original Medicare, of no maximum of-of-pocket. That means that if you have a medical bill of $300,000 you will be liable for 20% or $60,000 of that bill. Additionally, you could end up paying the 15% that Medicare disallows. For most seniors, this is disastrous financially.
Today, seniors are also changing their minds about which type of plan to choose. Previously, MAPD plans with no monthly premium were chosen by 83% of all seniors which is down from previous years where 87% of seniors chose a no monthly premium plan. The reasons are many, but the speculation is that the reason seniors chose the no monthly premium plan was saving money as many are on fixed incomes. That trend is changing as many seniors as possible realize that the benefits may be somewhat better if they pay a monthly premium. HMO plans traditionally have zero monthly premium plans while the PPOs usually had a low monthly premium. Part of the issue is that these HMO plans have been saturating the market and many of these plans simply have more clients than they can reasonably handle so plans with a small monthly premium are getting viewed to see their doctor more often with less waiting time between visits.
Seniors Making Smart Choices
All these reasons are legitimate; however, seniors are still buying both plan types while others seek a Medicare Supplement with a standalone drug plan due to chose of doctors, freedom to go anywhere in the US, and great coverage. Many of the major healthcare facilities in the US only take Original Medicare and or with a supplement. Those facilities are on the leading edge of medical treatment thus many seniors with significant health issues seek out these facilities for service. Choosing a Medicare Supplement means a somewhat large monthly premium that rises as you age. Most seniors on fixed incomes cannot afford these plans. The MAPD plans are still the most popular method of obtaining quality healthcare, however, there may be some compromises in facilities or doctors depending on the plan chosen.
When working with seniors my approach is to determine which doctors, they want to maintain along with the medications they take and if there is a family history of a specific disease. The other major factor is their ability to pay the monthly premiums of either the supplement or drug plan. Having this information allows me to determine which of the 84 plans in Clark County would work best based on the factors stated above. When determining the plan that would meet their needs means the client will be happy with the coverage and not seek to change it during the Medicare enrollment period. A happy client means they will stay with the plan because it works for them.
Many seniors choose the MAPD-type plans and usually stick with them for the long term. I have many very happy seniors on these MAPD plans because I invest the time upfront to make sure the plan fits their needs. Since all MAPD plans pay the same amount, there is no reason not to invest the time to determine the senior’s specific needs and help them make the best decisions for themselves.
I suspect that the popularity of these MAPD plans will continue to rise due to the many additional benefits offered by these plans. The current trend is a somewhat downward trend, but I believe it is temporary. Many states do not have the variety of plans that states like CA, NV, AZ Washington, Oregon, Florida, NY, NJ, and other largely populated areas have, and I suspect that this will be changing in the near future.
Seniors will continue to seek out the benefits in the MAPD world and I expect that to continue indefinitely.
I hope this information is useful and if anyone has questions, please contact me via phone or email and I will respond quickly.
Also, take a look at Medicare 2023 Information.
The Barend Agency Inc.
Len Barend, Broker