The Nuts and Bolts of Medicare and Advantage Plans
Original Medicare is a program that has no maximum out-of-pocket meaning if you have something serious happen and the bill is $350,000, you are on the hook for 20% of that bill or $70,000 and it could go higher. So how does one avoid this trap that not many seniors really understand?
There are two ways of accomplishing that; one is using a Supplement and standalone drug plan and the other is using a MAPD or Medicare Advantage Prescription Drug plan from many insurance carriers here in Nevada. In fact, there are 84 different plans in town currently.
So the issue is you are now turning 65 and not working or working beyond your 65th birthday. The are several items you need to take into consideration before deciding which option works best for you. Most of us would think that their current group plan will work as it has a deductible, maximum out-of-pocket, and a drug plan attached. That will work if you understand that if your company has more than 20 employees you can keep your current group coverage but should get a letter from the HR department annually stating that your company insurance and attached drug plans meet the minimal essential coverage as dictated by CMS. If they do not meet those standards or your company has less than 20 employees, you must go onto Medicare Parts A & B and then decide what else you need.
Consider these facts for a moment. Your company has 25 employees so you could stay on the group plan. What you should consider is the monthly premium you have to pay and if you also need to include your spouse who could be younger or older than you. Next, what is the deductible, maximum out-of-pocket, and cost of your medications? Assume for the sake of discussion that these are reasonable, then look at what’s available in the marketplace for seniors. As stated previously in Clark County Nevada there are 84 plans. I do not expect someone not in the insurance business to understand the nuances of insurance, but independent brokers know the marketplace and we only get paid if we sell you something. If you don’t buy, we don’t get paid. In my opinion and probably only mine I will help anyone understand what they are buying and hope with good service and a fair analysis of their situation that I get the business. Sometimes I do and sometimes I don’t. That’s the way business is run and I agree with the way it is handled.
Having said all that, the real issue is what works best for the senior. The way I conduct business is to get an understanding of your doctors, your medical issues, and the medications you take. I have the tools to look up all this information and my system tells me the best choices for you. Since we all get paid the same from each insurance company there are no favorites because of higher commissions. This is an almost perfect situation to have an honest and open discussion of your needs and to make sure they are fulfilled.
Now the choices are: a Medicare Supplement plan which you buy and pay a monthly premium (which is up annually) and a standalone drug plan to complete the package. The supplement allows you to see any doctor at any hospital anywhere in the country without a referral. This is the more costly method but there are reasons why seniors pick this over the MAPD plans. Those seniors who have money want the best with the most choices. Many seniors are not in that boat and have to go the MAPD route. Not a bad way to go but you need to understand the differences between plans. Educate yourself but understand your options and talk to a licensed insurance broker who can guide you to the best option for you.
The other option is a no-premium Medicare Advantage plan which includes drug coverage but can be limited to the doctors as many are in groups that service specific plans but not all plans. These plans come in HMO, PPO, and MSA-type plans. The HMO and PPO are the most popular, so we are not going to review the MSA plans. In the 20 years I’ve been a Medicare broker have never sold an MSA plan and don’t intend to do so.
The HMO plans are very popular because of no monthly premium and all components needed by seniors are in the plans. The PPO allows you to go out-of-state and see any doctor in their national network but in practicality going out-of-state is rare unless you are traveling. All plans cover urgent or emergency services worldwide, so it is not an issue.
The major difference between the HMO and PPO are cost of services rendered. The PPO due to the freedom of travel and seeing any doctor has higher service costs and perhaps a small monthly premium under $100 per month. That allows you the freedom to go anywhere in the country without a referral but would never leave Nevada without one because I don’t know how the doctor or facility will react on the other side. Better to be safe than sorry.
The trend today is allowing these HMO plans to eliminate the need for a referral fee, and some allow national coverage without referrals. If you go that route, understand fully how these plans work and stay within the guidelines.
As indicated above several times these plans tend to be complicated so having an advocate like an independent broker to assess your needs and offer several options is a safe and great way to proceed. Remember Ronald Reagan said it best. “The nine most feared words in the English language are, hi, I’m from the government, and here to help. It’s called Caveat Emptor (buyer beware).
The purpose of this blog is to inform you of the options available and to seek the help necessary to make the best decision for you. I am available to talk to or meet anyone who is approaching their 65th birthday or is planning on retiring shortly. Gather the facts so you make an informed decision and not one because you have three days left before your birthday month.
Much success to all the seniors out there as I am one as well. Much of what I mentioned today are real facts that happened to others and were able to assist them in making the best decision for themselves and their family.
I hope this information is useful and if anyone has questions, please contact me via phone or email and I will respond quickly.
Also, if you are in need of Medicare information, take a look at Medicare 2023 Information.
The Barend Agency Inc.
Len Barend, Broker