Navigating the Marketplace
You are turning 65 shortly and need to decide what type of plan to choose in addition to Original Medicare. While Original Medicare is a great plan, there are holes that need to be filled. The basic reason why a senior would need to augment their Medicare coverage is that Medicare is the only insurance without a yearly maximum out of pocket. Said another way if you had a $300,000 hospital stay, you would owe 20% or $60,000. That is a very costly hospital stay and why you need something in addition to Original Medicare to defray those costs.
Since Congress is not on Medicare, or Social Security for that matter, they don’t care to fix the major hurdle in Medicare; no maximum poot-of-pocket.
In Nevada, there are 84 different options. That is mind boggling for many seniors, thus they seek the advice from a Medicare broker. Since the brokers cannot charge anything for their services this is a great way to determine what fits your needs.
Let’s review the options. Original Medicare with a Medicare Supplement and a standalone drug plan, Medicare Advantage plans or MAPD plans.
Medicare Supplement and a Standalone Drug Plan
Medicare Supplement’s offer plans A through N in Nevada. The CMS (Centers for Medicare and Medicaid Services) determines what each plan’s benefits are while the individual insurance companies determine the monthly premium.
These supplement plans do not offer drug coverage, so you are required to have a separate drug plan regardless of whether you take any medications or not. The standalone drug plans each have their own drug formulary so take the time to verify that your medications are covered by the plan you chose. Remember, the drug formularies change annually so it is important to verify each year that your plan covers those medications.
Each insurance company decides what the monthly premium will be for their plans, and they vary significantly in Nevada and elsewhere. These premiums do go up annually so take that into consideration.
Suggest you look at the You and Medicare Book sent by CMS to everyone 65 or older to review the various supplement plans to choose what is best for you. Otherwise contact a Medicare broker who is familiar with all the plans to guide you to the best option for you.
Medicare Supplement Plans are permanent insurance, and you cannot change plans without going through underwriting and many seniors cannot qualify. In Nevada we now have a birthday rule that this broker co-authored and was passed by our legislators. This means you can change your Medicare supplement plan the month of and month after your birthday and can do so annually. I personally changed my supplement and saved a little over $100 per month.
Medicare Advantage Plans known as MAPD Plans
These plans are offered by the insurance companies, and all have many ancillary benefits for seniors. These ancillary items include gym membership, over-the-counter benefits, and some plans may offer healthy foods. Each MAPD insurance company designs their own plans, and they are very competitive so review your options carefully to pick the one that works best for you. Make sure your doctor takes the plan and your medications are covered. Remember each insurance company can price their drugs the way they want so there will be pricing differences for the same medications. The only standard pricing is for diabetic medication, and it is capped at $35 per medicine.
These MAPD plans typically do not have a monthly premium because the government is paying the insurance companies a monthly fee for each enrollee.
These plans in Nevada are either an HMO or a PPO.
The HMO plans simply means you cannot go out of network unless there is an emergency and that you need a referral to see a specialist. One carrier offers their HMO plans without a referral to see a specialist. I suspect that might be a trend in the future but that is my opinion and not fact yet.
Each HMO plan has a network of doctors that you can see, and it is advised that if you want to keep your current doctors to verify, they take the plan you want before signing up.
The PPO plans have higher copays for services and a higher maximum out-of-pocket because you have the freedom to see any doctor in their nationwide network. These PPO plans mean you do not need a referral to see a specialist, which for some is very important. Also please confirm your doctor is in network and that your medications are covered and at what price. The PPO plans also allow you to go out-of-network, but you will pay higher prices to do so. That is the flexibility of the PPO plan.
At this point, I believe it’s important to explain when you can change plans. There is the Annual Election Period, which runs from October 15th through December 7th and during that time you can change your standalone drug plan or change your MAPD plan. You can change it as many times as you want during the AEP, but the last one chosen is the one that starts on January 1st.
From January 1st through March 31st there is the Open Enrollment Period where you can change your MAPD only one more time and then you are locked into that plan until the next AEP. You cannot change your standalone drug plan during the OEP. I believe that is a major flaw in the process and we need to change that to allow seniors to change their standalone drug plans during OEP.
In Closing
To sum everything up; Medicare is complicated and confusing to many seniors so seek the assistance of a Medicare broker who knows the local marketplace and can guide you to the plan that meets your needs. Ther is quite a lot of information in this blog so feel free to reach out to me if you have questions on any aspect of Medicare. We are here to help.
The Barend Agency Inc.
Len Barend, Broker
Cell:702-250-2200
Email: len@insurance4unevada.com