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Key Tips to Picking the Best Medicare Supplement Plan


Medicare is usually a brand new world after decades of private health insurance.

 

New terms.  News names.  A whole new language (Part A, Part B, etc).

 

You can run your quote anywhere and needless to say, you're getting so much mail on it that a few trees have suffered as a result.


The problem is that most of that "paid" mailing is pushing one plan or another...not necessarily what's best for YOU.


SO...let's boil down the key points to understand so you can make an informed decision.


As independent California medicare supplement agents, there's no cost for our assistance and we work with all the carriers!

 

Here are they points we'll cover and feel free to reach out with any questions at 800-320-6269 or at help@calhealth.net   

  • A quick lay of the Medicare plan landscape
    The supplement versus advantage plan decision
    The most popular plan on the market
    Don't forget Excess
    Part D for medications
    Pricing shenanigans and stability


Let's get started.  This is meant to be a quick summary...definitely contact us with a personalized walk through the options above.

We covered the How and When to enroll questions here.


A quick lay of the Medicare plan landscape

 

Medicare basically works like an 80/20 plan with deductibles.


They're paying 80% of the allowed charges and you're picking up 20% after two different deductibles are met.

 

  • Part A is for hospital or facility care and it has a larger deductible that goes up a bit each year
    Part B is for doctor costs and it has a smaller deductible which goes up each year.


That's the nuts and bolts of it!

Not so bad, right?

 

The Medicare supplement plans fill in these big holes (plus some smaller ones) with different benefits.

 

There's a range of plans from A to N with different levels for the deductibles and coinsurance above.


The least expensive plan on the market is the A plan and the richest plan is the G plan.


There may be high deductible versions of the G plan which are even cheaper.


We'll touch on Excess below since it's a very important consideration among the plans.

 

Let's first dive into the big decision before looking at the plans.


The supplement versus Advantage plan decision

 

We have a whole section on Medicare supplements versus Advantage plans.

 

Advantage plans are essentially HMO style plans designed to wrap around Medicare.

 

There's a big sales push for these since they pay commissions all up front and it's pretty easy to sell a product with zero or very low premium.

 

You'll get lots of mailers for these plans!

 

Nothing's free so what gives?

 

First, they are HMO in design so you're limited to the doctors/hospitals you can use (smaller networks) and the carrier has more control over medical decisions.

 

That's just how HMO models work to squeeze costs.

 

The bigger issue that never seems to be in those mailers is the backend.

 

With medicare supplements..especially the G plan, you can expect very little out of pocket when you're sick or hurt.

 

With Advantage plans, there's generally a large out of pocket maximum.

 

This is an amount you have to pay before the plan goes 100% in a given calendar year.

 

It's usually a few thousand dollars.


Essentially, you're saving in monthly premium now with additional risk if something happens healthwise.


Here's why the carriers love Advantage plans


At age 65, it's not exactly the best age to take that gamble!


On average, healthcare costs double with every decade of a person's life.


The carrier is more than happy to offer you a plan with shared backend in the thousands during a time you're more and more likely to have such events.


Let's say a G plan is $130/month at age 65.  An Advantage plan is zero dollars monthly with copays and $3K max.


If you have bigger bills and hit the $3K, that's the equivalent of $250/month premium!


Double what the G plan is.  See why carriers love it?


The issue is that once you get past the open enrollment period, you may not be able to change from the Advantage plan to a supplement.


You're now making this same tradeoff at age 70?  75?  See why they love it?


Again, check out our big review of Supplements versus Advantage plans.


So...what is the most popular supplement plan...by far.


The most popular supplement plan on the market


The G plan is the most popular supplement on the market.


It replaced the old F plan, which used to be the most popular option.


Essentially, the G plan fills all the holes of Medicare at 100% except for the Part B deductible.


This means you'll pay the doctor visits for the first few hundred (goes up a bit each year).


Otherwise, the G plan is the richest option on the market and since we're age 65 and up, that's the right bet as healthcare costs go up accordingly.


Let's turn to one important piece that really makes the G plan pop.


Don't forget Excess


There's a term that you may not recognize if you're new to Medicare.


Excess.


Basically, doctors can choose to charge up to 15% more than what Medicare allows.  


This is becoming more common as Medicare is forced to squeeze costs with budgetary issues.


The problem is that the 15% is not capped.


We definitely want excess addressed and only the G plan covers it.  


Most people (and sales literature) total skip over this because they don't understand the ramifications.


Medicare is projected to be insolvent by 2025.  They will make changes and you can expect further tightening of reimbursement to providers.


More doctors will take the 15% which is already the trend.

 

Let's say you have a surgeon that charges excess and his/her charge $10K.  

 

You're on the hook for $1500!

 

Again, there's no cap or limit to this 15% charge so we want it addressed.  


That basically makes the G or G high deductible mandatory.  


What about medications?


Part D for medications


There's one more key piece...RX!


A whole separate plan addresses prescriptions (outpatient like what you at a pharmacy) and it's called Part D.


This is a plan purchased through a carrier and we can run the quote for you.


We just need:

  • Medications and dosages
    Zip code


The online quoting tool will automatically calculate your best value based on current medications.


We can change Part D plans at the end of every year unlike the supplement plans.


We're happy to run this quote for you alongside your Medicare supplement option.


A full review of Part D is here.


Let's finally talk about pricing.


Pricing shenanigans and stability


This is actually very frustrating to us.  People are already confused (hopefully less now!) in dealing with the newness of Medicare.


The plans are standardized so a G plan is a G plan in benefits and network regardless of the carrier.


What you're basically shopping then is pricing, pricing stability going forward, and ease of use.


Most of the carriers are pretty easy to work with since they're all tied in with Medicare.

It really comes down to pricing!

Here's the rub...some of the carriers will offer discounts up front for new enrolled (new Part B's...usually turning 65 or leaving employer health plans).

This makes them look very cheap up front and then they charge more for the next few decades!

 

When you run a quote, you're just seeing this one carrier that's 20% cheaper not realizing that you'll more than pay for it over the life of the policy.

Very similar to the Advantage versus Supplement trick above.

 

In terms of pricing and stability, Anthem Blue Cross and Blue Shield of California have been dominant for some time.

They may have small discounts for first year but their longterm trajectory is lower than other carriers.

Remember...it's not the first year that matters with Medicare since you'll have the coverage for years!

That being said, they're usually cheapest as well which makes sense since they have the longest track record in the supplement market.

You can run your quote above to see how it stacks out for you.

Of course, there's no cost for our assistance and we're happy to help with any questions! 

800-320-6269 or help@calhealth.net



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