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How to Compare and Pick The Best Medicare Supplement Plan 

 

The world of Medicare often feels alien to new enrollees.


DIfferent ways of saying everything and a literal alphabet soup of options (Part A, Plan G, Part D, etc).


Then there's the whole question of which plan to pick in order to fill the rather large holes of Medicare..especially the 20% coinsurance which has no cap.


Let's walk through the process and really understand how to compare the plans available.


The networks and benefits are standardized by the law so it then becomes a question of pricing and carrier.


We'll look into that as well.


Here are topics we'll cover:


Let's get started!


What does Medicare not cover?


At its heart, Medicare operates like an 80/20 plan with deductibles.


Two deductibles actually:



These go up a bit each year with inflation and you can check the current level when you run your quote here:


QUOTE


There are really 3 major holes to fill in with a supplement, and actually, one that's a deal-breaker.


First, you have the deductibles.  This is a fixed dollar amount so we know what your exposure is.


A deductible is an amount you pay first before the plan kicks in.  It annual (Jan - Dec) regardless of when you come on board.


The real reason to get a supplement deals with what happens after the deductible is met.


That's the 20% co-insurance.


This means you pay 20% of the expenses after the deductible is met….forever!


For example, if we had a $100K bill in the hospital:



That 20% share is a big risk...just short of $20,000!


There's no cap to this 20% under traditional medicare so we want to address it first and foremost.


Then there's a hidden risk that most people new to Medicare don't know about.


Excess.


Essentially, doctors can choose to charge up to 15% higher than what Medicare allows.


This is called excess.


Here's the issue...more and more doctors are choosing to do this as the reimbursement is under pressure from Medicare due to budget constraints.


There's no cap to this as well!


That means if we have a $10K bill and the doctor charges the 15% excess, we'll be on the hook for $1500.


This piece is really important and it drives the decision on what plan to consider.


So...let's start to look at Medicare supplement plans in light of this.


What are the different benefits offered by supplement plans?


The Medicare supplement plans come in a range of options from A plan up to M with many letters skipped (just to make it confusing).


Here's a general chart for comparison:


ChART


You see the core benefits we described above plus a few others (skilled nursing facility, pints of blood, etc).


Really, skilled nursing is probably consideration #4 after our key concerns above.


A few notes.



This really leaves a range of different approaches on minor benefits since our 20% is taken care of.


Depending on your age, there may not be much difference between the various options.


The range is pretty narrow which makes sense since Medicare is essentially picking up 80% of the expenses.


This leaves us with the question...what is the best plan?


Let's go there now.


What is the most popular medicare supplement plan?


The most popular plan is also the best plan generally.


The G plan.


Here's the tale of the tape:



It really comes down to excess.


The importance of excess


Trading a few dollars monthly in costs for uncapped risk defeats the purpose of insurance.


More importantly, it's fighting the tide of what's going on with Medicare.


There will only be further tightening with Medicare's budgetary issues and sheer demographics (fewer working people paying for retirees) going forward.


This makes excess coverage more and more important with time.


As it is, Medicare is expected to start running deficits in 2026 for decades after.


Once we get past our initial open enrollment, window,  we can't upgrade our supplement choice without health consideration.


The biggest issue with excess is that there isn't a ceiling on the exposure.



The G plan is the only one that covers this risk and the cost to do so (along with other comprehensive benefits of G) far outweigh the cost.


That's why the G plan is by far, the most popular medicare supplement plan.


It replaced the old F plan with the only difference being that the doctor deductible (around $150/annual) is not covered with the G.


Based on this popularity, the carriers have started to "wrap" other benefits around the G.


Let's look at those.


What about the new expanded G plans


Some carriers have chosen to wrap add-on benefits to the traditional G plan.


These will generally have an "extra" or "enhanced" in the game such as G plan Extra.


Anthem Blue Cross and Blue Shield of California led the pack on this one.


The gist of it is that Hearing Aid and Vision benefits have been added for generally a pretty small increase to the monthly premium.


If either of these are needed, it's not a bad way to handle it.


Run your quote here to see the difference in cost from the traditional G or reach out to us at help@calhealth.net for full details.


Dental can be added separately if needed.


So, once we've narrowed the plan down, how do we pick the carrier?


Comparing Medicare supplement cost


As we mentioned, the benefits are standardized so a G plan will walk and talk the same regardless of carrier.


It then comes down to the following:


Cost is easy to compare via our link here (free service).


Ease of use is a little trickier and that's where our experience with 20+ years comes into play.


Generally, Blue Shield of California, Anthem Blue Cross have dominated the California medicare supplement market.


Health Net has quickly tried to gain access and occasionally, they're priced well.


United is the current underwriting carrier for AARP and they have lost some of their price advantages from before.


Essentially, AARP would be very inexpensive when you turn 65 and get more expensive relative to the other carriers over time.


This felt a bit "bait and switch" to us since people may not be able to change carriers but it came home to roost in that healthier members will price-shop and switch carriers later when they're older.


This just accelerates the cost gains as we get older (riskier members can't move due to health).


For that reason, Shield and Anthem have been the top choices for decades now.


It tends to bounce back and forth between the two of them as they compete for market share.


In general, they're pretty comparable in cost but this can differ from year to year.


You can quickly compare all the carriers here:


QUOTE


We have to address the next big question.


The Part D question


Although we have a full breakdown on getting Part D in California, let's hit the highlights.


Part D is the prescription benefit.


The supplements do not cover RX so we need to add Part D for that coverage.


You can mix and match carriers for Part D and in fact, most people do.


We can quickly run a quote for you...just send over:



We'll send a report direct from Medicare with the best-priced plans in your area based on your medication costs!


We can change plans at the end of each year regardless of health so there tends to be a period of "re-shopping" each year.


Finally, there's a penalty for not enrolling when eligible.


It's 1%/monthly and goes on indefinitely.


This means that if you wait 12 months to enroll in  Part D, it will be 12% higher!


Wait 3 years?  36% higher.  


For this reason, it generally makes sense to at least get a "placeholder" plan - the cheapest plan on the market to avoid the penalty.


Of course, it's also important to get the protection that entails.


For information on the process and timing of enrolling for Medicare and supplement go here!


There is no cost for our assistance and no question is too small.


Call 800-320-6269 or email us at help@calhealth.net


Be well!