FREE NEWSLETTER
I’LL BE TURNING 65 this year, so I’ve been researching my Medicare options. Even though I work in health care—and many of my patients are on Medicare—the task of choosing a plan is no less onerous for me.
I’ve read the information provided on Medicare.gov and watched numerous YouTube videos from insurance brokers. These brokers tend to support two types of Medicare coverage. Retirees might opt for a bundle that includes Medicare Part A, B and D, plus a supplemental private insurance plan commonly known as Medigap. Alternatively, seniors could choose Medicare Advantage, which effectively combines Medicare Part A and B, along with additional coverage for things like prescription drugs and eyeglasses, into one comprehensive policy.
For those who aren’t fluent in Medicare jargon, Medicare Part A covers inpatient hospital care and Part B outpatient care. Part D covers the cost of prescriptions not administered in a hospital. You can look up the finer points here.
Over the past three years, I’ve had some experience handling option No. 1—traditional Medicare plus supplemental insurance—for my elderly parents. During this stretch, both were in the hospital for different health issues that resulted in charges ranging from $10,000 to more than $60,000. Their traditional Medicare coverage bundle has always paid all their bills.
My stepfather passed away in 2021, but I continue to manage these bills for my 89-year-old mother. I’ve been impressed that all of the bills have been paid and there have been no additional out-of-pocket costs.
Meanwhile, many of my patients have Medicare Advantage plans. Most seem happy with the coverage. Their monthly cost is minimal and, with some policies, there are extra benefits, such as gym membership reimbursement, plus vision, hearing and dental coverage. These extras aren’t covered by traditional Medicare and can represent important savings for people on fixed incomes.
Those patients who aren’t happy with their Medicare Advantage plan generally complain about the high cost of medications or having to use in-network health care providers. These plans also require a referral from our office if the patient needs to see a specialist, and they may also need preauthorization from the insurer before getting imaging or certain branded medications.
The staff in our billing office have told me that Medicare Advantage plans tend to be more difficult to work with than traditional Medicare. For example, our office employs a medical assistant who is dedicated solely to dealing with insurance-mandated preauthorizations.
I’ve experienced the administrative burden myself. Several of the Medicare Advantage plans require me to fill out a lengthy seven-to-10-page patient history form once a year for each patient, which tends to simply repeat the extensive documentation already in our electronic medical records system. At the end of a long day, the last thing I want to do is fill out another long document that duplicates what’s already in the patient record. Traditional Medicare usually doesn’t have these requirements.
I don’t recall any patients complaining to me regarding traditional Medicare coverage, the kind my mother has. These patients can use any health care provider or hospital that accepts Medicare. They usually don’t need a referral or preauthorization from their primary care provider, either. They may have issues with medication prices at times. Drug costs and coverage seem to be a moving target for both Medicare Advantage and Medicare Part D drug insurance plans.
Recently, I had an elderly woman in our office late one afternoon with COVID symptoms that had lasted more than four weeks. She had chest pain and severe shortness of breath. She couldn’t walk across a room without having to stop due to difficulty breathing.
Based on her symptoms, and knowing that patients with COVID are at risk for blood clots, I urged her to go to one of our city’s emergency departments that day to make sure that she didn’t have a pulmonary embolism. She was hesitant to go. When I asked why, she told me that she owed money from a previous hospital visit and lives on a fixed income. She has a Medicare Advantage plan that didn’t cover all of the costs from her prior emergency department visit.
I finally convinced her to go to the hospital. Fortunately, she didn’t have any blood clots. She ended up being diagnosed with long COVID. Even though I was looking out for her best interest, I feel guilty that my recommendation added to her medical debt.
The lesson I take from this: Even though Medicare Advantage plans offer lower premiums than traditional Medicare, they often come with additional costs that can quickly add up if you’re sick. Some of these include higher deductibles, copayments and coinsurance costs than those incurred by seniors with traditional Medicare.
While not having a monthly premium for a Medicare Advantage policy might sound appealing at age 65, we might need to see a specialist in another state as we age. This can get complicated with a Medicare Advantage plan.
In fact, last fall, the Mayo Clinic—well-known for its coordinated care approach with difficult cases—warned its Medicare-eligible patients in Arizona and Florida that most Medicare Advantage plans consider the Mayo Clinic to be out-of-network. It recommended its patients instead enroll in traditional Medicare plus a Medigap policy.
All this helped guide my own decision. After weighing all the options, I’m going with traditional Medicare plus supplemental insurance, like my mother. I recently received my Medicare card in the mail. I plan to enroll in Medicare supplement Plan N, which typically covers 100% of the cost of Part B outpatient services. I also plan to buy Part D prescription drug coverage.
Which is better, traditional Medicare or Medicare Advantage? Offer your thoughts in HumbleDollar’s Voices section.
Scott Martin is a semi-retired family medicine physician associate (previously known as a physician assistant) and has been practicing medicine for the past 18 years. His previous career was in academia doing research and teaching at the University of Georgia. He and his wife enjoy traveling and spending time with family. Check out Scott’s earlier articles.
Want to receive our weekly newsletter? Sign up now. How about our daily alert about the site's latest posts? Join the list.
Thanks for the discussion here that helped me reflect on my already-made decision. As a medigap plan G holder recently I was pleasantly surprise that Lifetime is a participant of UHC’s free Silver Sneaker program. Before Co-vid, only LA Fitness was. A LT membership is $168/mon, more than G’s monthly premium. I live in 30005 – please check it out for yours. Again thanks for the discussion.
It really depends upon the Advantage carrier’s policy. In Minnesota, I have UCARE, and it has covered everything I need. Drug copays are $6-10, referrals are not always needed. We had a Mediterranean cruise earlier this year, and my wife got sick upon arrival in Amsterdam (we think a bad sandwich from Delta), received 1st aid at Schipol Airport, was transported by ambulance to University of Amsterdam Emergency Room, received IV and Rex drugs for follow up. After currency conversion, $about $1400. I submitted after we got home, and, after $100 deductible for ambulance and ER, they reimbursed me about $1200.00. I am happy with my Advantage plan.
One consideration is to do what I am doing for my first year on Medicare. I signed up for a zero premium five star Advantage plan.
I took “advantage” of the plan’s dental coverage to redo some work that I delayed when I retired and did not have dental coverage, just an ACA health plan. The cost for the procedure was $2,700 if I did not have insurance. The allowed contracted plan cost of which I had to cover 50% was $1,800, so $900, saving me $1,800.
Next I took “advantage” of the plan’s vision coverage to receive an eye examination at no cost, and $200 reimbursement for a new pair of glasses.
Total savings more than $2,000 with no premiums paid.
I have HSA dollars as insurance for any high out of pocket expenses from having a no premium Advantage plan.
The month before my 66th birthday I plan on switching to Traditional Medicare Plan G. You have up to one year to change plans with guaranteed issue without having to undergo underwriting. Traditional Medicare plan will allow more flexibility in choosing doctors and hospitals when medical issues arise as I age.
Through my ex employer, I was able to use a service called Via Benefits to cull through the myriad options available when I became Medicare eligible at no cost to myself. This service looked at the options available in my state for Medigap and Advantage plans as well as Part D options. Their recommendations were specific as to companies and plans and clearly presented pros, cons and costs. The analysis included information specific to my current health, family history and medications I was taking at the time. An extremely valuable service. By the way, they don’t sell any policies; they are fee only. I found this to be a terrific benefit for the long run.
The recommendation, in mycase, was traditional Medicare, a Medigap policy that includes benefits like gym membership, and a Part D qualified plan through a private insurer.
People’s opinion of Medicare Advantage plans partly depends on where they live. I’m covered by a regional non-profit health insurer’s Advantage plan. The plan covers 100% of the hospitals in the region and 99% of the physicians. Several of the hospitals are run by a major medical school so I probably won’t need to go elsewhere for treatment. I don’t need to get a referral to see a specialist. The plan frequently urges me to get various screening tests, sometimes with robocalls.
One number that I consider important is the maximum yearly out-of-pocket expense. I ask myself if I could afford to pay that for several years if necessary, and the answer is “yes”.
Scott,
If you can, try to find an Insurance Agent/Broker that deals exclusively with Medicare issues.
That might help with your peace of mind.
Thanks Winston. I actually consulted with a broker that specializes in Medicare supplements and this helped me to decide on Plan N.
An additional data point: I am waiting to move to a CCRC with a staffed on-site clinic. Meanwhile I am already on the internal network. This notification just arrived:
“We have been notified by several residents that they received letters stating I was no longer a covered provider through their insurance. [The network] got no notification of these changes. We are looking into it.”
The network in question is a large one belonging to a university medical center.
I’m 55, so I’m not in the medicare decision mode yet, and who knows how much it will change in the next 10 years. Nonetheless, I’m curious about one other option (assuming it exists): traditional medicare WITHOUT medigap coverage. It seems like traditional medicare is like the old employer insurance we used to get 40 years ago: an 80/20 plan, with a deductible? Is there no out of pocket max on the 20% the patient pays?
For background, I’ve been using a high deductible health plan for about 15 years, so I pay out of pocket (at discounted rates negotiated by the plan provider) for ordinary care and have the insurance in case anything big comes up. The deductible is currently 7,000 per person, 13,700 for the family as a whole, after which the policy pays for all care as long as you remain in-network. Probably the biggest benefit of the insurance besides eliminating the catastrophic expense problem (the primary role of most forms of insurance) is that the negotiated rates keep the cost down. I mostly carry the dental benefit for the same reason…the negotiated rates keep the cost down. Dental benefits really aren’t even insurance, since the total benefit in a year is capped so low ($2000 per year per person) that any difficult problem will leave you exposed to a significant cost.
You generally have to go with some kind of Medigap supplement to get the catastrophic cap, as mttt stated below one of the big deal-breakers with Part B only is the lack of a cap. Sounds like for someone like you, a Plan G “high-deductible” might be a good fit, as it works in similar ways to the coverage you are accustomed to now. In fact, Part B with a G high-deductible supplement would give you better coverage than you have now.
There is NO out of pocket max with Medicare. None. That is why people buy Medigap or MA. There has been none with Part D drug plans either, although that is due to change.
Scott, thank you for this very informative and concise article. I am a few years away from having to make this choice but this is super helpful!!
Whatever supplement insurance company you pick for your Medigap plan check to see how many “closed block of business.” (deadpool) policies the company has.
Deadpool / closed block of business, no longer sells policies to new customers, but service current policy holders. Without new and younger policyholders the yearly premiums could increase higher than other plans.
In most states you will be unable to change supplement insurance companies without medical underwriting. There are some exception on switching called Trail Right or states that have birthday rules for changing without underwriting.
Good article. My 65 year old self was attracted to low MA premiums but the octogenarians in my life haven’t liked dealing with networks, pre-approvals, and coinsurance. I went traditional Medicare
Agree with most everything said here, but consider sticking with Plan G and not Plan N. The difference in premiums is minimal with Plan G having no co-payments plus 100% of excess charges in the event a provider charges above Medicare’s approved amount. Medicare Advantage plans work fine, as long as you rarely have medical bills and can end up being a risky choice.
The $20 Billion Scam At The Heart Of Medicare AdvantageMay 26, 2023
As Medicare privatization continues, insurers are milking massive profits from systematic over billing of the government
This article is from the Lever. Medicare Advantage is private insurance, and other than lower or no premiums, it is not best for the consumer.
Traditional Medicare is best, but it is not cheap. My wife and I pay about $8,000 a year in premiums. Medicare part B is about $165 each per month, and Medigap plan N with AARP/UnitedHealthcare is $165 each also. Medicare kicks in after a $226 deductible.
@Boomerst3, so you pay about $4k each for traditional + Medigap? I am curious on how much the Medicare Advantage would have been for you (and what the delta is).
Totally agree with you that the Insurance companies are milking medicare – there was an amazing article few months back (I think in the NY Times).
My take on this very complicated subject is that, if you can afford it, when you turn 65 stick with traditional Medicare + Medigap+ D. If you should decide in a few years that you are just wasting your money, then switching to an Advantage plan is simple and relatively hassle-free. As others have pointed out, it doesn’t necessarily work this way in reverse; if you go with MA to begin with, after 6 months or so you probably can’t get a Medigap policy without medical underwriting. Sure, you can maybe move to a “guaranteed issue” state, but uprooting and moving in the midst of a personal medical crisis strikes me as a rather extreme measure. Plus, don’t be completely shocked when you discover those guaranteed-issue states have considerably higher Medigap premiums than your (non-guaranteed issue) state; after all, *somebody’s* got to pay for that guaranteed-issue privilege, and you surely ain’t the first person to come up with the brilliant idea of moving just to get Medigap coverage.
And of course, if when you turn 65 and you can’t afford traditional Medicare + Medigap + D, then there’s really no decision to be made–you just have to take MA, and hope for the best. Which may or may not be such a bad thing, depending on numerous (and often unforeseeable and uncontrollable) variables.
You have a year to change your mind about MA the first time you sign up for it. (You can’t keep switching without risking underwriting.)
So wait, once you sign up for MA, you’re stuck with it (after a year)? Or it is possible to switch but it is more onerous?
“Maybe” on question 1, and more or less “yes” on the second question. In order to switch back from MA to Medigap, you’ll be subject to medical underwriting after a year. Note, you can switch freely (back and forth) between MA and Part B during open season, but the catch is you’re subject to underwriting (after a year) to get back on Medigap. Clear as mud, amirite?
You can change, but in most states the company can require medical underwriting. If you fail, you can be refused or accepted but at a higher rate. The same applies to changing Medigap plans. When I wanted to switch from F to G, after F was closed to new people, I failed medical underwriting. I would have been charged more for Plan G than I was already paying for Plan F. (I was able to change later when Humana temporarily waived underwriting.) I failed because I have rheumatoid arthritis. Although it is now in remission it is a chronic condition and I’m sure I will continue to fail.
There is great variation among Medicare Advantage plans. Some do not restrict you to “in-network” doctors or require any pre-authorization. When I moved to a different state, I chose a Medicare Advantage plan that allowed me to go to the physician of my choice. I pay a small monthly premium for that privilege and sometimes a small co-pay. The enormous benefit I have is that I can research the doctors available to me and choose them based on their specialized skill, their professional reputation and the opinions of those I knew. That has made a huge positive difference for me over the last couple of years as I had a few potentially-serious things that needed one-time attention, and that were all resolved well.
Great discussion, but very focused on one vector (ie. whether to choose a medigap or Advantage plan). There’s another important consideration that the buyer needs to be aware of when selecting a policy. That’s whether the policy being considered is “Community-Rated”, “Issue-Age-Rated”, or “Attained-Age-Rated”. Just make sure you know what you’re buying, and how the costs will change as you age. For example, a Plan G policy at 65 that’s Issue-Age-Rated will probably be relatively inexpensive at 65, but may be cost prohibitive at 90, especially if the surviving spouse may be trying to live on a reduced household social security income due to the loss of a spouse. I suspect most readers of HD are well aware of this, but thought I’d mention it just to be safe.
Oops. Just noticed I mistakedly said “…at 65 that’s Issue-Age-Rated will probably be relatively inexpensive at 65, but may be cost prohibitive at 90…” when it should read “Attained-Age-Rated”. Ugh; sorry about that.
Excellent point. This is something that’s seldom discussed, even in most Medicare themed articles. And I doubt many agents bring it up, either.
One point to mention is you have to sign up for Medicare at 65 even if you don’t plan on using it. If you don’t, you will pay a 10% cumulative penalty per year if you even try and sign up at a later age. Don’t think that an employer provided better coverage is always going go be offered in the future. My faterin law is paying steep penalties for not signing up at age 65. He had 100% medical coverage as part of his retirement and did not sign up at 65. His 100% coverage went away at age 85 and he’s paying 20 years of penalties now for Medicare coverage.
Thanks for this, Scott. Another vote here for traditional Medicare + Plan G supplement + Plan D drug coverage. Having gone through a tedious round of required pre-approvals when my wife had surgery a few years ago (pre-Medicare), I never want to do that again.
Additionally, it’s always worthwhile to compare drug prices between your Plan D and GoodRx. Recently I had a prescription which would’ve been $65 using my Plan D, but was $13 with GoodRx.
I did not see the role of Health Savings Accounts (HSAs) mentioned in any of the comments. Count me in the camp of Traditional Medicare. Since I have an HSA, I am able to subscribe to a Plan F High Deductible policy for my Medicare Supplement. This has the lowest monthly premiums of any of the supplement options. I use my HSA to pay the deductible on the Plan F policy plus any other costs that arise. I wish the government did more to promote the use of HSAs for seniors – they have been a godsend for me and my wife.
My understanding of the rules to be eligible to contribute to an HSA after having any Medicare coverage are different from yours. My understanding of high deductible Medigap policies is that they simply lower that insurance premium and do not make you eligible to make a HSA contribution after you have any Medicare coverage (Part A or B). With a HD Medigap plan you are choosing to assume potential additional medical expense risk for a lower premium.
See – https://www.medicareinteractive.org/get-answers/coordinating-medicare-with-other-types-of-insurance/job-based-insurance-and-medicare/health-savings-accounts-hsas-and-medicare
“If you enroll in Medicare Part A and/or B, you can no longer contribute pre-tax dollars to your HSA.”
I recommend you review IRS Publication 969 and discuss your coverage and ability to contribute to a HSA with your Medigap provider. Unfortunately, if you have made HSA contributions when not eligible it is likely you will need to amend tax returns and take action to remove any ineligible contributions from your HSA.
I believe it’s better to fix now than wait for the IRS notice that I would expect may be coming in a couple of years.
William, I am sorry if I gave the impression that I was advocating HSA contributions – as you and others have pointed out, HSA contributions are not allowed once someone joins the Medicare program. My wife and I each contributed to HSAs during our working years and use the HSAs to bridge the larger gap that a Plan F High Deductible policy requires. By doing this, we are able to benefit from the lower premiums associated with a Plan F High Deductible policy, compared with other of the “alphabet soup” policies. In addition, as wtfwjtd points out, we pay our Medicare premiums (but not the Plan F High deductible premium) from our HSA. In sum, my only point is that if one was able to contribute to an HSA prior to Medicare, then the HSA can be used quite profitably in concert with a Plan F High Deductible medigap policy.
Thanks for your clarifying information Edward. I also participated in a HDHP and contributed the maximum allowable HSA annual amounts to those separate accounts for my wife and me from the time the 2003 Medicare Modernization Act created health savings accounts (HSAs) until I was no longer eligible when my Part A Medicare began (automatic & mandatory 6 month retroactive date before my Part B coverage began). In my pre-retiremnent career as a CPA working in the tax area I am aware how critical a complete understanding of HSA tax rules are to avoid unwelcome surprises.
Like you, I also used our accumulated HSA balances to pay for OOP medical expenses and for my HSA eligible Medicare premiums and my wife’s COBRA premiums when my group coverage ended. My experience has been that I fully depleted all of our accumulated HSA funds within four years after my Medicare coverage began.
I remain a big fan of contributing the maximum HSA contribution when eligible for a HDHP and have encouraged my adult children with their own HDHP coverage to do the same.
When the Secure 2.0 bill was first proposed an initial provision would have allowed those with Medicare coverage to contribute to an HSA but would have changed the rules to disallow an HSA from reimbursing for Medicare premiums. Neither of those provisions made the final SECURE 2.0 Act as enacted.
See – https://www.benefitspro.com/2022/06/21/a-current-house-bill-could-affect-hsas-and-medicare-beneficiaries/?slreturn=20230501084934
Proposed changes to Medicare and HSA rules (did NOT become law)
If the new changes are passed, eligible beneficiaries could enroll in Medicare and continue making HSA contributions. For some, this is fantastic news. Unfortunately, beneficiaries that rely on their HSA funds to pay their Medicare premiums would lose the ability to do so.
My point being is that tax laws can and do change and we need to stay informed of both current laws and rules and proposed changes to make the best informed financial decisions for ourself and those that we love.
My sole regret regarding our HSA’s is paying OOP expenses before my Medicare eligibility using those HSA funds. My choice means I missed out on over a decade of tax free investment gains.
I took Edward’s comment to mean he pays for the Plan F deductible with existing HSA savings. He never mentioned that he continues to contribute to the HSA.
He can also pay for Part B premiums (but NOT Medigap premiums) his existing HSA money. And yes, once on Medicare, contributions to an HSA are done.
I hope that is the case.
It seems wrong that because poorer retirees like me feel compelled to choose an Advantage plan, our health care will be less comprehensive, and we will end up facing big medical bills we can’t afford at some point. My friends in the U.K. are often surprised at the inequities of health care in the U.S.
Every time I read about Medicare I roll my eyes and think to myself could they make it any more complicated? So I appreciate the clarity you used to make your case, Scott. Thank you for this.
For the last couple of years I’ve started educating myself on all these different plans in anticipation of having to sign up for one in about a year and a half from now. Currently using ACA for coverage for wife and me, which has been surprisingly affordable.
I guess we will see what we will see.
I agree with Scott’s conclusion. And don’t automatically choose United Healthcare just because AARP puts their name on its advertising. United Healthcare reportedly pays AARP $500 million a year for the endorsement. In California (maybe your state also) the Department of Insurance publishes a list of the pricing for every carrier in the state. That’s how I learned that USAA may only be for veterans for other insurance, but it is available to everyone for Medigap coverage. I assume their price is so low because they don’t advertise their Medigap coverage, don’t pay for endorsement, and don’t use outside brokers that have to be paid a commission.
Using a broker does nothing to increase your cost of healthcare unless you fail to do your own research and blindly choose what is put in front of you. Brokers, at least ours, can be a wealth of knowledge that is challenging for some people to find on their own. In my husband’s case, the cost for USAA’s Plan G was $30/mo. more than the AARP/UHC plan G. Not everything USAA offers is necessarily less expensive than their competition.
How much do they charge for Medigap coverage?
You can get a quote for your ZIP code and age at https://www.usaa.com/inet/wc/insurance-medicare-supplement-medigap .
USAA Medigap Plan G for 68 YO male in NC is $30 / mo. higher than Mutual of Omaha Plan G.
It depends on where you live, your age, and possibly other factors.
Thanks so much for the article Scott! Extremely helpful as I am turning 65 in Nov and have been totally confused with the complexity of dealing with insurance – so much so I figured it may be easier to get a job and continue to work – all because of insurance. Based on this article, I plan to go with your recommendation as well. One question I did have is I am on 3 tier 1 drugs and 1 tier 5/6 drug – how do these play into this decision? Additionally what are your plans for Dental and Vision?
-Duke
Use the tools on medicare.gov to compare Part D plans. You can enter all of your specific drugs and get a precise price comparison between plans. Part D plans tend to change the most from year to year, so it’s a good idea to repeat this process annually and not just renew your plan from the previous year without re-running the numbers.
We (wife and I) have Wellcare Wellness RX, PDP Value Script. The premium went down to $8.60 a month this year. We don’t have a lot of meds or expensive meds either.
Thanks Duke. Good questions. I am in the process of deciding on Part D plans and it is frustrating. I take generic medications and have found that it will be cheaper to pay cash for my medications using GoodRx.com than any of the Part D plans. However, I will sign up for a Part D plan to have just in case. My supplement plan offers discounted annual eye exams at certain offices (not my optometrist) in my area as well as a discounted gym membership. I plan to pay out-of-pocket for dental and vision.
We (wife and I) have Wellcare Wellness RX, PDP Value Script. The premium went down to $8.60 a month this year. We don’t have a lot of meds or expensive meds either.
I have an article on Part D coming out soon, but the short answer is that you need to compare plans at medicare.gov. Your Tier 1 drugs should be cheap, your Tier 5 will be probably be expensive and may require prior authorization. However, starting next year you will not have co-pays once you reach “catastrophic coverage” which I have been reaching in March each year. Dental coverage tends to be expensive and minimal, but I have been happy with vision coverage from VSP.
The tricky thing with having to make this decision at age 65, is that generally you are healthier then than at age 75 when you are likely to need more health care services.
Just my opinion, but N or G are superior to any MA . When I reached 65 we choose Plan F, an option no longer available, which covered all Medicare deductibles and co-pays and provided some coverage if you chanced into a doctor who was charging more than the Medicare schedule allowed.
When Plan F was blocked to new customers a few years ago we switched to G. The only difference is that we had to pay the annual Part B deductible. The reduction in the premium level was greater than the cost of the deductible.
At age 65, the only doctor I visited was my primary care giver. Now 12 years later, I routinely see at least 3 specialists in addition the the primary care person. And, in the last 5 months, I have had to make several trips to the ER when on the weekend I needed care that wasn’t avail otherwise.
In my state the difference between N and G is $30 a month. I am happy to pay this small difference as it reduces the complexity of dealing with medical billing. I only need to pay the Part B deductible.
If your finances are such that $30 a month is significant, by all means choose N if it is available. If you are comfortable financially, choose G. Your life will be simpler.
“I feel guilty that my recommendation added to her medical debt.” That is a tough one and I wish we could avoid putting physicians in that position.
I was in the property and casualty insurance business, and I noticed that people didn’t really read or check their homeowners’ policies until the wind started to blow or they had a claim. I totally understand that it’s more fun going to the ballgame than reading your insurance policies but when you have to choose between enjoyment and security I will go with security every time.
I read a lot of articles and several books about Medicare before signing up. It was confusing but I knew Advantage plans were not the way to go when I saw Jimmy “JJ” Walker (70s TV actor) touting them. I went with standard Medicare and Plan F (which is no longer available).
Then I came down with Covid and ended up in the hospital for 8 days and months of recovery on oxygen at home. I kept waiting for at least a few bills to come in, but they never did. Just statements from the insurance company showing what they paid.
It still might have been cheaper to go with another plan but when you’re down with something like Covid it’s nice not to have to fritz with medical bills.
As a general rule, I avoid most “celebrity” endorsed products and this has served me well thus far.
My experience with Medicare Advantage is the opposite of everything you said.
Who offers free MA? I have always paid monthly premiums for mine.
The private group MA plan offered by my former employer has no premiums and a $750 OOP max, but I doubt those benefits will last. Plans offered on the open market are more likely to charge premiums.
One of these days your former employer will decide as many others have to simply give you a payment and require you to buy your own MA or Medigap. That’s what mine did two years ago. It’s not a bad deal except a big loss of Rx benefits which is the main savings for employers. The longer term issue is the employer payment increases at a slower rate than premiums or sometimes not at all, thus ongoing cost shifting to the retiree.
As I explained in my article on Medicare, my employer was giving me $3,000/year which I was using to buy Medigap Plan G and dental and vision coverage. The MA plan is a replacement for the stipend. I was happier with the stipend and since I fail medical underwriting I will go back to Original Medicare before the end of the year, but it will cost me.
Some there is no monthly premium, some give a portion of the Part B premium back.
As a very satisfied Medicare client, I usually refer to Advantage plans as Medicare for poor people. Like the insurance commercials say, it’s the easiest decision in the history of decision making. The only reason to go Advantage is if you are too broke to afford good coverage.
What do you mean by good coverage? Most employer plans for health benefits operate just as MA plans do. The problem with our “good” coverage is it’s not fully funded or not affordable to make it so because we don’t want to pay more.
Very good article Scott, but surprised you chose Plan N. I can understand why you chose it as there is a wide variance in the premium between Plan N and Plan G, especially if your health is good. BUT a major illness can come out of the blue and the one thing we need, as we age, is good, comprehensive health insurance.
in my healthier days I considered Plan N but so glad I opted for Plan G and thankful I can afford it.
Although each lettered policies have standardized benefits I also asked my doctor’s office what plan provider they had the fewest problems with. While they were careful to say they couldn’t recommend any one provider, they did say xyz (each state is different) were very good about claims and payment. Something to consider.
Marjorie, thanks for your comments. I agree with you regarding the need for comprehensive health insurance as we age. I debated between Plan N vs Plan G for some time. Based on my research the only difference between the two is that you pay up to $20 per office visit and up to $50 per emergency room visit for Plan N. If you end up admitted to the hospital the $50 is rescinded. If someone goes to the doctor frequently this may not be a feasible option with the co-pays.
Plan N does have the Part B “excess charge” which means a health care provider can charge more than the Medicare approved amount. This is the excess charge. However, based on my research most health care providers have agreed to accept the Medicare-approved amount for services, so this means they can’t bill for excess charges. The monthly cost for Plan N was between $30 and $40 less ($360 to $480 per year) than Plan G for me.
Depends on the number of office visits each year I guess. But Plan N doesn’t cover Part B deductible so that could be half your savings.
Since neither N nor G cover the Part B deductible, the only differences are co-pay and excess charges. Many providers don’t charge excess charges, and some states ban excess charges. $20 co-pay might not apply to preventative care. The last time I checked, Blue Cross in New Jersey had $60 / mo. lower premium for Plan N vs G for 67 YO female.
Yes. I chose N because I do not have many office visits, thus pay less annually
Office visit co-pays can add up if you have a chronic disease or become seriously sick. Also, the PCP I had been going to for decades before I signed up for Medicare belonged to a large practice that did not accept assignment. If you can afford the premiums and opt for Original Medicare I can see no reason to go for N rather than G. I would also point out that most people cannot switch plans without medical underwriting.
Kathy…you are so right. If I’d had to pay co pays for the myriad tests and procedures I’ve had, I’d be in debtors prison right now!
Nice discussion. You came to the same conclusion I did when I turned 65 last year. I’ve heard too many stories from friends and family about Advantage plans making it difficult to get care on a timely basis. If you can afford a supplement, that is the way to go. If you truly cannot afford a supplement, an Advantage plan is better than nothing.
Note that I found a supplement that offered gym membership through SilverSneakers. It cost a little more than the same plan without the gym membership, but it was still less expensive than paying the gym directly.
Thanks #DGD
and if you choose MA and learn in a few years what the downsides are, you cannot go back to Medicare and choose the supplement you want without possibly being denied. If you sign up for the supplement at age 65, they have to take you no matter what.
It depends on the state where you live. There are four guarantee issue states (my state, Mass. is one of them) where they can’t deny you a Medigap plan if you want to switch from MA. But you point out a big disadvantage that people only discover when their health declines and they want to switch from MA to original Medicare.
Yes, MA and Medigap plans are state regulated as insurers in addition to federal regulations so there are variables by state. States can make plans more, but not less generous than federal requirements.
Also, Medigap plans generally don’t go with you if you permanently relocate to another state.
Good point about Medigap and relocating , though for now I am ok because I am in a group plan through my employer and they cover you if you move .( of course someday they might drop or change retiree coverage).
Ah, so you can change from an advantage plan, and still get a medigap plan without underwriting–you just have to live or be willing to move first to one of four states! It’s nice to know….
Good point, changes after the initial choice do have limitations and possibly higher costs.
Your are trying to hard to be fair. There’s a simple way to diagnose the difference between traditional Medicare and Advantage plans. Behind Advantage are companies who only are there to make a profit. If you know that your golden years will be completely healthy and then you will just drop dead one day, Advantage is to your advantage. Otherewise, not so much. Who among us knows that for sure.
That’s not really fair. They certainly want a profit, but provide a service and if they become too aggressive regarding claims they won’t be competitive. After all, doctors and hospitals are looking to make a profit too. Should we say they all provide too much unnecessary health care?
Actually, Mr Quinn, in my experience it is quite fair. In fact, it is in their best interest to only insure healthy people, so if you get sick, they would prefer you just go away anyway :-). When customers do this, they call it “adverse selection.” But when companies do it, they call it “medicare advantage.”*
And if they can’t get you to go away, then, yes, MA providers definitely have and do engage in “upcoding” to shaft the government for placing them in such a challenging situation.
*It’s now been 18 months since Aetna refused to cover my MRI (at their preferred and inferior provider, which only caught one of the two nodules a better provider found a month later) that identified my cancer. My appeal? I have not even received a hint of acknowledgment it exists in the months since. Fortunately that money was a small educational cost to learn what Scott Martin has politely explained in the six month window when I still had guaranteed issue of traditional medicare with a medigap policy.
Sure there are occasions where there are screwups, but if that was the norm they would out of business. Keep in mind it is not their “inferior provider” as you say and that provider is giving care to many people totally unrelated to your or any MA plan. I bet other patients think he is great.
Dick, can you recommend a straightforward source or two for someone still a handful of years out but needing to become better educated about Medicare options? Also, is Medigap plan G still your recommendation for most people if extensive international travel is not a big part of one’s retirement plan?
I found Philip Moeller’s (PBS contributor) book Get What’s Yours for Medicare: Maximize Your Coverage, Minimize Your Costs was useful in my Medicare decision. The book was published in 2016 so parts could be a little dated but his thinking on the decision factors make the current $10 Kindle cost worthwhile.
I don’t understand your comment about travel. The coverage provided by any Medigap plan for international travel is minimal. There is a lifetime max of $50,000 and 20% co-pays. Since you need medical evacuation/repatriation coverage in any case, you might as well buy additional medical coverage at the same time. As you get older it can become difficult to get medical coverage for travel and I would recommend saving the Medigap coverage for that situation.
Also, “Medicare for Dummies”, although the current edition is somewhat out of date and should be checked against medicare.gov.
Thanks to all for the information..
Charlie, check out the table at https://www.medicare.gov/health-drug-plans/medigap/basics/compare-plan-benefits#triple-asterisk. It details the differences between the Medigap plans. Plan N is similar to Plan G except that you pay $20 per office visit and $50 per emergency room visit. However, if you are admitted to the hospital the $50 is rescinded. Because of these co-pays the monthly cost for Plan N is less than for Plan G.
My monthly cost for Plan N is $92.99, but if I had gone with Plan G the monthly cost was going to be between $30 to $40 more.
You can get estimates for all of this at Medicare.gov when you enter your age and zip code.
Medicare for Dummies by Patricia Barry. I believe a new edition coming out later this year
Medicare.gov has very good explanations of the alternative plans.
I would stick with Plan G, but you really need to look at premium differences and potential out of pocket costs in your area.
In my area, there is also a Plan G high deductible available. The difference is that I pay the copay for the first $2700 or so while saving about $1350 or so less each year. In other words, I’m self-insuring for the first dollars of copay, betting that on average I don’t have high expenses half the years I’m paying the premiums. (Since the $2700 is generally 20% copays, that represents $13,500 in medical bills, so either a lot of medical services or a surgery.)
Most private insurance company plans (in this case Medicare Advantage plans) have an incentive to make it repetitive, difficult, and frustrating to file claims, thus hoping you’ll give up and then they won’t have to pay. Unfortunately, this is, or at least has become, the American way.
Your personal experience is consistent with everything I have read about Medicare (and mirrors the experience of my elderly parents). If you are healthy, Medicare Advantage is great; if you are not healthy, you realize (perhaps too late) the sham that it is.
denied claims, delays in approval get the headlines, but what doesn’t are the overwhelming majority of claims that are quickly and immediately paid. And keep in mind there is a great deal of unnecessary (perhaps risky) health care that is provided.
Very accurate analysis.
Nearly half of Medicare beneficiaries are enrolled in MA lured by extensive advertising and the idea of no premiums, and added benefits some of which may never be used.
Ironically, MA plans operate in a way that causes the most complaints from non- Medicare Americans with their health insurance, that is, limited networks, pre authorization and claim scrutiny and deductibles and co-pays.
Medicare traditional coverage as you note is easier to deal with for providers because there is minimum claim oversite for which CMS has been criticized by auditors and perhaps a factor in $100 billion a year in Medicare fraud – often undetected for many years.
My wife and I have been enrolled in traditional Medicare for 13 years and never have paid more than the Part B deductible because of supplemental coverage while incurring hundreds of thousands in medical costs.
For most people Medigap Plan G is the way to go. It does not cover the Part B deductible which is modest, but it does cover international emergency care for those with plans to travel.
Joining a MA plan is like taking your employers highest deductible plan with the lowest premium and then needing health care most desirable in an out of network setting and incurring higher deductibles, larger co-insurance and perhaps very limited coverage. It is a gamble that may turn out to be pay now or pay later.
The real problem for most people is selecting Part D or considering the MA drug benefits. There are so many variables, the riskiest being not only what drugs you take, but drugs you may take after enrolling for which the brand may not be on the formulary or the type of drug may mean very large out of pocket costs.
Nicely said, Mr Quinn. One good thing about the plan D’s is that I can pick a new one each year when I re-enroll. However, they are all offered by private insurers and they all have limits. The very ability to pick again each year no doubt contributes to the situation you describe from the perspective of the insurers. If they offer something especially good for sick people, more sick people will find them every year!
“Good” news for Part D: Beginning in 2025, Part D enrollees’ out-of-pocket drug costs will be capped at $2,000 (and indexed to rise after 2025). That will make it less important for some to choose the optimal plan.