Let’s Explore!
When I begin working with a client, we start with Medicare 101: a review of the parts of Medicare, what each part covers, and what options they have.
Basically, there are 2 options:
1) Keep Original Medicare as your primary network (access to any provider in the US who accepts Medicare; approximately 96% of providers nationwide) and add a MediGap Plan & a Prescription Drug Plan.
2) Bundle your Medical and Prescription coverage together under a Health Insurance plan that functions much like the health insurance you’ve always had. The Insurance company you choose manages your access to care and treatment. This is an Advantage Plan.
These are the considerations:
Monthly Premium
Most Advantage plans have options for low or no premium plans. Advantage Plans include a cap on your out-of-pocket expenses, which original Medicare does not. They may also include some or all of these extras: Dental, Eyewear, Hearing Aid, and OTC (Over The Counter) spending allowances. This option features a low monthly premium with copayments for services as you use them.
Adding a MediGap (aka Medicare Supplement Plan) and PDP (Prescription Drug Plan) to your Original Medicare may cost in excess of $400 per month. Doing so ensures you will have minimal additional costs for medical care.
Access To Providers
If you choose an Advantage Plan, consider: what if you were diagnosed with a serious illness? Would you want to travel to see the renowned specialists, or would you want to find skilled providers near you to treat you? With an Advantage Plan, you’re best served by staying in the plan’s network. Even if you have a Preferred Provider Organization (PPO), which allows you to go out of network, your costs will be higher if you do.
Access To Care & Treatment
Having an Advantage Plan means that if your medical professional suggests a procedure to address a problem that you are having, they have to request “prior authorization” from your plan. Commonly, your procedures and needs are authorized, but sometimes they are not. These denials are what make headlines, & rightly so. Medicare rates Advantage Plans using a 5-star system. You can expect that the higher the star rating, the easier it will be for you to get the care that you need. Original Medicare does not currently require prior authorization for procedures ordered by your doctor.
Prevention
One difference between Original Medicare & an Advantage Plan is that the Advantage Plans focus on maintaining your good health. They encourage you to schedule your annual checkup & preventive screenings. They offer incentives for you to complete these screenings. Catching something early is often the difference between a positive or negative outcome. Advantage Plans have the edge here.
Risk
Advantage Plans have a government-mandated Maximum Out-Of-Pocket (MOOP), that an Advantage Plan must include to protect you from catastrophic medical expenses. Currently, the most you could be responsible for in a calendar year for in-network care is $9250 (or, if your plan allows out-of-network care, the MOOP is $13,900).
If you select the highest level of coverage MediGap plan to wrap around Original Medicare you will pay over $4000 in premiums a year (depending where you live), plus a small medical deductible & a PDP premium. In this model, your cost is all upfront.
Both Advantage Plans & Prescription Drug Plans have copays for prescriptions. Your costs may vary depending on the plan you select.
In New York
Often the admonition to stay away from an Advantage Plan comes from a friend or family member who lives in a different state. In NY, when you are new to Medicare, you are guaranteed to be issued a Medicare plan even if you have preexisting conditions. In NY, you can move back & forth between Original Medicare and an Advantage Plan at least once annually, with the possibility of other SEP’s (Special Enrollment Periods) during the year.
What To Pick?
As you can see, the reasons for making one of these choices will vary based on many factors. Consider what matters most to you:
What can you predict about your healthcare needs?
How much can you afford to pay in monthly premiums?
How important is it to you to be able to see any doctor, anywhere?
How much financial risk can you tolerate?
How important is the feeling of security you may get from paying more upfront to know that you have broad access to care?
I collaborate with my clients to select what makes the most sense for them. Approximately 2/3rds of them choose an Advantage Plan.
