WHAT YOU SHOULD KNOW BEFORE CHOOSING A MEDICARE PLAN
When choosing their Medicare plan, most Seniors fail to consider the major differences in these plans leaving themselves exposed to potentially thousands of dollars in unnecessary medical expenses. For the most part most of the Medicare Supplement plans offered by different insurance companies have identical benefits. These plans are identified by a letter A-J and the most popular (F & J) cover almost everything that Medicare does not. These plans offer the greatest flexibility in regards to choice of Doctor and Hospitals. These plans DO NOT contain the Part D drug coverage, so you need to add a RX plan to cover your prescription drugs, which will add additional monthly costs. The differences between company offerings of “med supps” are usually found in the monthly premiums and those are based on age and county of residence. The typical cost for a Medicare Supplement is about $140-$270 per month depending on age then you’ll need to add on your Part D RX plan which could range from $20-$60 more per month.
In contrast, the differences between Medicare Advantage plans offered by different companies may appear subtle initially. However, upon further evaluation, you will find dramatic differences that could be very costly. Most Medicare Advantage plans have a $0 monthly premium which has made them very attractive and popular. However, you give up the flexibility of a Medicare Supplement because most Medicare Advantage plans are HMOs. So you will need to choose a primary care Physician and will need to be referred to a Specialist within the plan network.
Most Seniors, especially those new to Medicare, when evaluating Medicare Advantage plans, typically look first at co-pays for Doctor’s visits, Hospital Charges and generic RX drugs. This is a mistake because those costs are minor compared to the four critical areas that can rack up thousands of dollars in medical expenses. Furthermore, those benefits are usually at the top of the “explanation of benefits” because it’s what the insurance company wants you to focus on! The four critical areas in these plans that can be far more costly to you then Doctor visits or Hospital charges are: skilled nursing facility, diagnostic/treatment radiation, durable medical equipment and RX formularies. These areas can not only be costly but there is typically no “out of pocket maximums” to protect you. Here a few tips when evaluating a Medicare Advantage plan:
- Look at the daily co-pay for Skilled Nursing Facility beyond the 20th day. The difference between plans can be as much as $125 per day and these costs could mount up quickly.
- Look for co-pays versus percentage of cost for Radiation Diagnostic/Treatment benefit (chemotherapy and radiation) for Cancer. There is a HUGE difference between a $20 co-pay and 20% of costs.
- Look for the lowest percentage for Durable Medical Equipment. These items can be VERY expensive and a 10% difference could save you thousands of dollars.
- Check each of your medications on the plan formulary. Each company rates or tiers each drug differently and this potentially could cost you hundreds more dollars each month. Also look for the highest initial threshold before you enter the GAP or so called “doughnut hole”.
These are just a few ideas that could save you from making a costly mistake by choosing the wrong health plan. Make sure you and your agent take these points into consideration when evaluating your health plan.