Medicare Supplement or Medicare Advantage Plans: What is Not Obvious From What You Receive in the Mail

You only need a few minutes to decide between a Medicare Advantage and a Medicare supplement plan.

You must be eligible for Parts A and B of Medicare. Usually Social Security sends you a letter about Medicare a few months before your 65th birthday and Medicare starts on the first day of the month when you turn 65.

MEDICARE

Medicare Part A usually costs nothing and covers the hospital. Medicare Part B costs about $104 a month (costs nothing for low income people or costs more for high incomes).

Medicare Part D (prescription drugs) is optional and usually costs from $15 to $30 a month. While Part D is optional, the government penalizes you for not enrolling in the initial eligibility period unless you already are in another prescription plan that they say is "creditable".

MEDICARE SUPPLEMENTS AND MEDICARE ADVANTAGE PLANS

Medicare Advantage Plans cost from $0 to $50 per month. Medicare supplements usually cost from $55 to $150 per month. Advantage plans require you to see doctors on a list and get medical care in your county. There are copayments i Medicare Advantage plans and these can be sizeable especially for hospital care.

With Plan "F" Medicare supplement and certain other supplements there are no copayments and hospital is covered 100%. You can go to any doctor in all states if he/she accepts Medicare. You can also go to any hospital you and the doctor agree on. If you can afford it the supplements offer better choices. Also, you won't face the annual open enrollment period from October 15 to December 7 each year when Medicare Advantage plans tell you if they are going to renew coverage in your county or zip code. You mean they can pull out of your county and dump you?? Yes! And it is quite common.

MORE CONTRASTS BETWEEN MEDICARE ADVANTAGE AND MEDICARE SUPPLEMENTS

If you obtain a Medicare Advantage plan upon turning 65 you may find yourself locked into the Advantage plan for a long time unless the government changes the rules for exiting such plans.

One may become locked into a Medicare Advantage plan upon discovering they unable to pass health questions to enter into a Medicare Supplement. Also, it is not the patient, but the government determining when one can enter or exit any Medicare Advantage plan. Entering and exiting is usually during the last quarter of the year though there are exceptions for low income and certain chronic health conditions. Entering and exiting in 2012 and 2013 was from October 15 to December 7.

Many people believe that have a Medicare supplement plan, when what they really have is a Medicare Advantage plan, which pays instead of Medicare.

Medicare touts itself as being an 80% plan, but statistics show that Medicare itself only pays on average 67% of medical bills. This is why people get supplements or enroll in a Medicare Advantage plans, to pick up the difference that Medicare does not pay.

DIFFERENCES between Medicare Advantage plans and Medicare Supplement plans

DOCTOR CHOICE:

"Advantage" plans use doctors and hospitals on a provider list.The majority of Medicare Supplements do not use a list because any Medicare doctor in any of the 50 states typically accepts Medicare supplements. There are no claims forms with either Medicare supplements or Medicare advantage plans as billing is direct.

PLAN DESIGN

Congress standardized all Medicare Supplements so for example, a Plan "F" from one company is the same as a Plan "F" from any other company, as only the prices are different. Plan F is the top of the line and picks up 100% of the Medicare covered items that Medicare does not pay. If Medicare approves the claim then the supplement picks up the difference.

Medicare Advantage plan designs must be approved by Medicare every year and these contracts are made by zip code or by county. So a Medicare Advantage plan in one county is NOT necessarily the same plan in the next county even though they may be from the same Medicare Advantage company.

PREVENTIVE CARE

Preventive care is covered at 100% on either a Medicare Advantage or a Medicare supplement plan, including physicals, immunizations, colorectal exams, bone scans, diagnostic x-ray and lab.and more.

OUT-OF-POCKET POTENTIAL

A Medicare supplement Plan "F" picks up all of what Medicare does not cover on medical.
A Medicare supplement Plan "G" picks up all except Medicare's deductible, currently around $150. A Medicare supplement Plan "N' out-of-pocket is the approximate $150 deductible plus $20 per doctor visit.

A Medicare Advantage "out-of-pocket maximum" is commonly around $5000, although some are much higher, and $4900 or $6700 are not unusual maximum out-of-pockets.

PREMIUMS

PRESCRIPTIONS:

Supplements do not include prescriptions, but most Medicare Advantage plans do. Supplements require a separate PART D which usually costs from $15 to $60 a month while the average is probably around $30-$40.

MEDICARE SUPPLEMENT PLANS-other info

These plans offer the consumer and their doctor control of their health care. Visit www.healthgrades.com for help on finding a great doctor. Just punch in any zip code and select a cardiologist or general practitioner, or other specialist and the software will show a list of doctors that are "graded" by other consumers.

Not all companies offer all plans in all states. Common supplement plans that are offered are: A,B,C,F, G, M,and N, and high deductible F.

Plans M or N are nice premium saving plans and are usually 20% to 25% less per month than the Plan F. When a PLAN F costs $127 a month, plans M and N might cost $100 a month.

People ask what the supplements cover--the - ANSWER: if it's covered by Medicare, it's covered by the supplement! Medicare does all the claims evaluations. A Medicare insurance supplement just picks up the difference. A separate prescription plan is needed when one has a supplement.

By the way---a prescription plan is NOT required when someone obtains a supplement. However the United States government will penalize someone 30 cents per month for signing up late. Example: someone signs up 10 months late means they will pay 30 cents x 10 months=$3 a month more than anybody else pays for the same plan for the rest of their LIFE. Ouch.

EMPLOYER PLAN OR PRIVATE PLAN?

Often, people cannot believe how much money they will save having their own plan instead of a previous employer plan. The reason is that if one stays on an employer plan they are not benefitting from the years of Medicare premiums they paid. It is not uncommon to save as much as $700 a month.

If one goes to human resources to discuss Medicare Supplements or Medicare Advantage plans, they will tell anyone not to switch. They will say one can never get the previous employer plan back again. Usually that is no great loss although the HR person does not want to be fired and the only plan he/she is familiar with is the company plan. That's why they will never say to switch. The fact is, many people are better off with their own plan from both cost and benefit perspectives than the company plan.

To find PART D plans in your zip listed by lowest to highest cost go to www.Medicare.gov.

To find Medicare Advantage plans in your zip with premiums and prescription copayments go to www.Medicare.gov.

Now that you know the difference between a Medicare Advantage plan and Medicare supplements here are a few more details:

One can switch from Medicare Advantage to Medicare Advantage, between October 15 and December 7 in 2013. People who just acquired Medicare Part B or those with a chronic condition like diabetes, heart, or pulmonary problems, or those who are low income can switch anytime of the year as long as there is a special needs plan in their zip code.

One can switch from Medicare supplement to Medicare supplement anytime during the year as long as one can pass health questions.

There you have it. You really can't make too much of a mistake in choosing between a Medicare supplement and a Medicare Advantage plan. . The system is pretty good. Good Luck!

Copyright 2013