The question that I am constantly asked during the course of a consultation on Medicare is ‘which is the best plan?’ My answer to the question of the best Medicare supplement is always the same. It all depends. Each person is different. Needs are different. Perception of reality is different. If you ask my wife, which is better—two piece or one piece swim suit? Her opinion will differ greatly from mine.
When it comes to Medicare, the first fork in the road is a choice between Medicare Advantage or Original Medicare and a supplement. Once someone makes that first choice, the second fork in the road is between Medicare supplements. There are potentially ten possibilities—Plan A—N.
Plan F has been the most popular plan among the bunch. Because of that, some would say that Plan F is the best Medicare supplement, even though it is the most expensive. Its appeal, however, is convenience and a sense of security. With a Medicare Supplement Plan F, there are no co-pays, deductibles, or co-insurance. You don’t have to worry about maximum out of pocket expense. You plop down your red, white, and blue Medicare card, your Plan F card, and you’re done. The bills may make Medicare and the insurance company cringe, but no matter. You are covered 100% for the services that Medicare covers. For that sense of complete, comprehensive coverage and convenience of payment, Plan F’s are the most expensive among the various insurance companies.
Plan F’s are expense for other reasons as well. As medical expenses go up, so do Medicare supplement premiums. You can almost count on an annual rate increase from the insurance company, especially for a Plan F. Why is that? Because people on Plan F use their benefits frequently. Whether they go to the doctor no times or fifty times a year, the price is still the same. Whether they go to the hospital zero times or a hundred times, the price is still the same. No co-pays. Just the same monthly premium. Consequently member over-use increases cost, which is reflected in regular rate increases.
Plan G, however, has a small deductible. You pay the first $147 on Part B expenses, such as doctors’ visits, outpatient procedures, emergency room visits, etc. After you pay the first $147, then the Plan G is like a Plan F. Everything is covered. The two benefits of a Plan G are 1) the premium for Plan G’s is lower, even with the deductible factored in, 2) the rate increases are smaller and less frequent. Plan G people tend to not over use their benefits as much as Plan F folks. A great deal is being written on this Plan G topic right now. It is very arguable that Plan G is the best Medicare supplement.
Which is the best? It all depends on you. I tell my wife I would rather see her in a two piece bikini. That is the best for me, and that is final!
Medicare can be a confusing topic to navigate, especially for those who have not had any experience with it yet. From wondering what ACA implications have to do with Medicare, if anything, to learning the different components of Medicare coverage, it’s easy to make mistakes. Unfortunately, Medicare mistakes can be very costly and time consuming!
Perhaps the worst assumption people make about Medicare is that they don’t qualify for it, because they haven’t worked long enough. The fact is that if you’ve earned 40 credits through payroll taxes at work (about 10 year’s worth of work), you won’t have to pay premiums for Part A services, which mainly covers hospital insurance. You actually don’t need any work credits to qualify for Part B, which covers doctor’s services, outpatient care, and medical equipment.
What are some other common mistakes? Here’s a brief rundown.
Failing to Enroll in Part B on Time
Were you aware that if you don’t enroll in Part B when you’re supposed to, you could actually incur penalty costs? Let’s say you have health coverage beyond the age of 65 from an employer for whom you or your spouse actively works. If that employer has 20+ staff, you can delay part B enrollment without having to pay the penalty. But if this is not the case, you’ll need to sign up during your seven-month initial enrollment period.
Assuming Retiree Healthcare Coverage Replaces Medicare Part B
In many plans, Medicare is actually automatically your primary coverage if you have a retiree plan. Many people don’t realize this, and that they have to enroll in part B otherwise they may be stuck with no coverage at all when they retire.
Not Understanding Full Retirement Age
Retirement age for most individuals is not 66 years of age. However, to avoid late penalties you must sign up for Medicare when you turn 65, unless you have health coverage from your own or your spouse’s current employment.
This is just a brief overview of the common mistakes people make in regards to Medicare coverage. A few others include; assuming you don’t need Part D coverage because you don’t take prescription drugs, choosing a Part D drug plan based solely on the premium or the fact that someone you know uses it, or simply misunderstanding enrollment periods.
The fact of the matter is, if you or your working spouse are approaching retirement or retirement age, it’s time to start exploring what your options are. The licensed insurance agents at Omaha Insurance Solutionsare here to answer any of your questions you may have about Original Medicare, an Omaha Medicare Advantage Plan, and any other Medicare concerns you may have. Please contact us today at (855) 367-3631.
You can also find more information at Medicare.gov.
Would you be interested in a service that you must absolutely have? As a matter-of-fact, almost everyone has it. It’s not free. You will have to pay, but let’s say you could get the same thing for 400% less than what most people pay. Would you be interested in a bargain like that? Most people would enthusiastically say ‘YES!’ You ask, ‘what is the bargain?’ Medicare. Medicare is a bargain!
Everyone needs health care because everyone gets sick and needs doctors, hospitals, drugs, treatment, etc. The average cost of a decent group health plan is going to be $1,000+ per month per person. If you go into the exchange to purchase an individual plan, you are looking at $500-$600 per month WITH a $2,500 deductible, and that is not including the maximum out of pocket.
You may say that you only pay $50 or a $100 per month for your health plan at work. That is because your employer is paying the majority of the cost. You are not getting it for free. You’re not even getting it for a reduced price. It still costs $1,000. Your employer is taking your compensation and applying a portion to your health insurance instead of paying the money to you. It’s your money, your compensation. You are not given a choice on how to receive it. That employer portion is just part of your total compensation. And it is still part of your employer’s total expense for an employee.
You might complain that now I have to pay the full cost of health care myself. Yes, your employer is not paying for your health care because you are not working any longer. Your employer is also not paying you a salary any longer. When you go to the grocery store, you can’t use your salary to pay for the groceries. You have to use your Social Security check, savings, investments, IRA’s, etc. Your source of earned income stopped when you retired, which includes your employer subsidy for your health insurance.
The realization of the true costs of services, like health care, doesn’t diminish the fact that Medicare is a bargain!
What does Medicare cost? For most people, you paid for Medicare Part A during the working years, so there is no charge. Medicare Part A covers the hospital. Medicare Part B is for doctor and outpatient procedures and that is generally $104.90 per month currently. With a Medicare supplement—let’s say a plan F—you will pay around $100-$140 when you turn 65 depending on male or female and location (Omaha, Lincoln, Council Bluffs). Add in a Part D prescription drug plan. It is possible to come in around $250 per month in total for your Medicare health coverage. With a plan F, there will be no deductibles, co-pays, or co-insurance. Incredible Cadillac health insurance for approximately $250 per month. Much better than a group plan or an individual plan on the ACA (Affordable Care Act) exchange that costs $1,000+ per month which also includes deductibles, co-pays, and co-insurance.
Medicare is a bargain! Medicare is something that you should be excited to become a part of when you turn 65. I am 53 as of the writing of this blog. I purchase my own insurance on the exchange as a self-employed individual. I would happily pay triple what Medicare beneficiaries pay for that same coverage, and it would still be a bargain for me.
My mother went to the doctor for her routine physical in Nov of 2011. The tests came back with stage four ovarian cancer. We were stunned. Mom put up a valiant fight, but the cancer ultimately took her life.
The C-word is a scary word. I don’t know your relationship to the C-word. I don’t know if you have had cancer or a family member and/or friend has had cancer. I don’t know if your friend died, recovered, or is still struggling. It is a word that incites intense anxiety.
That is why I suggest you ask yourself a number of serious questions about your Medicare health coverage as it pertains to the Omaha, Lincoln, and Council Bluffs metro area. How much risk are you willing to assume? How much risk would you prefer to pass on to another? Because the cost of cancer is high, not only emotionally in terms of pain and lost, it is definitely costly in medical expense.
Medicare Cancer Omaha Metro Area–There are three questions to ask yourself about Medicare and cancer treatment in the Omaha metro area. 1) How likely do you think it is that you could contract cancer? 2) How much will cancer treatment cost? 3) How much will you have to pay out of your pocket for treatment?
The American Cancer Society says that the elderly are 10 times more likely than younger people to get cancer. Medicare beneficiaries over age 65 account for 54% of all new cancer cases. Cancer is the leading cause of death among the elderly. While those are generalizations, you can further add your own analysis to the formula if you have had cancer yourself. Cancer among family members raises your chance of you contracting cancer. The reality is that there is a probability that you may develop cancer during your time on Medicare.
The second question to consider is cost. There is no one number for the cost of cancer. It depends on the type of cancer, the number of treatments, where the treatments are done, etc. But there are ranges. A study by Avalere Health gives prices as low as $25,000 to as high as $45,000 for chemotherapy. How does that number hit you?
The third question to consider is how much does Medicare cover? Medicare and Medicare Advantage generally will cover 80% of the cost. Your co-insurance would be 20%. Chemotherapy generally will fall under the outpatient procedures. Without a Medicare Supplement, twenty percent of a large number will still be a large number for most people. Twenty percent of $45,000 is $9,000. Is that something you can afford?
I love James Bond movies. I thought it was cool when 007 sat down at the Roulette table across from the pretty girl, but would you want to place the price of your health care up for a spin of the wheel? There are 37 slots in the wheel numbered 0-36. They are also divided among red and black. It is much easier to predict a color than an individual number. Most of the time the house wins, but people keep playing! It is incredible. Put it all, however, in reverse. Most people will not get cancer, though some will. Do you want to spin the wheel and take your chances that you won’t end up with back breaking bills, or do you want to off load the problem? There is a solution that will take the wheel away. You could purchase a Medicare Supplement that will come in and cover the 20% that Medicare does not. You then can go to any of the excellent medical systems we have in the Omaha, Lincoln, and Council Bluffs metro area or anywhere in the country without concern about costs.
My mother died February 4, 2013. We worried a lot during her illness. There was fear, pain, and grief, but there was no worry about medical bills. She had prepared.
Medicare Cancer Omaha Metro Area
I talk to lots of people about Medicare. One gentleman told me about his $1,258.80 mistake. He signed up for Social Security and Medicare at sixty-five because he thought he had to. Started receiving Social Security. Got his Medicare Part A and Part B card. Started paying his $104.90 for Part B. At the end of the year, Jim sat down with him HR person to go over his health benefits. Jim planned to work until 68 because his wife didn’t work and was on his health insurance. He saw that he was paying a small amount for his family’s health insurance compared to most group health plans and getting excellent coverage. He asked his HR person what he needed Medicare for, especially since it was an additional expense of $1,258.80 per year. She informed him that he probably didn’t since his employer plan covered everything and he is not required to have Medicare Part B, if he has other creditable coverage. Jim was not happy, but the mistake he made is very common.
Medicare Part B, or not Part B. That is the question. People assume that they need to enroll in Medicare Part B because they are required to enroll in Medicare Part A at 65. Many people don’t understand the differences, the reasons, and the rules. Medicare Part A is for the hospital and don’t cost anything because it was paid for during your working years. Part B is for doctor and outpatient procedures. That does cost something—currently $104.90 per month. You still have a 20% co-insurance with that, but if you have other coverage that Medicare would deem creditable, you can delay enrolling in Medicare Part B. There will be no penalty. You may delay to avoid paying the premium and because the coverage that you currently have through an employer group plan is the same or better than what Medicare would offer. Or, you have a spouse that needs the employer group health coverage because that person is not eligible for Medicare yet.
The question is: what should you do? Make a comparison. Get the details of your employer group health plan: premium, deductible, co-pays, co-insurance, and maximum-out-of-pocket. Once you have those numbers, then you will be able to make a side-by-side, apples-to-apples comparison between your group plan and your Medicare options. It may make more sense to go in the direction of Medicare and a supplement or Medicare Advantage than staying on your employer plan, or not. It all depends on a number of variables. I help people determine the direction that best fits their needs easily and quickly.
To B or not to B, that is the question. It requires a little homework and comparison so that you can make an informed decision that will get you the best coverage at the most reasonable cost.
A few years ago, a friend of mine told me that he was going to finish off his basement himself. His wife wanted it done because she was going to host her large family for Thanksgiving that year. Tom thought he could save some money by doing it himself. He figured out a design, went to the hardware store, bought some lumber. It sat there for several months because he got busy with coaching the kids, work, and other projects. His wife got on him because there was a deadline. He started the project, but because he wasn’t an experienced carpenter, he made a few mistakes. The mistakes started adding up. Mistakes are expensive. The deadline was looming. Finally he called in a professional. The basement was done in six weeks, just in time for Thanksgiving. He also realized that the basement was much nicer than what he could have done.
An experienced and truly independent local insurance professional will better serve your Medicare planning needs than doing-it-yourself, visiting with a friend of a friend who does it part-time, or talking to someone you will never meet a thousand miles away in a different state. The benefits of working with an experienced and independent local insurance professional are he understands the laws and regulations around Medicare and the local state. The Medicare Handbook is over 150 pages. It takes a while to absorb all the regulations, and that is just from Medicare. Each insurance company has its underwriting guidelines, policies, and procedures. And all of these organizations are run by humans, and humans make mistakes—lots of mistakes. Have you ever had an insurance company make a mistake that affected you? I’ve seen a few, and an experienced agent can quickly and easily help you resolve snags that inevitably will arise.
An independent agent can shop Medicare supplements and plans for you. In Nebraska there are over 55+ insurance companies offering hundreds of supplements, 12 Medicare Advantage plans, and 30 Medicare prescription drug plans. That is a tremendous amount of information, and prices and information are not easily available to persons not licensed and appointed with insurance companies. A truly independent agent will be able to show you all the plans and pricing, not just one company with a few plans or a handful of cherry-picked companies.
You will be using Medicare for twenty or thirty years. Picking a Medicare plan is not like getting a tattoo. It is not one and done. Each year Medicare makes changes in rules and pricing. The insurance companies are constantly adjusting plans based upon Medicare, markets, inflation, pharmaceutical companies etc. An experienced and independent agent lives in this world and can guide you through the changes to supplements and plans that are most beneficial to you. She can shop Medicare supplements each year to make sure you have the lowest price.
New people are constantly recruited to sell insurance. Some last a few days, a few months, or a few years. Most do not last at all. The Medicare rules are confusing and unforgiving. Insurance companies follow strict underwriting guidelines and are constantly changing prices. Do you really want to do-it-yourself or entrust yourself to an amateur? The insurance companies will not give you a discount for going direct. When you do that—and the insurance companies love that—your agent is now whoever answers the 800-number you call. You will speak to a different person each time. That person may be in the insurance industry for two days, two months or two years. You’ll never know. Or would you rather have an experienced and independent local insurance professional who will be your advocator for the next twenty or thirty years?
My father was a Korean War veteran. He served on a tin can-minesweeper along the Korean coast. The last 3 months of his life he spent in a VA Hospital. My brothers and I and our family’s kept vigil. I was sleeping next to his bed the morning he passed. After we grieved, the nurses prepared his body for transport. They covered it with the flag. As we walked down the hall, they blew a horn and announced over the PA system that another warrior had fallen. We escorted my father’s body to the elevator to be taken to the funeral home. A few days later at the cemetery, after the rifle volleys, after taps, the service man handed the folded flag to my brother—he’s a lieutenant coronel in the Army National Guard—and said, “On behalf of a grateful nation . . . .”
On behalf of a grateful nation, veterans are entitled to certain benefits, which includes medical care. VA benefits and Medicare work very well together to fill in the gaps in each and enhance overall medical care. VA Health benefits begin with the US Department of Veterans Affairs. You need to find out what benefits you qualify for. Qualification depends upon a number of factors: time and length of service, service related injuries, type of injuries, full or partial medical disability, etc. Your local Veteran Affairs office will help you. We have a superb office in Omaha Nebraska VA Benefits 800-451-5796. They will take you through the process to determine your level of coverage.
The next step is to truly understand the limitations of your VA Health Benefits. This is best done BEFORE you need them. Some questions to ask are: am I 100% covered, will I be reimbursed for coverage in non-VA facilities, do I have co-pays, etc. You may find that you are on your own for emergency care, especially if the local VA is not set up for critical illness, e.g., heart attacks, stokes, car accidents, etc. Many veterans I speak with are comfortable with the care they receive at the VA in Omaha and Lincoln; there are many veterans in the Omaha Metro area and Lincoln. Others will travel hours from rural areas to receive care here. If you are comfortable with VA care, that is great. Medicare can also give you other options and fill in gaps in your VA care. You may not wish to make the trip to the VA hospital from your home. You may have a family doctor that you would prefer to use. You may like the convenience of getting into the doctor’s office quickly. There may be a certain specialists you want who are not at the VA. Medicare will afford you those options as well as many others. The biggest issue I believe is that you will be covered for emergency care if you have Medicare Part A & B. Your local VA hospital may not be equipped to handle a heart attack, stroke, or car accident. The ambulance will take you to the emergency room at the hospital closest to you that is rated for your particular critical illness. The Omaha VA is not a trauma center. And the bill for the emergency room and hospital stay may be yours to pay if you don’t have Medicare, Medicare Advantage plan, or a Medicare supplement in place. My recommendation is always to find out the facts. You need to confirm the extent of your VA benefits. Get it in writing. Don’t be surprised by the gaps in your coverage.
Do not miss out on the coverage that you are likewise entitled to with Medicare. Medicare is excellent medical coverage. It can be your primary coverage, a supplement to your VA benefits, or a back up to your VA medical benefits. Medicare may enhance your medical coverage at little or no cost. I can help you understand your VA benefits in relationship with Medicare. I have many clients who are veterans. Some use Medicare primarily. Others have Medicare in place just in case. In any event, it is better to know your options 402-614-3389.