Medicare Advantage or Medicare Part C is another way to receive Medicare. “Original Medicare” is a combination of Medicare Part A and Part B. It is called “Original Medicare” because that was its first plan in the late 60’s. Medicare Part A was hospital insurance and Medicare Part B was added later. It included doctor visits and outpatient procedures. Some people call it traditional Medicare. It became “Original Medicare” when a new form of Medicare was created–Medicare Advantage, also called Medicare Part C. What is the advantage of Medicare Advantage over Original Medicare?
The Advantage of Medicare Advantage vs Original Medicare
Let’s explain “Original Medicare” first. Medicare Part A covers hospital stays. The Part A has a deductible. It is currently $1,340 for every hospital stay for the same event in a 60 day period. If a completely unrelated event lands you in the hospital, e.g., car accident, heart attack, stroke, etc., even within the first events 60-day period, you will still pay the $1,340 deductible for those unrelated events. That kind of deductible schedule could add up to a significant cash outlay in a year. Likewise, Medicare Part B exposes you to a great deal of risk. While Medicare Part B pays 80% of doctor and outpatient costs, your 20% co-insurance has no cap on it. There is no maximum out-of-pocket. Sky is the limit. If you have a million dollars worth of bills under Part B, 20% is $200,000.
The Advantage of Medicare Advantage is a maximum out-of-pocket. The highest maximum out-of-pocket for Medicare Advantage plans in 2018 is $6,700. Some plans maximum out-of-pocket are much less, depending on the area, the company, and the type of plan. However, the easiest and clearest difference between Original Medicare and Medicare Advantage is a definite limit on what you pay out of your pocket. Medicare Advantage has a maximum out-of-pocket. Original Medicare does not.
Each Medicare Advantage Plan has its own schedule of co-pays, deductibles, and co-insurance. One co-pay that is standardized in all plans is the emergency room visit. In 2018, the emergency room visit co-pay is $80. I would rather pay $80 with a Medicare Advantage plan rather than 20% of any amount on Original Medicare. I broke my arm a number of years ago biking. My emergency room visit was $3,000. The advantage of Medicare Advantage I think is an $80 co-pay rather than 20% bill–$3,000 x 20% = $600.
Part D Prescription Drug Included
With Original Medicare, you still need to get a Medicare Part D prescription drug plan, even if you don’t take any medications. Otherwise, you will be penalized when you eventually do enroll in a Medicare Part D plan. The Part D plan is generally included in a Medicare Advantage plan at zero or little cost. If you purchase a Part D plan, you may pay between $21–$100 per month. The advantage of Medicare Advantage is paying zero or very little for your drug plan.
Vision and Dental
Most Medicare Advantage plans have additional benefits, such as vision, dental, and over the counter items. How would you like to get your teeth cleaned twice a year at zero cost? That is all most people are interested in when it comes to dental usually. They don’t want to spend $50 a month on a dental plan when cleanings are all they really want or need.
Compared to Original Medicare, the advantage of Medicare Advantage makes complete sense. It limits your maximum out-of-pocket, combines Part D at little or no cost most times, includes extra benefits, like dental and vision. There are usually many plans in your area. Here is Omaha there are eleven Medicare Advantage plans among five insurance companies. You should be able to find something that fits your needs among that variety. Call us to find out 402-614-3389.
A number of distressed clients called me because they saw announcements on the news that Aetna and United Healthcare (UHC) were pulling out of individual states and would not be offering health insurance any more. It is true that Aetna and UHC are pulling out of some healthcare plans, but Aetna exits ACA NOT Medicare.
Aetna Exits ACA Not Medicare
Aetna individual plans are on the market place exchanges through the ACA (Affordable Care Act). ACA has nothing to do with Medicare, and Aetna and UHC, which are the largest Medicare plan providers, will continue to offer Medicare Supplement plans and Medicare Advantage plans in all the states. Aetna and UHC Medicare Part D and Medicare Part C plans will not be affected.
Why Are Aetna and UHC Pulling Out?
The plans that are on the exchanges are not inexpensive plans. They are loaded with all types of services. The pricing is also designed to transfer money from beneficiaries who have higher incomes to those who have lower incomes in the form of subsidies. That is why the majority of Americans are paying significantly more for less insurance. At the same time, the number of people on the exchange in health insurance plans are far less than the estimates the government initial provided. The numbers are low for two principle reasons. Fewer people are purchasing the product. Instead they are accepting to pay the penalty. Second the employer mandate was weakened and delayed each year by the president. The result is that less people were pushed on to the exchanges than anticipated. The overall result is that insurance companies who administer the ACA plans on the exchanges have consistently lost money each year. The share holders and boards decided to stop losing money by pulling out.
This has no direct affect on Medicare and your individual plans, even if it is an Aetna or UHC Medicare Supplement plan or Medicare Advantage plan. Aetna exits ACA NOT Medicare.
The leading cause of bankruptcies in the U.S. are medical bills. Coupled with the headlines “Medicare Going Bankrupt,” the question is: whose going bankrupt first? Health care and Medicare have been in the news and will be even more so as the political season kicks into high gear. Don’t let Medicare’s budget problems became yours.
Medicare Going Bankrupt
The headlines that state “Medicare Going Bankrupt” are not accurate. Medicare is divided into three parts: A, B, & D. Medicare Part B, which covers doctors and outpatient procedures, is covered by participants’ premiums and general revenues from the government budget. Medicare Part D, which covers drugs, is the same. They can never run out of money. Medicare Part A covers hospital expenses. Payroll taxes finance Part A. The Government Accountability Office report says that Part A will not be able to pay 100% of its bills by 2030 at present estimates. It will only be able to pay 86% of expenses which is a problem that can be easily solved in a couple of ways. Medicare going bankrupt is the wrong issue.
Rising Health Care Costs
Rising cost is the issue. Medicare benefits will be paid for. In the past, there were three ways to pay for the program. They are still the same. Increase taxes, increase the premiums, reduce benefits or a combination of all three. This year the premium for Part B was increased from $104.90 to $121.80 for new members. The Part A deductible was increased from $1,260 to $1,288. The Part B deductible was increased from $147 to $166.
You Pay It
Medicare costs will go up in the future, like all health care costs. The bottom line is you will be effected by what the government does or doesn’t do about Medicare. More of the cost for your health coverage will be placed in your lap, so it becomes even more important that you have the most efficient supplement to your Medicare. You need to manage your health care costs more efficiently, even if government doesn’t.
Don’t be a victim who is at the mercy of Congress or Medicare. Find the best coverage at the price you can afford before you are forced to search. Protect yourself from future Medicare benefit reductions with a more efficient supplement—one that covers those co-pays, deductibles, coinsurance but at a lower premium. FREE Quote 402-614-3389.
One of the most painful calls I get is from a client who is calling on behalf of a parent. They want to know if there is anything I can do for a parent who is paying huge monthly premiums for her Medicare supplement. The agent who signed them up is long gone. The supplement has increased over the years due to age and rate increases. Now the parent is in her 80’s and in poor health, and the monthly premium is financially crushing. Many times there is nothing I can do because their mom or dad cannot pass the underwriting questions to change to a supplement that would be significantly less. They missed out on one of the keys to unlocking Medicare–an agent who shops her policy each year.
Five Keys to Unlocking Medicare
There are five keys to unlocking Medicare. First you need to do some research yourself. The bible for Medicare is Medicare & You. It is the official Medicare Handbook that the Center for Medicare & Medicaid Services publishes each year. The Medicare.gov website is an endless source of resources. It is important to do your own research so you are familiar with the proper Medicare terminology. That way, you can better understand a serious discussion around Medicare.
The Big Key
Key number two: search for an experienced, independent agent. Experience means they have been doing this for years. Ask them when they got their insurance license. They should be able to spit that out without thinking. Ask if they do this fulltime. There are a lot of insurance companies and agencies who hire part-time people to increase their production. They give them little education or training. Even less support. Most drop out of the business after six or nine months. That probably is not the person you want. Ask if they are independent. Some insurance agents can only offer one company. They cannot shop the world of Medicare plans. Ask them to list the companies they offer. If they change the subject or only list one or two, you have your answer.
Key number three: ask questions. As I tell my clients who are aging into Medicare, you turn 65 once in a lifetime. I help people turning 65 going on Medicare four or five times in a day. I am excited when someone asks me a question I haven’t heard before. An experienced agent should be able to quickly and easily explain the details of Medicare, supplements, advantage plans, prescription drugs, etc. If not, you may wish to look somewhere else.
Price Compare Med Sups
Key number four: compare every year. I talk to my clients at least once a year. I want to know that everything is going well. Part of the conversation is the price of their supplement. With age and rate increases, what are you currently paying? I shop their supplement right then and there over the phone. I tell them if there is a plan of equal or better value at a lower price. That prevents you from getting into the situation in your later years of a plan with back breaking premiums.
Key number five: stay healthy! Go to the gym. Eat healthy. Chase grandchildren, pets, moving cars, anything that will get your heart rate up. One of the keys to unlocking Medicare supplements is your ability to pass underwriting questions so you can change plans and pay less. I can try different companies that have more liberal underwriting guidelines, but ultimately there are limitations for serious health issues.
Medicare and Medicare supplements are awesome health insurance, but to enjoy the greatest benefits from this awesome resource, you need to follow these simple five keys. Call me 402-614-3389 or the American Association of Medicare Supplements to find an experienced, independent agent near you.
If you saw a Benjamin Franklin $100 bill laying on the sidewalk, would you pick it up? If someone offered to pay your groceries for 2 months, would you take them up on that? If you had to fill out a coupon to receive six months of free gas for your car, would you send it in? Most people would, but most people never price compare their Medicare Supplement to save $100, $500, $1000 a year. One of the most common excuses and common Medicare myths is that it is not Annual Election Period (AEP), which is Oct 15th–Dec 7th, so ‘I can’t do anything.’
Common Medicare Myths
A common Medicare Myth I hear everyday is that you can’t change your Supplement except during Annual Election. That is true about Medicare Part D plans. Unless you have a special election, you cannot change your Medicare prescription drug plan until Oct 15th. The same applies to Medicare Part C/Medicare Advantage. You cannot change from one company or plan to another except from Oct 15–Dec 7th. Those are the CMS (Center for Medicare & Medicaid Services) rule.
Change Medicare Supplement Any Time
That, however, is not the case for Medicare Supplements. You can change your supplement every month if you wish. A Medicare Supplement is a contract with a private insurance company that fills in the gaps in your Medicare coverage. It pays the Part A hospital deductible. It pays some or all of the 20% co-insurance under Part B. All you have to do to change supplements is answer some health questions and fill out the forms. That’s it.
Compare prices. It takes less than 5 minutes. I do quotes for people all day. You can know in seconds whether you are overpaying for the exact same coverage, and you can do something about it. You can change right now. You can save $300, $500, $1000 a year right now. It is especially appropriate to check after you receive a rate increase from your insurance company. You aren’t stuck. Pick up the phone and find out your options.
This is still the land of the free, and in the Medicare Supplement world you are free to compare and change. Don’t be fooled by one of the common Medicare myths. You can make changes to your supplement at any time. Compare prices. If you would stop, bend over, and pick of a Benjamin Franklin laying on the sidewalk. You can take the time to check the supplement rates and even fill out an application 402-614-3389.
I learned to sing the alphabet before I learned to say it, and from that humble beginning, language opened up to me.
You can’t understand language without first understanding its alphabet. Medicare has a language, and Medicare has an alphabet. It begins with A, B, & D. They are the three essential components of Medicare.
A is for Medicare Part A. A covers the hospital 100% for 60 days but only after you pay a $1,260 deductible out of your pocket. Ouch! Part A is free because you paid for it during your working years. Eligibility for A is 3 months before your 65th birthday, the month of your birthday, & three months after. If you don’t enroll then, there will be a penalty.
B is for Medicare Part B. B covers doctor visits and outpatient procedures, such as, blood work, x-rays, emergency room, ambulatory surgeries, walkers, wheel chairs, oxygen tanks, etc. Part B does cost something. Currently $104.90 per month. Medicare Part B pays 80% of the costs. Your portion is 20%. Important fact about your 20% co-insurance is that there is no cap. As long as the bills roll in, your money rolls out. Bigger Ouch! The penalty for late enrollment for Part B is 10% for every 12 month period.
The final letter is not C. It’s D—D as in drugs. Medicare Part D was started in 2006 after people complained about the crushing cost of medications. Prescription drug plans are administered by private insurance companies approved by Medicare. Prescription Drug Plans (PDP) can range in cost from $20–$50 per month with deductibles and co-pays. There is a penalty for not enrolling in a Part D plan when you are eligible. It accrues each month you are not enrolled and is permanently added to your Medicare premium when you do enroll.
Medical expense can be astronomical. If the correct insurance is not in place with sufficient coverage, costs may surprise and overwhelm you. Not following the eligibility requirements could result in surprise penalties and permanent costs from Medicare. Call 402-614-3389 or email us at info@OmahaInsuranceSolutions.com for a free consultation to make sure all your letters are in place.
Markets are constantly changing. The Wednesday and Sunday additions of the Omaha World Herald are full of ads and fliers. Stores publicize sales, put up posters with markdowns, advertise deals, and promote special events. Prices and products are constantly changing. The market place does not stand still.
The insurance and Medicare market is no different. Aetna announced a 37 billion dollar bid with a capital B for Humana this week. Anthem Blue Cross is in talks about acquiring Cigna. Centene Corp agreed to buy Health Net Inc for $6.3 billion. The insurance landscape is changing.
These are big players, so when they move, the Medicare market will be affected. Some will argue that consolidation will reduce costs. Others will say that bigger and fewer insurance companies means monopolistic pricing. How it plays out is yet to be seen. Analysis will fill up hours of television and radio time with speculation about the Medicare market. The reality is insurance products, including Medicare supplements, will change. The changes will come primarily in the form of prices.
An endless list of variables go into Medicare supplement premiums. Creating and administering a Medicare Supplement product costs something. Medical claims come out of the premiums collected, so the premium needs to be high enough. In the end, the company must generate a profit for the shareholders. Otherwise, there is no point and the company’s assets will be sold off.
To generate those profits, the company needs to acquire clients. That is done in a number of ways. Slick advertising and marketing campaigns get prospects in the doors. Have you ever received any mail from an insurance company? During open enrollment (Oct 15th—Dec 7th), the Medicare commercials are like political adds at election time. They are endless. You can’t wait for them to stop.
The other way that insurance companies get prospects in the door is price. But how low can a company price the product? In other words, how lean can the company run its operation and still make a reasonable profit? If they guess wrong on pricing, it could be devastating for everyone involved—clients, employees, and shareholders.
If they lower the price too much and cannot meet claims and expenses, the company will be forced to raise premiums and drive away healthy clients. If they are too high, they will not have enough clients to create an adequate pool to assume the risk. Claims could further drive up costs and cause the company to raise premiums even higher.
So, like oranges, asparagus, and lettuce, the price of supplements are in a state of constant flux. Some of the factors are age. Price goes up with age. Rate increases are announced by the company because medical costs go up. And sometimes, there is even an occasional decrease.
Who is your shopper? Who will let you know what is happening in the Medicare market place? Who can find the lowest price supplement for you? I am Chris Grimmond the found of Omaha Insurance Solutions. I have worked for and with insurance companies for 13 years. I understand the Medicare market and how it works. We will shop your Medicare supplement and make sure you always have the best value for your dollar 402-614-3389
A popular show on AMC is Turn. It is about General Washington’s spies during the Revolutionary War. You find out quickly that intelligence is critical for an army to be successful. It was intelligence that moved Washington to cross the Delaware River Christmas night to catch the Hessians sleeping at Trenton. That victory was one of the turning points in the war.
Do you have the best Intel on your Medicare supplement? Part-time supplement sales people know very little about Medicare, Medicare products, and the insurance industry. How could they? They have little training. They do it when they are not doing their day job or taking care of family concerns. The insurance companies and agencies that recruit them do not invest a great deal of money or energy in them because they know most of them will not be there next year. Consequently, their knowledge is very shallow.
Why’s that important? Because they are making recommendations for you about your Medicare supplement. They do not have the training, tools, or experience to pull back the skin on these insurance products to see all the moving parts.
For example, what was the annual rate of increase for a Medicare supplement for the past five years? If client premiums increased 2% or 12%, that is a big difference and big deal. Yes, prices go up, but will the insurance company give you a great price today and turn around 3 years later to jack them up? As we age, the chance of health issues arising is much higher. It will be more difficult to change companies when we get older. You don’t want to be stuck with a company that is going to drive the prices through the roof as you age.
What is the age increase? Each year most supplements will go up as you age because the costs go up as we age. Is the age increase 2% per year 4%, 7%. That’s important. Does the company have a real low price when you turn 65 or 66, but then goes through the roof by the time you are 80?
An experienced insurance profession will be able to show you the numbers, interpret the numbers, and explain the numbers. The cheapest price is not always the cheapest price. There are other variables. That is Medicare Intelligence.
Intel is important for armies to win battles. It is important for people selecting Medicare Supplements so that there are no costly ambushes down the road. Medicare Intelligence shows the hidden flaws.