How to Choose A Medicare Plan: 7 Things to Consider
When you speak of “Medicare plans,” that is the terminology for a Medicare Advantage plan. Medicare Supplements or Medigap policies are private insurance that works with Medicare, but Part C/Medicare Advantage (MA) plans are “Medicare plans.” So, let us consider important factors when reviewing Medicare plans. How do I choose a Medicare Plan?
How do you figure out which Medicare plan to choose? In some places, there are 40-50 Medicare plans. There are 7 important factors to consider when reviewing Medicare plans.
Consider Reviewing Medication Costs Between Medicare Plans
Medications cost is important in how you choose a Medicare Plan.
When I consider a Medicare plan for a client, the first consideration is medications. I run the medications through a calculator that reviews the Medicare plans’ formularies. I can immediately see which plans have the competitive cost medications for the person. Sometimes there is little or no difference, but other times the difference in cost is huge. If there is a thousand-dollar difference, the winner is clear.
Access to Providers Narrow Down the Medicare Plans
Second, are the physicians and hospitals in the network? In the Omaha, Lincoln, and Council Bluffs region, almost all the doctors and hospitals are in the three major networks, so it is rarely an issue. In other areas, confirming the client’s doctors is essential.
The rural areas of Nebraska are not well connected with many Medicare plans. Some cities may have several Medicare Advantage plans, but the plans are competing, using the various networks as part of their marketing. We review networks and ready access to doctors and medical facilities when considering a Medicare plan. How you choose a Medicare plan may hinge on the doctors and hospital networks available thus further narrowing down the choices.
Review Maximum Out-of-Pocket Amounts Between Medicare Plans
Insurance is about risk. How much risk are you willing to take on? The Maximum Out-of-Pocket (MOOP) is the most you will pay. Now the probability of you ever paying that amount is very small, but it is possible.
Many people have a tough time weighing the difference between the possible and the probable. In my conversations with prospective clients, I am trying to determine if the person truly understands the difference.
I am looking for the lowest Maximum Out-of-Pocket (MOOP). That is better, but there may be a trade-off to gain the lower MOOP. That trade-off or loss needs to be considered and weighed when reviewing each aspect of the Medicare plans.
The MOOP can also change. None of these numbers in a Medicare plan are permanent. Neither are the numbers for Original Medicare and Medicare Supplements. As with most products, the costs will go up over time, especially now in a high inflationary environment.
Copays Are Lower with Some Medicare Plans
Copays are the small amounts you pay when you have a service performed.
For example, you visit your primary care physician (PCP). You pay a copay. Likewise, for tests, you may have a $5, $10, or $25 copay at the time of service. An MRI maybe $100, $200, or $300 copay, even though the MRI actually costs $4,000.
These copays add up toward your Maximum Out-of-Pocket (MOOP) and stop if your MOOP is reached.
Usually, the copays are very similar among the Medicare plans in an area. If there is a drastic difference, there is usually some sort of trade-off in terms of other copays, MOOP, additional benefits, etc.
Each person weighs the various copays differently. I generally will go through the copays on a couple of Medicare plans to gauge a prospect’s reaction. Some people like low copays for doctor visits but don’t mind higher copays for tests. After reviewing a few Medicare plans, the client arrives at a choice.
Additional Benefits Are a Big Consideration When Reviewing Medicare Plans
Additional benefits are usually where I see the most interest. People want dental, vision, and hearing. Original Medicare–only Medicare Part A and Part B–does not cover these areas.
Dental and vision are something that clients regularly use, so they highly value them. Most do not want to pay more for the additional coverage.
The additional benefits can be a deciding factor in determining which Medicare plan to choose. Sometimes a dentist is not in-network in one plan but not another. Other times the plan will do a reimbursement so the client can stay with that dentist even though the dentist is not credentialed with the plan.
Some plans give credits toward hearing aids. Other Medicare plans have heavily discounted hearing aids through partner relationships with vendors.
Depending on the person’s most immediate needs, one plan may rise to the top over another when reviewing all the Medicare plans in an area.
Out of Network May Be A Deciding Factor
By the time people reach Medicare, they have had many healthcare experiences. One type of healthcare people do not like is HMO (Health Maintenance Organization). The dislike is multiple, but it comes down to restrictions. While the HMO plans in our area are very open, some people still want the maximum amount of access.
The PPO (Preferred Provider Organizations) plans allow persons to go to any provider who accepts Medicare. The PPO plan is the best fit for those who want to go anywhere in the country for treatment.
How to choose a Medicare plan may require travel consideration. Medicare plans cover anywhere in the country for an emergency, but some people stay away from home for long periods. They may even have a second home somewhere else. I have several clients who winter in Arizona, and their cardiologists and second primary care physicians are in Phoenix.
The PPO plans are ideal for those mobile persons outside of the region for prolonged periods and may need ordinary services while they are out and about. That type of factor quickly separates one plan from the other when reviewing Medicare plans.
Medicare uses a star rating system to rate each of the Medicare plans. Five stars are the highest. The evaluation is broadly based. I have my own internal rating system because I deal with the various insurance companies and plans in my area. Some companies are better than others at resolving issues. All of those factors go into my recommendations once we have moved down the path of elimination, but the star system is very helpful when reviewing plans, especially plans in cities and states with which I am not that familiar.
How to choose a Medicare plan is quite often a process of elimination and narrowing until the person finds the Medicare plan that best fits their unique circumstances, risk level, and budget. When reviewing Medicare plans, go down this decision tree with a knowledgeable and experienced agent to discern which plan is the best fit for you in your current situation.