After you have signed-up for Medicare Parts A & B, you have another decision to make. While original Medicare covers much of your medical costs, it still requires you to pay many fees such as copays, coinsurance, and deductibles. Do you stay on original Medicare, or do you add an additional plan to mitigate these uncovered costs? Two paths are at the forefront of this decision: a Medicare Supplement with a Prescription Drug Plan (PDP) or a Medicare Advantage Plan (MAPD). How do you know what Medicare plan is best for you? Today I will discuss the pros and cons of a Medicare Supplement plan.
A Medicare Supplement plan, also known as a Medigap policy, is health insurance that can help pay some of the healthcare costs that original Medicare doesn’t cover, like coinsurance, copayments, or deductibles. Private insurance companies sell Medigap policies.
Let’s end on a positive note, so I will go ahead and first discuss the disadvantages of a Medicare Supplement.
- First and foremost, you will pay upfront for this plan. Meaning, you will have a monthly premium that you will pay regardless of if you use the plan or not. Moreover, you still may have deductibles to pay for as well. From a fiscal point of view, this is not ideal. In a MAPD plan, you pay as you use the plan while also having a ceiling or cap for yearly cost.
- You may need to add a Prescription Drug Plan (PDP) to fulfill the Part D requirement. This is another plan and another premium! Also, ancillary benefits such as dental, vision, hearing, and fitness plans are typically not covered or offered because original Medicare does not cover these benefits. Thus, an additional policy would be needed, or you would pay out of pocket for these services.
- These types of plans can experience a rate increase multiple times a year and throughout the life of the plan unless you have a rate lock. Rate locks are typically within the first six to twelve months on the plan and then you are eligible for rate increases thereafter.
- The Coup de Grace for many individuals is that you may not qualify for a Medicare Supplement after your Initial Enrollment Period (IEP), which is within 6 months of your Part B effective date. For instance, in Missouri there is a guaranteed issue period if you are still in your IEP. After your IEP, you will need to go through underwriting where current health conditions and medications can quell your acceptance to the plan.
You may be wondering at this point why anyone would go on a Medicare Supplement. Here are the advantages of selecting a Medicare Supplement.
- A Medicare Supplement allows you to go to any doctor or hospital that accepts Medicare; thus, you do not have a network of providers that you are required to use. For those who do not like restriction, this is a great option.
- Not having a network leads me to my next point of nation-wide coverage. If you have two residences or live in a second location for more than three months a year, a Medicare Supplement may be a better option for you. You are not restricted to a network and thus free to travel wherever and forever how long you desire.
- Plans are easy to compare because they have the exact same benefits. Each letter plan, for example Plan G, is the same from company to company.
- In some states, like Missouri, you have an anniversary date. On your anniversary date, you have a 60-day period to shop your plan for a lower price without going through underwriting. You may only switch to the same letter plan; thus, the benefits are the same, but you are switching for a lower price. Note that this is not available in all states.
As you can see, selecting a Medicare plan is a very personal decision based on your preferences and what you can afford. Thus, contacting an agent that acts as a consultant with several plans is integral to your happiness and to making sure you are on the best plan to accommodate YOUR needs. At Hovis & Associates, we are contracted with all the major players. So, call today at (800) 411-0737 or visit our Medicare FAQs section on HovisandAssociates.com. We make the complicated SIMPLE!