Choosing Medicare Supplement or Medicare Advantage
Choosing Medicare Supplement or Medicare Advantage plans can be both confusing and frustrating. Many seniors simply go with a company name they are familiar with (Most commonly AARP). A plan that a relative or friend suggested or they just stay in their current plan because that is what they have always had. The end result is usually a bad choice of plan for the given situation. The reality is that there is not one “best plan” for everyone. To choose the best plan for the situation, it is important to know all the options available.
Here is a quick overview of the options available to Connecticut residents and the strengths and weaknesses of each…..
Medicare Supplement Plans:
Medicare Supplement plans are secondary plans you can purchase from a private insurance company to help cover the gaps in Medicare part A and B. The plan options are standardized in CT with plans A-L. In June 2010, Plans M and N will be avaialble . Plans A-L provide different levels of coverage depending on which plan you choose. The plan benefits can not change so any company that offers a plan must offer the exact same benefits. For Example Plan J with Anthem BCBS is exactly the same as Plan J with AARP (United HealthCare). The only difference is in the rate that the private company charges for them and the rate can vary greatly. One company in CT charges $184.00 a month for plan J while another charges over $300.00 a month for the exact same plan.
Supplement plans are best for a person who is receiving a high volume of health care services. Supplement plans tend to be costly but have very little out of pocket expense. If someone is consistently receiving a high volume of medical services, it may be wise to look at a supplement. It may also be wise to use a supplement as some doctors that will not accept Medicare Advantage plans. In such a case, a Medicare supplement plan will provide coverage when an Advantage plan will not.
If you are in the market for a supplement plan it goes without saying that AARP should be considered.
They currently have the best rates available. If you are considering plan F, you should purchase plan J instead. Plan J cost less, has all the benefits of F and some additional benefits as well.
The drawback to a supplement in the monthly premium cost compared to the premiums of Medicare Advantage plans. Also, supplements do not come with Rx coverage which must be purchased separately if it is needed. If you are not a high volume user of medical services, it is warranted to look at the available Medicare Advantage plans.
One last thing to mention with supplements is that some people are simply more comfortable with them. For some seniors the most important thing is to be able to see any doctor and not worry about copays or anything associated with managed care. The person who feels this way may be willing to pay the extra monthly premium for this luxury.
Medicare Advantage Plans:
Medicare Advantage Plans are a low cost way to for seniors to obtain health care coverage. Advantage plans provide benefits equivalent to medicare Part A and B with most plans providing additional benefits beyond what is covered by A and B. The plans can come with or without Rx coverage build into the plan design. Medicare advantage plan administer your benefits instead of Medicare Part A and Part B which makes the plan primary. Premiums range from $0 monthly premium to $179.00 month premium depending on the plan selected.
Medicare Advantage Plans do have some drawbacks compared to supplements such as the fact that you need to stay in network in most cases (There are PPO plans with out of network benefits) There are also copays associates with services. The higher premium plans have very low or no copays for many services but the lower premium plans ($0 premium) tend to have more out of pocket costs on things such as hospitalization)
Here is a quick breakdown of the plans offered in Connecticut for 2009….
AARP Medicare Complete:
Positives– $0 monthly copay, Rx coverage build in with Medical, very low copays to primary doctors and specialists and out of network coverage.
Negatives– The network can have a lack of physicians in network in certain parts of the state, New Milford and some other key hospitals are not participating and the hospital copay is stiff at $225 a day for a total of 17 days.
Aetna Golden Medicare:
Positives-The Golden Medicare plans offer a national network which is nice for people who travel out of the Connecticut area. The Physician and hospital network is now one of the largest in Connecticut. The $59 plan is the lowest cost plan on the market that still covers Inpatient hospitalization at 100%. There are a number of different plans to choose from including PPO options that provide out of network coverage, the $0 premium plan offers strong benefits compared to the rest of the $0 premium plans in the market.
Negatives-Some drugs fall into the 4th tier when they are only 2nd tier with other plans.
Possitives- Strong provider network, many high dollar drugs are on the 2nd tier.
Negatives-At current premium levels, the benefits are not competitive with other carriers in the Connecticut market. The Navy plan has weak benefits ($150 copay for 5 days inpatient hospital) for the high premium charged ($179.00)
Evercare (Secure Horizons/United Health):
Positives-$0 premium plans with low physician copays and Rx coverage, Chronic conditions plans coverage more conditions than any other in the state, only Dual Eligible Plan (Medicare and Medicaid) offered in CT market.
Negatives- High out of pocket costs for inpatient hospitalization, weak network can be difficult to deal with from an administrative standpoint, weak out of network benefits compared to AARP Medicare Complete
Be leary of anyone who is only able to sell one or two of the companies listed above. If they are only able to offer a few plans they may not know everything available that could best fit your needs. Find someone who has the ability to work with all plans available in Connecticut in order to see all of the choices. Although there are a number of plans available, each person has their own needs.