2017

Medicare Advantage vs. Medicare Supplement & How to Choose

What is Medicare Advantage?

Also called Medicare Part C, Medicare Advantage plans provide coverage through private insurance companies approved by Medicare. These companies provide all the benefits of Part A and Part B, with the exception of hospice care (that remains covered by Medicare Part A). These plans sometimes also include additional benefits, such as vision, dental, and/or prescription drug coverage. Note that people with end-stage renal disease (ESRD) generally do not qualify for Medicare Advantage plans. When you join a Medicare Advantage plan, you must continue paying your Part B premium.

What is Medicare Supplement?

Also known as Medigap, Medicare Supplement plans are offered by private insurance companies and can take care of certain health care costs not covered by Original Medicare, like deductibles, premiums, and copayments. There are 10 standardized plans in 47 states, while Massachusetts, Minnesota, and Wisconsin each have their own plan offerings. Plans are categorized by letter—A, B, C, D, F, G, K, L, M, and N—and plans of the same letter offer the same benefits. However, insurance companies can offer plans at different prices; therefore, you may have different out-of-pocket costs, even if the standardized plan benefits are the same. These plans do not provide prescription drug coverage. This means that you will have to enroll in a stand-alone Medicare Prescription Drug Plan for medication coverage.

While Medicare Supplement plans help with deductibles and other expenses not paid by Original Medicare, they do not cover services if Original Medicare does not cover them. For example, they do not cover long-term care, dental care, or eye glasses.

How do I choose?

When deciding on a plan, it’s essential to compare the benefits and costs in relation to your specific health care needs. With Medicare Advantage plans, you must continue to pay your Part B monthly premium, in addition to the monthly premium for your plan. However, although Medicare Supplement plan benefits are standardized, costs can vary between plans with the same benefits and are generally more expensive.

When comparing the benefits and costs of plans in your area, be sure to take these key factors into consideration:
  • Deductibles
  • Monthly premiums
  • Anticipated costs of health care and hospital services you use often
  • Restrictions on doctors, hospitals, and pharmacies
  • Expected costs of prescription drugs that you require regularly
  • Maximum out of pocket amounts
January 02, 2017
By Ashleigh Baratta

Here’s How Medicare is Changing in 2017

Medicare provides essential healthcare coverage to tens of millions of Americans, but every year, the program sees some changes to the way it offers its benefits. In 2017, Medicare participants will see changes in costs and coverage options. Let’s take a look at some of those changes and how they're likely to affect you.

Medicare costs are going up

Every year, Medicare sees adjustments to what it charges participants. For those who have hospital coverage under Medicare Part A, the following changes in premiums, deductibles, and co-payment amounts are the most important.

(Data Source: Medicare.gov)

Meanwhile, medical-care coverage under Medicare Part B will also see cost increases in 2017. The table below has the major changes.

(Data Source: Medicare.gov)

Also, high-income individuals with earnings of more than $85,000 for singles or $170,000 for joint filers will pay even larger surcharges.

(Data Source: Medicare.gov)

Fewer prescription drug plans will be available

Medicare Part D provides prescription drug coverage to participants, who can choose among plans that private insurance companies offer. However, the number of different plans available to those participants is slated to go down again in 2017, hitting its lowest level since 2006.

Medicare beneficiaries will have about 22 prescription drug plans to choose from on average in 2017, according to figures from the Kaiser Family Foundation. That might sound like plenty, but the problem is that plan offerings tend to vary widely in terms of what specific drugs they cover and what cost structures they impose. For instance, average monthly premiums among the 10 top prescription drug plans varied from $16.81 at the low end to $71.66 at the high end. Those differences reflect the level of coverage each plan provides, but for those seeking to tailor their needs to a particular plan, having fewer options makes that task much more difficult.

January 01, 2017
By Ashleigh Baratta

2015

Supplement Plan G vs Plan F

An example from August of 2015
If you are familiar with Medicare Supplement Plan F, you should also be educated on Plan G.
There is only one difference in the two plans:

  • Plan F covers the $147 Part B (Medical Outpatient) Deductible that Medicare does not cover
  • Plan G does NOT cover this $147 annual deductible.

This is the only difference and because of that Medicare Supplement Plan G could save you hundreds of dollars per year!
Here are two examples based on Aetna Health and Life Insurance Company’s non-smoking rates in PA (zip code 19154).

Example 1: 65 Year-Old Female
  • Plan F monthly premium: $158.52
  • Plan G monthly premium: $123.45
  • Monthly premium savings: $35.07
  • Annual premium savings: $420.84
Even if we assume the full $147 annual deductible is spent, this is still a savings of $273.84 per year.

Example 2: 70 Year-OldMale
  • Plan F monthly premium: $204.50
  • Plan G monthly premium: $160.77
  • Monthly premium savings: $43.73
  • Annual premium savings: $524.76
Even if we assume the full $147 annual deductible is spent, this is still a savings of $377.76 per year.

NOTE: The Part B Deductible Can Change from Year to Year.

August 10, 2015
By Ashleigh Baratta

What Does This Mean for You?

If you already have Medicare Supplement Plan F or are considering getting a F Plan, you should be aware of the new law that went into effect on April 16, 2015.
Section 401 of the new law is one that you should understand. Essentially, the federal government is no longer allowing newly eligible beneficiaries to obtain a Medigap policy that covers the Part B (Medical) deductible ($147/year in 2015).

So, Plan F will no longer be available starting January 1, 2020.

The Good News...
If you have Plan F already, you can keep it and will not be forced to move to another plan since this only affects newly eligible Medicare beneficiaries.

The Bad News...
The Plan F premium rates will be increasing at a higher rate than the other Plans that are not impacted.

Why is this?
Each plan is individually rated based on the costs (e.g. claims processed) for that particular plan. So, after 2020, when Plan F is no longer accepting new applicants, the pool of Plan F members will begin to age more so than other plans, which will drive higher proportionate claims cost and thus drive up the premiums for Plan F. So, then the real question is what should you do?

Medicare Supplement Plan G, which has:
  • lower premium rates than Plan F and
  • provides all the same coverage, except for the $166 Part B deductible.

Plan G is a great option that could save $20-$100+ per month when compared to Plan F, with the only additional exposure being $166/year in Part B deductible.

Act Now...
If you are healthy, it is important that you act now since you will have to go through medical underwriting in order to switch your Medicare Supplement Plan. If you wait until a later point, you risk potential health issues that could prevent you from changing your Supplement plan.

April 16, 2015
By Ashleigh Baratta

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