Things to know when choosing a health insurance plan


Making the decision is not easy. There is a lot of fine print when it comes to expenses and coverage. But choosing the wrong plan for your personal situation can be a costly mistake and difficult to reverse, depending on where you live. Most states make it difficult to change plans, so choosing wisely is often crucial.

With that in mind, here are eight things everyone should know when selecting the best health insurance plan for them. Keep this in mind, and you’ll be less likely to make a choice you’ll regret later.

1. Supplemental insurance is generally the best option for people who can afford it or who have health problems.

Ken Schumm of Olympia, Wash., Who will turn 65 later this year, had planned to purchase a Medicare Advantage plan. It seemed the most sensible and affordable option. Still, he wanted to be sure, since he has rheumatoid arthritis and is taking expensive drugs to fight it.

To help him decide which coverage to choose, Mr Schumm hired Medicare consultant Melinda Caughill, co-founder of 65 Inc., who calculated that with traditional Medicare with additional medical and drug insurance, he would face to a total of $ 11,324 per year for premiums. and its frankness. In contrast, if he chose an Advantage plan, the consultant calculated, his costs, including personal expenses for medical care and the purchase of drugs, could reach $ 18,325 per year. Mr. Schumm’s medical bills are high in part because his prescription costs will exceed $ 6,000 per year with an Advantage plan or with traditional Medicare plus a supplemental drug plan, 65 Inc. calculated.

The benefit plans are financially risky for patients with health problems, says Ms. Caughill. With an Advantage plan, “Ken could potentially save $ 3,000 if he didn’t need health care,” she says. “But his worst case scenario is thousands of dollars worse. Based on her current health needs, she calculates that her annual costs with an Advantage plan would range from $ 8,325, if he only uses his medications and doesn’t require doctor visits, to $ 18,325. if he uses doctors a lot and hits the spending limits in his plan. .

By choosing Medicare and supplemental insurance, Mr. Schumm will also be able to visit any doctor or hospital that accepts Medicare without a referral. The most popular supplemental health plans, such as Plan F or G, do not have a co-pay, although Plan G has an annual deductible of $ 203.

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In fact, wealthy people are almost always better off with a supplemental Medicare plan, says David Armes, California Medicare consultant. This is because, as discussed below, most people will end up with significant medical needs. The additional plans, although more expensive initially, offer better coverage than the alternatives.

2. Having Medicare alone is risky.

Some 5.6 million Americans enroll in traditional health insurance but do not purchase supplemental insurance, according to the Kaiser Family Foundation. They all pay a monthly Medicare premium – people who buy additional coverage or enroll in Medicare Advantage must also pay this premium – but face no other costs, except drugs, if they don’t. do not seek medical attention.

The problem is if they fall ill or injure themselves and require a long stay in a hospital or skilled nursing facility. In this case, they are less protected against costs than patients with supplemental coverage or on Medicare Advantage. Suppose you have a serious car accident and have to spend months in a skilled nursing facility. Medicare covers all costs for the first 20 days. For the next 80 days, you have a co-payment of $ 185.50 per day.

“It’s like not getting home insurance,” says Mary Jeanne Cullen, Medicare consultant in New Jersey. “There is a financial risk.”

3. Medicare Advantage plans are cheaper for healthy seniors.

If you don’t go to the doctor often and usually stay in the network, Medicare Advantage is a cheaper option than Medicare with a supplement. Not only do many Advantage plans not have monthly premiums, they often include a drug plan and additional benefits such as dental, vision, or hearing care not covered by Medicare. Some offer gym memberships.

The catch, and it’s a big deal: Medicare Advantage patients have to use networked providers or face significantly higher co-payments than those with Medicare supplemental insurance typically pay. So if you have to go to the best cancer hospital, and it’s not in your plan, you could incur thousands of dollars in additional costs.

Another important point: you cannot just consider your current state of health in the decision. Starting with an Advantage plan and thinking that you can upgrade to an additional plan later if your condition deteriorates could be a risky strategy, depending on where you live. In most states, companies that sell supplemental insurance have the right to charge you more or deny you coverage altogether after this initial enrollment period.

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4. Not all Advantage plans are created equal.

Some Advantage plans are set up as health maintenance organizations, where you have to stay in the network to get coverage; others are set up as preferred vendor organizations, which will typically pay a portion of the costs when you leave the network. PPOs give patients much more freedom than HMOs, according to health experts.

Stephen O’Brien, an insurance agent in Maine, says most of his clients can’t afford the monthly premiums over $ 200 billed by popular Medicare supplemental insurance plans. It directs its clients to a zero-premium PPO with an annual maximum of $ 5,900 for network care and $ 10,000 for network and non-network care. It brings patients to Boston’s best hospitals and doctors, many of which are networked.

“If something really happens,” says Mr. O’Brien, “you want to go where you need to go. “

5. Supplemental plans are the best option for people who travel.

Medicare Advantage plans generally have a network of doctors in a certain state or part of a state. If you are traveling, they will usually cover treatment for medical emergencies, but not routine or chronic issues.

There are exceptions. Some Advantage plans have nationwide networks where you have access to certain hospitals and doctors outside of your service plan.

Additional coverage, on the other hand, can be used with any doctor or hospital that accepts Medicare in the United States.

6. Supplemental plans generally become more expensive as you get older.

Most supplemental plans use age-based pricing, which means the premium automatically increases for each year you hold it. Plans often provide additional increases to cover increased medical costs.

7. It can be difficult to switch to Medicare with supplemental insurance.

During the first six months after enrolling in Medicare Part B, which covers doctors and other outpatient services, you are eligible to purchase additional insurance. You won’t have to answer health questions from the insurance company selling it and you won’t be able to be rejected for pre-existing conditions. However, if you try to purchase additional insurance after those six months have expired, the insurer may charge more due to health issues or deny coverage altogether. An additional plan at this point might be impossible or unaffordable.

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It’s a slightly different story for Advantage diet patients. In most states, whether you started in an Advantage plan or upgraded to a later plan, you have 12 months from the time the plan began to move to Medicare and purchase supplemental insurance without having. to answer an insurer’s questions, explains Ms. Caughill of 65 Inc. At any time during that time, she adds, “you can switch to original health insurance plus a supplement.”

Some states have even more liberal change policies. A few, including New York, Connecticut, Massachusetts, and to some extent Maine, use a health insurance system known as community rating, which legally requires insurers to offer the same rate at all consumers in that state, regardless of their age or state of health. In these states, people can switch from an Advantage plan to traditional Medicare plus additional coverage after their initial enrollment period, without having to answer the health questions of the insurance company that sells it, and you can’t. not be rejected for pre-existing conditions.

8. Don’t forget the “nuclear option”.

For people who don’t live in one of those states and are in desperate need of affordable medical coverage, Ms. Caughill of 65 Inc. will sometimes recommend what she calls the “nuclear option”. the service area of ​​their Advantage plan. Whenever you leave the service area of ​​an Advantage plan, which can be a county, multiple counties, or an entire state, you are entitled to get additional insurance in the new service area as if you were just L The insurer can adjust the price based on age, gender, or smoker status, but cannot charge more due to existing conditions.

“You get a Medicare enrollment overhaul,” she says.

Ms. Caughill had a client with lung cancer who moved from Wisconsin to Colorado to purchase a supplemental plan. But she warns people that they really need to move. “Otherwise,” she said, “you are committing insurance fraud.

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