HOW DO I MAKE A DECISION?
EDUCATE YOURSELF
YES---IT IS TIME TO PULL THE TRIGGER! To arrive at a sound decision you need to properly educate yourself, and you have done so by reading this website. You now know more than 95% of all seniors about the field of Medicare and now it is the Midnight Hour. (Get out your old Otis Redding albums)
The horror stories you hear about some plans should not prevent you from venturing into a Medigap or Medicare Advantage policy as they truly are better than just Original Medicare. Also, do not throw up your hands like my friend and say “I’m just going with XYZ Company because I keep hearing their name.” Make an educated decision and this is really quite simple. Remember, if you are not happy or you make a mistake, you can rectify it every November 15 to March 31.
• EMPLOYER COVERAGE---If you are currently working and are covered by a good plan that costs less than Medicare, keep it. However, when you retire (This is Important), you need to sign up for Original Medicare or a private plan policy because RETIREE INSURANCE IS SECONDARY TO MEDICARE. In other words, Medicare pays first and your insurance second, and if you are not in the Medicare system, you are liable for all costs.
• ORIGINAL MEDICARE---The only group that should stick with just Original Medicare are the dual eligibles (on both Medicaid and Medicare). Your state SHIP agency can assist you in getting your Part B premium paid plus all of your deductibles and co-pays. A dual eligible should also add a Part D Prescription Drug Plan because Medicaid will also pay this premium.
SELECTING A MEDICARE ADVANTAGE POLICY
To make a decision you will need to assess three items: The type of plan (HMO vs PPO), the insurance company, and the agent. The following will provide you some guidance.
When selecting the correct Medicare option, one shoe does not fit all, but the following summary of the just discussed Midnight Hour decision making process will apply to most of you.
SYNOPSIS
When you sign up for a plan, it usually becomes effective the first day of the following month. Try to sign up early in the month so you have your identification cards when your coverage begins. Additionally, you cannot purchase Medicare private insurance plans until you have registered with Medicare and have been issued your Medicare insurance card (see the “How Do I Enroll” section of this website).
Remember, this is generally not a life altering decision (although it can be in some extenuating circumstances) and if you believe you have made a mistake, you can change every year from November 15 to March 31. Life does not always provide you these second chances. As, General George Patton said, “A GOOD DECISION TODAY IS BETTER THAN THE PERFECT ONE TOMORROW,” so make your educated choice and go play golf or visit your grandchildren.
• If these first three do not apply to your situation, look for a zero or low premium PPO that includes a drug plan. The exception would be that you have a physician that strongly recommends a particular HMO and then you should give this every consideration.
• Part D Prescription Drug Plans---no matter which of the above options you select, make sure you are covered by a Part D plan.
• If you are entering Medicare (turning 65 or leaving a company health plan) and have significant on-going health expenses, stay with Original Medicare and add a Medigap plan and Prescription Drug plan.
• If you are a dual eligible, stay with Original Medicare and add a Prescription Drug plan.
• If you are in a company health plan that has equivalent coverage to Medicare and costs less, stay with it, but make sure to switch to Medicare coverage when you retire.
• ASSESSING THE AGENT---While selection of the correct plan and company are paramount, the selection of the correct agent is very important. Once I had decided on the company and plan I felt best for my needs, I met with 3 different agents from that plan and choose the one I felt was most qualified.
Why is this selection important? There are two basic reasons, the first being immediately after joining the plan, I had several questions. The agent I chose was always ready with an answer either by e-mail or phone.
Second, sooner or later you will probably think your company has made an unfair decision in relation to the provision of your health care. You certainly have the right to appeal and your agent can be invaluable to guide and assist you through this somewhat tedious process.
Good agents exhibit the following traits:
Why is this selection important? There are two basic reasons, the first being immediately after joining the plan, I had several questions. The agent I chose was always ready with an answer either by e-mail or phone.
Second, sooner or later you will probably think your company has made an unfair decision in relation to the provision of your health care. You certainly have the right to appeal and your agent can be invaluable to guide and assist you through this somewhat tedious process.
Good agents exhibit the following traits:
• Give you a provider list
• Have been with the company a minimum of 2 years
• Work for a specific company, they are not independent
• Have been with the company a minimum of 2 years
• Work for a specific company, they are not independent
representing several firms
• Don’t say “Can I sign You Up?” or apply other forms of
pressure
• Disclose immediately if their product is an HMO or PPO -
some try to hide that they are selling an HMO because
many potential clients negatively perceive these plans.
• Do not encourage mass enrollments---in a room with 10
seniors, you may have 10 different situations and
individual analysis is required
• ASSESSING THE COMPANY---Generally it is best to select a major company with a good track record. Larger firms almost always have larger provider networks, are less likely to go out of business, and providers tend not to leave their networks because they are a profitable source of patients.
While major companies are not without their faults, as many have been fined or their privileges temporarily suspended by Medicare, you want to select a company that you have at least heard of and know has been in the business for some length of time.
Conversely, when you select a small Medicare Advantage plan, and there are numerous ones out there, you are normally limiting your choice of doctors and facilities and the financial soundness of these firms can cause you some grief. If they fail, you are faced with obtaining new coverage or going back into Original Medicare, or in other words---you are starting over.
• BENEFITS---You have now determined your doctors are providers, you are not going to pay a premium, and now you need to confirm the benefits that are important to you are included.
Do not pass Go unless the HMO or PPO you are contemplating includes a Part D Prescription Drug plan at no additional premium. There are definitely a number of plans that contain no such coverage, and if you select one, you have to go back into the market and purchase a drug plan to the tune of about $39/month. DO NOT MAKE THIS MISTAKE!
Do not pass Go unless the HMO or PPO you are contemplating includes a Part D Prescription Drug plan at no additional premium. There are definitely a number of plans that contain no such coverage, and if you select one, you have to go back into the market and purchase a drug plan to the tune of about $39/month. DO NOT MAKE THIS MISTAKE!
In addition to the drug plan, confirm the policy contains an annual spending cap, sometimes referred to as a MOOP (maximum out of pocket) limit. This is critical as this protects you from catastrophic loss and some plans do not have a limit. Also, do not select a plan where this annual limit exceeds $5,000. This is a major reason for selecting a Medicare Advantage Plan because ORIGINAL MEDICARE CONTAINS NO SUCH LIMIT!
Realize also that most plans place travel restrictions on their coverage, in other words, you may not be insured if you leave the plan’s coverage area. Thus, if you live in Ohio and spend your winters in Florida, verify your coverage.
In relation to deductible and co-pays, they do vary from plan to plan and unfortunately it is very difficult to compare these costs among competing plans. Generally we did not find a wide variance among plans, and spending hours trying to make comparisons may be an exercise in futility. We believe it is probably not necessary, and leave that final decision to you.
Another strong reason to select a Medicare Advantage product over Original Medicare is the provision of extra benefits not included in basic Medicare. These include coverages for dental, hearing, vision and exercise club memberships. While these services usually include a co-pay, they are definitely worth having and you do not want to select a policy without them.
In relation to deductible and co-pays, they do vary from plan to plan and unfortunately it is very difficult to compare these costs among competing plans. Generally we did not find a wide variance among plans, and spending hours trying to make comparisons may be an exercise in futility. We believe it is probably not necessary, and leave that final decision to you.
Another strong reason to select a Medicare Advantage product over Original Medicare is the provision of extra benefits not included in basic Medicare. These include coverages for dental, hearing, vision and exercise club memberships. While these services usually include a co-pay, they are definitely worth having and you do not want to select a policy without them.
• COST---You should not have to pay a monthly premium for a first rate HMO or PPO. The reason for this statement is that there are many quality no premium plans available. In general, most HMO plans are zero premium whereas many PPOs charge a minimal amount well under $100/month.
For example, in my county two of the largest PPO plans charge $46 and $56/month for their policies while the largest PPO plan in my area has a zero premium.
For example, in my county two of the largest PPO plans charge $46 and $56/month for their policies while the largest PPO plan in my area has a zero premium.
• PROVIDER NETWORKS---If you have a primary care physician or specialist that is important to you, the first thing you must do is confirm they are in the plan’s network. I instantly mistrust an agent or company that does not immediately supply a provider directory.
Quite simply, we have found a direct correlation between the size of the provider list and the quality of the plan. In summary, if you are not given a provider list or your doctors are not in the network--HEAD SOUTH!
• ASSESSING THE PLAN---There are basically three choices in Medicare Advantage plans; HMOs, PPOs, and PFFS (Private Fee For Service) plans.
HMO policies comprise over 60% of the Medicare Advantage plans sold. THIS IS NOT BECAUSE THEY ARE THE BEST PRODUCT ON THE MARKET, RATHER THIS IS THE TYPE OF POLICY THE MAJORITY OF INSURANCE COMPANIES PROMOTE. As discussed in a previous section, an HMO plan can more easily ration your health care than a PPO, thus creating more profitability for the sponsoring firm.
We recommend that you select an HMO only if the following situation exists. Your primary care physician must be on the provider list and they are someone you explicitly trust. You need to talk to them and their insurance person and confirm they have had no problems in referring patients to specialists or in obtaining pre-authorizations. If they can readily give you this assurance, then (and only then) should you consider an HMO.
Medicare literature is loaded with stories of HMO abuses, primarily due to health care rationing. I continually hear at community meetings how attendees have been denied health care by their HMOs, both from large and small companies. Do not get mad at the HMOs as that is how they make a profit by spending less on you than the government provides.
You do not hear these stories about PPOs, primarily because by their very make up, they generally cannot ration your care. Personally, I do not want to run to my doctor for a referral every time I want to see a specialist or make sure I remember to ask permission should I need to enter a health care facility. And should I forget to ask for permission, I have to pay for everything. Therefore, UNLESS YOU HAVE THAT PERFECT PHYSICIAN WHO CAN GUARANTEE THE CREDITABILITY OF YOUR HMO, GO THE PPO ROUTE!
We recommend that you select an HMO only if the following situation exists. Your primary care physician must be on the provider list and they are someone you explicitly trust. You need to talk to them and their insurance person and confirm they have had no problems in referring patients to specialists or in obtaining pre-authorizations. If they can readily give you this assurance, then (and only then) should you consider an HMO.
Medicare literature is loaded with stories of HMO abuses, primarily due to health care rationing. I continually hear at community meetings how attendees have been denied health care by their HMOs, both from large and small companies. Do not get mad at the HMOs as that is how they make a profit by spending less on you than the government provides.
You do not hear these stories about PPOs, primarily because by their very make up, they generally cannot ration your care. Personally, I do not want to run to my doctor for a referral every time I want to see a specialist or make sure I remember to ask permission should I need to enter a health care facility. And should I forget to ask for permission, I have to pay for everything. Therefore, UNLESS YOU HAVE THAT PERFECT PHYSICIAN WHO CAN GUARANTEE THE CREDITABILITY OF YOUR HMO, GO THE PPO ROUTE!
When you select your PPO (and possibly an HMO in the right circumstances), you need to compare three items; the provider network , the cost, and the benefits provided.
To begin, we are going to eliminate the PFFS plans because nothing is written in Medicare literature that positively promotes them. Furthermore, they are continually at the center of marketing abuse controversies, primarily because they are promoted as allowing you to go to any doctor. However, agents often fail to tell you that most doctors do not accept the Plan. DO NOT EVEN CONSIDER A PFFS PLAN!
• MEDICARE ADVANTAGE PLANS---If you do not have significant ongoing costly health problems, then you should go the Part C Medicare Advantage route. These plans provide many benefits beyond Original Medicare at no additional cost and most include prescription drug coverage. IT IS BAFFLING WHY ONLY ONE-FOURTH OF THOSE ON MEDICARE OBTAIN THESE PLANS because if you are careful in your selection, they are a worthwhile improvement over Original Medicare. After the following discussion of Part D Prescription Drug plans we will tell you how to select the correct Medicare Advantage plan.
• PART D PRESCRIPTION DRUG PLANS---DO NOT EVEN THINK ABOUT NOT OBTAINING ONE OF THESE PLANS. You can add one to Original Medicare, a Medigap plan, or most Medicare Advantage plans already contain one.
You can once again go to Medicare.Gov and click on Prescription Drug Plans----Learn More About Plans in Your Area. Do not pay over $39/month and do not choose one that has a yearly deductible. If you have decided to purchase a Medicare Advantage plan, you will not have to make a Part D decision because it will be part of the Medicare Advantage policy. Just make sure you select a policy that includes a drug plan and that your drugs are in the formulary (list of covered drugs).
You can once again go to Medicare.Gov and click on Prescription Drug Plans----Learn More About Plans in Your Area. Do not pay over $39/month and do not choose one that has a yearly deductible. If you have decided to purchase a Medicare Advantage plan, you will not have to make a Part D decision because it will be part of the Medicare Advantage policy. Just make sure you select a policy that includes a drug plan and that your drugs are in the formulary (list of covered drugs).
• There are no pre-condition exclusions if you join within 6 months of
becoming eligible
• After the open enrollment period, if you switch or drop your Gap
• After the open enrollment period, if you switch or drop your Gap
policy, you will almost always be subject to underwriting.
• You have options of 11 standardized policies, A-L, and the only
• You have options of 11 standardized policies, A-L, and the only
difference among these policies is cost. You can get a list of
policies available in your area on Medicare.Gov (Click on
“Compare Health Plans & Medigap Policies in Your Area”) and
simply call a few companies to compare their prices, for example a
Plan “F” which is the most popular.
• If you meet the preceding criteria and have decided the Medigap
• If you meet the preceding criteria and have decided the Medigap
policy is for you, we encourage you to download or order the
government publication “Choosing a Medigap Policy.” You can do
this by going to Medicare.Gov and clicking on “Select a Medicare
Publication.”
THESE ARE YOUR OPTIONS
• MEDIGAP SUPPLEMENTAL INSURANCE---If you are generally in poor health, visit a lot of doctors, and have on-going significant medical expenses, we recommend you stay with Original Medicare and purchase a Medigap policy plus a Part D Prescription Drug Plan. These plans do have a premium but studies have shown that having your deductibles and co-pays taken care of by the Medigap policy will save you money in the long run.
You have to do the math. Your total monthly premiums will be $96.40 for Part B, approximately $150 for the Gap policy, and around $39 for the Drug Plan or about $285/month. If your projected deductibles, co-pays, and co-insurance exceed this amount on a continuing monthly basis, then this is the route for you to choose.
Things to remember about these policies:
You have to do the math. Your total monthly premiums will be $96.40 for Part B, approximately $150 for the Gap policy, and around $39 for the Drug Plan or about $285/month. If your projected deductibles, co-pays, and co-insurance exceed this amount on a continuing monthly basis, then this is the route for you to choose.
Things to remember about these policies:
However, most of you are not dual eligibles, and you should not stick with Original Medicare just because you are overwhelmed. UNFORTUNATELY, TOO MANY PEOPLE MAKE THE DECISION TO NOT MAKE A DECISION (SOUNDS LIKE YOGI BERRA) and miss out on the advantages of the upcoming options, many of which can be obtained at no cost.
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