In this episode of The Long View, Phil Moeller, lead author of the Get What’s Yours series of consumer guidebooks, including Get What’s for Medicare, takes a closer look at traditional Medicare, Medicare Advantage plans, and Medigap plans. . We also explain how you can receive Medicare if you work after age 65 and how consumers can make the most of their health care options.
Below are excerpts from Mueller’s conversation with Morningstar’s Christine Benz and Amy Arnott.
Traditional Medicare Plus Medigap vs. Medicare Advantage
Amy Arnott: You mentioned earlier that Medicare Advantage is often popular among people with lower wealth levels. Are there other characteristics common to people for whom traditional Medicare plus Medigap makes the most sense compared to Medicare Advantage?
Phil Mohler: I don’t know if that changes the decision, but Medicare has a very good low-income assistance program available to people with basic Medicare. Most notably, these include something called the Part D drug cost assistance program. More than 10 million people have taken advantage of the program, and there are millions more who are eligible but don’t know about it or haven’t applied for it for a variety of reasons. This could be a very nice supplement that makes basic Medicare a little more attractive to people than it would otherwise be. Some other support programs may help with things like Part B costs. Again, in some cases, this may mean it’s better for a person, especially someone with significant health needs, to use Original Medicare instead of using Medicare Advantage . But at the end of the day, I think Medicare Advantage is still much cheaper than Original Medicare. The key decision here is whether you decide you don’t like your Medicare coverage for health reasons and want to use the open enrollment period to switch back to original Medicare. You may not be able to afford a Medigap plan because the additional charges increase significantly. What I like to tell people is that you need to do your homework and decide what you can do, and you need to do it before you make a decision so you can be informed. is.
How private insurance brokers impact Medicare
Christine Benz: I wanted to ask you about the role of private insurance brokers in all of this, and that’s a topic you address in your book. Can you talk about how their incentives impact the insurance products they sell, and how that conflicts with what’s good for consumers? You said that this is a major factor in the rise.
Mr. Moller: First of all, let me just say that I love insurance brokers. They are some of the most talented people on the planet and extremely knowledgeable. About one-third of Medicare enrollees use the services of a broker. Brokers are free for subscribers, but what’s wrong with free advice? Well, let’s compare it to buying a car. If you go to a Toyota dealership, I don’t think you expect the salesperson to talk about how good Ford or Chrysler or any other brand’s cars are. But I think when you go into a Medicare insurance broker’s office or talk on the phone, people assume that the person is going to tell you about every car on the market. You’ll be able to see all the options available to you when it comes to insurance plans, including auto, allowing you to see the full spectrum of what’s available and make an informed decision. Well, not really. First of all, no one, even the best broker, can know all the private insurance plans out there. Second, brokers tend to move toward insurance plans that pay the highest commissions. So, when you’re on the phone with a broker, the commission structure is a big deciding factor in which company they recommend.
This book contains extensive excerpts from highly informative focus group discussions conducted by private foundations with Medicare insurance brokers. What struck me was that A, brokers are really knowledgeable, B, they tend to want to do the right thing, but C, they have to make a living, so be careful with their fee structure. That means you have to pay. So I think the question is, does the structure of this committee lead to bias in its recommendations? Yes, that’s right. how often? I don’t know. In some cases, your broker will act in your best interest even if you have some money left over, but I’m not sure if that happens all that often. That doesn’t happen often. What I want everyone to know is that you understand that your broker won’t tell you about every product in the market that you might want to consider. Therefore, I would take their advice, ask questions, and be satisfied with the options they presented. However, I decided to take the next step and do some research online on how to find other products on the market. I can explain that research someday, but it will take some time. So I’ll stop here.
Are consumers better off with a Medicare Plus Medigap plan?
Arnott: We’ve talked to several consumer advocates who focus on Medicare, and they say that most consumers who can afford Medicare are better off adding a Medigap plan to traditional Medicare. He said it quite frankly. Do you agree with that recommendation and are there any exceptions to it?
Mr. Moller: That’s certainly true. Let me give you a personal example. My family has a lot of medical expenses. Both my spouse and I have a letter G plan. Over the past year, medical bills have exceeded $600,000. There were zero additional charges. Our total medical costs were Part B and D premiums, Medigap premiums, and out-of-pocket drug costs. The out-of-pocket costs for Part A and Part B procedures were literally zero, but the costs were significant. We are on IV medications that cost $60,000 a month. Payment was zero. Because it is deployed in a remote facility, it will be billed under Part B rather than Part D. So if you have the means, I think it’s easy to choose that combination, especially if you have high medical needs. Also, Medigap does a very good job of filling the holes in basic Medicare, so I think that was the cheapest route for me.
Things to keep in mind when choosing a Medigap plan
Benz: I wanted to ask you about choosing a Medigap plan, and I think you kind of answered that, but I think the trend is to reach for that gold-plated plan. And I’ll tell you an anecdote about my mother and father. That said, they had a great plan that covered every inch of their expenses. And in addition to the cost savings, for our family who is responsible for paying the bills, we literally no longer have to pay the bills, which is also a huge administrative savings. This is very nice. However, we might talk about some important points to keep in mind while choosing one of the Medigap plans.
Moller: Of course. Another thing that I’m sure your parents benefitted from is what I call the “pillowhead test.” Being protected can be a real stress reliever, and medical expenses can become a major financial issue later in life. And when you feel protected, many other things become easier. The important thing about Medicare supplement plans is that we said there are 10 different letter plans. For example, suppose you have a plan for the letter G. All insurance companies offering letter G plans must cover the same things. There are some additional features, such as a health club, but that’s really a small part of why you get a Medigap plan. The fact that they all cover the same content means that the only variable you really buy is the premium. And there are wide variations in insurance premiums. why? This is because people do not assist or regulate the national level, and the details of national regulation are, so to speak, opaque. You can’t access these things. I don’t know the refund rate. We don’t know anything about their billing history for your plan. You never know how they will benefit from your plan. So, I encourage people to shop based on premium, and we find that premium varies widely. Again, there are ways to buy these and explain them to people based on their time interest.
