For those of us using Original (aka Traditional) Medicare A and B insurance (and NOT a Medicare Advantage managed care plan) this is a good time to reevaluate all your health insurance choices. Although it is not the time of year to change to a different Medicare Supplement plan, it is a good time of year to reevaluate everything. Even the dental or vision insurance you have needs an annual cost/benefit analysis.
I never could find a dental nor vision insurance plan that provided coverage for the providers I use so I "self insure" for those services. Sadly, my spouse did not registered with the VA before 2003, after which all benefit eligibility became income base. That means we cannot buy a wonderful private dental insurance plan offered through the VA. We naively assumed IBM would always provide that insurance. Still, every year or so I look to see if there is a dental policy worth the premium and deductible price.
The Medicare Supplement plans aka medigaps absolutely need reevaluation IF you live in a state that allows you to switch plans. Ask you State Health Insurance Program (SHIP) about the rules. If there is no switching allowed, I urge you to lobby your state legislators to fix that limitation. State legislators are allowing the insurance industry to hold seniors hostage in your state if there is no ability to switch. Basically, it enables insurance companies to force seniors into Medicare Advantage plans by limiting access to medigaps. It's very hard for people to realize the plan they pick the "first time" is the only plan they can have for the rest of their lives.
There is another aspect to medigap plans that is interesting. If you buy a policy in one state (e.g., New York) and then move to another state (e.g., Florida), you get to keep the NY policy and the NY policy rate structure. NY policies are community rated. That means everyone in a given zip code pays the same amount no matter their age. If you lived in a NY zip code that had better prices (e.g., Syracuse), you get to keep the rates associated with Syracuse when you move to a different state. Sometimes I joke with people when I do counseling who cannot change. I tell them to move to New York for a few months, get a better medigap, and then move back to their home state!
However, it's not all rosy in New York. The rates in New York for some medigap plans have dramatically increase going into 2018. In New York City the cheapest medigap F plan available is now close to $300. That truly deserves a cost/benefit analysis to determine if paying $3,600 per year is worth the cost.
The first question I ask people when I do counseling is WHY did you buy an F plan. Way too many people tell me it is the "most popular plan". I then ask them if they have chronic conditions that require a lot of medical care. Even when people do have chronic conditions, they typically go to the doctor about once a month. A N plan in New York is about $200/month and would be fine for them.
Do the math! Look at your Medicare Summary notices for 2017 and add up the deductibles, co-insurances and co-pays you would have to pay if you did not have a medigap. Then look at the annual premium amount you pay for that medigap. Are you over insured? The only reason to be over insured is you have money to burn and do not want the burden of needing to write a check to pay a provider. You are buying the convenience of that service.
This year, I did the math and my K plan continues to be good to me. I paid $912 in annual premiums for my K plan. The K plan paid out $250 in benefit. That mean's my K plan cost me $662 for the year. It also provided me with a "safety net" of knowing the maximum out of pocket cost I would face for 2017 is $5120 + $912 or about $6000 should I have a catastrophic event. So I look at it as if I have a $6000 deductible if something health wise goes very wrong. I have a $5000 deductible on my house insurance if my house burns down so it's about comparable. But I also live in a state that allows me to change medigaps whenever I want without preexisting penalties. If I become chronically ill, I will switch to another plan that provides more comprehensive coverage.
What would I do if I lived in a state that doesn't allow easy switching? I would buy a F high deductible plan. It has a low premium and a deductible of $2200. A relative in California has had that plan for 5 years for about $60/mo. She knows her maximum out of pocket would be $2920 if she has a catastrophic event. That's about the annual premium for a F regular plan in California but she only pays that much if she is sick! Most years, she has only needed to pay $720/year.
If you need more information, there is an excellent Medicare Supplement Guide published by Medicare. I urge you to read it:
https://www.medicare.gov/Pubs/pdf/02110-Medicare-Medigap.guide.pdf
Thursday, November 9, 2017
Subscribe to:
Posts (Atom)