Editors' pick: Originally published Oct. 10.
Medicare Open Enrollment is just about here - it runs October 15 to December 7 - and for most beneficiaries, the big decision is whether to leave traditional Medicare and enroll in managed care Medicare Advantage. The reason: money.
In Phoenix, AARP's Plan F - the most popular Medicare Supplement plan in most markets - is $149.97 per month. A prescription drug Part D policy is another $50. Those plans are on top of basic Medicare but honestly are needed because basic Medicare covers no drugs and leaves uncovered many bills in doctors offices. Figure $200 per month for this extra coverage. Or you could go with Medicare Advantage. That's $0 monthly for all the coverage above.
Advantage does have co-pays for doctor visits ($10 for primary care physicians, $45 for a specialist in that AARP plan), where the Supplement plan does not. But do the math. Advantage can be lots cheaper. That's why about 31% of Americans now are in Advantage and the number grows steadily.
Greg Sanders with Peachtree Insurance Advisors in Georgia shared a case from his files: "I worked with a couple in their late 60s last open enrollment. Their total cost for [traditional Medicare supplement and drug coverage] was slightly under $400/month or $4800 per year. They were both in very good health and took a few inexpensive generic prescription drugs. I ran a cost/benefit analysis and even with the additional out-of-pocket costs (including doctor visit copays, etc.), they would still come out close to $4000 ahead with the [Advantage] plan."
"People like Advantage, because the costs are lower and it covers things traditional Medicare does not," said Dr. David Friend from The BDO Center for Healthcare Excellence & Innovation. Like what? Different Advantage plans offer different perks but they may involve coverage for hearing aids, perhaps eyeglasses, sometimes foreign emergency medical care.
"Usually you get more value and also more care coordination when you are in Advantage," said Allen Miller, CEO of consulting firm COPE Health Solutions. That last part - care coordination - is significant. In traditional Medicare, the consumer coordinates his/her own care and that can be daunting. In Advantage - where the plans are usually issued and administered by large insurers - built in is professional care coordination to give this insured the most efficient mix of services.
The downside? "In Advantage the patient has less choice of doctors, hospitals, drugs, and treatments," said Friend.
Key to any Advantage plan is that it revolves around a network of physicians and hospitals. In traditional Medicare, a patient can go to any provider who accepts Medicare and in many markets that is most doctors and hospitals. Not so with Advantage where the insurers - to control costs - offers plan members smaller network choices.
You want to go to that internationally famous cancer hospital? Maybe, in Advantage, you can't because it is out of network. You want that celebrated retinal surgeon? Same story - maybe you can't use him/her.
That's why consumers with more disposable income and who value choice generally stick with traditional Medicare, suggested Miller.
Seniors who are minding their limited budgets are carefully eyeing Advantage.
And in that respect, every expert said the same about Medicare Advantage - before enrolling in a plan be sure the physicians you want to use are in it and that your prescriptions are covered. Be certain about this because an Advantage gotcha is that after you have been in Advantage for a year you have forfeited your Medicare guaranteed issue rights to get back into a Medicare Supplement plan. Once a year has elapsed, you may seek a Supplement plan but you are subject to medical underwriting and may be denied or may be offered a plan with a surcharged premium.
Note: you can move to other Advantage plans however and, in most communities, there usually are anywhere from a couple to a half dozen.
Understand this, too, with Advantage you need to check the physician network and drug coverage every year in Open Enrollment. Most plans annually tinker with their drug formularies - how they reimburse prescriptions - and lately too most are narrowing their physician and hospital networks, to optimize their costs. If your physicians and hospitals are eliminated, check competitor Advantage plans.
What if a network is so narrowed that it entirely lacks certain physician specialties - such as retinal surgeons or physicians expert in rare diseases? Not to worry, said Dr. Joel Shalowitz, a professor at Northwestern University. "Plans must deliver all necessary services for covered benefits," Shalowitz said. "If a retinal specialist is required, the plan must provide referral to one. A local example in Illinois is the shortage of neurosurgeons in some areas. None of them contract with any managed care plans. But if you need a neurosurgeon, the plan must provide one."
Bottomline: to succeed with Medicare today know that you also have to be an aware, educated consumer. And in Open Enrollment that means deciding if money-saving Advantage works for you...or doesn't.