Monthly Archives: October 2013

Medicare Advantage or Medicare Supplement–Which is Best

Medicare Advantage or Medicare Supplement
Which is Best?

Have you given this any serious consideration? You should, because other than plain Original Medicare, these are you only two choices.. and Original Medicare, with all it’s potential for serious financial damage should not even be in the picture.. PERIOD!

My name is Joe Leech; I’m a senior myself (77) plus a long time professional in the health insurance profession. I hope I have your attention. This will be a serious discussion; it is NOT a sales presentation.

So the question is: “Which is Best?”

There is no pat answer for every single person, but there are two major considerations: One is objective, the other, subjective.

Of the first: It’s economic consideration. A Medicare Supplement plan costs money every month. Some, even “many” people—simply do not have the resources to even consider making the choice. ANY monthly insurance premium forces them out of the market. It may be the choice of eating, paying utilities, or having a med sup insurance. For them, the only clear choice is the best Medicare Advantage plan they can find, including if available, a Medicaid Advantage plan if the economic circumstances qualify them for this. Unfortunately for many in this circumstance, they are not even aware of the extra options they may qualify for. So one answer of the question is this: If economics prohibit the consideration, there Is No Question.

For the rest of the people—: It boils down to this: How Much Risk Are You Willing to Take? Is your bet that you will never come down with a major medical expense, and if you do, you’ll be able to cover it? And how much are you willing to cover?

You may be one of the few that says, “society will take care of me; no hospital will turn me away” and you’d probably be right. You could think: “As long as I have original Medicare, and they will get something, they will take me” Probably right, but you could owe balances for a life time… but what if you don’t want that? And what if your condition is not an emergency? How will you get care? Basic medical providers are daily opting out of taking new Medicare (only) patients, and many are opting out of many of the popular Medicare Advantage networks. Most of those care providing facilities are limited in services, access to the state of art equipment to keep you alive or comfortable. If you are a “charity case?” what kind of care will you realistically receive? Is that a gamble you are willing to take?

Or maybe on the other hand you are one of the rather “well to do”. Your medical bills can run easily into multiple six figures. The point is, would you want your hard earned money to be depleted this way? Relatively routine procedures like knee and hip replacements or bypass procedures can run into high “six figures”. For most of us, those options are simply not acceptable. If they are for you, you may as well stop reading.

If you are still reading, it means you DO have options: A Medicare Supplement or Medicare Advantage Plan. So which becomes the better choice? What is the criteria for determining that?

It is quite simple: Choose the one with the LEAST out of pocket expense.

You could say to yourself: I expect no out of pocket expense, or playing the odds, I’ll take the plan type with the least regular or monthly out of pocket but look at the plan with the greater monthly (insurance cost), subtract the difference then put that away in a special medical savings account. If something happens, I’ll have the reserves to cover it.

Really? If the difference in monthly premium cost is only $300, and you have good savings habits, you have put away $3600 in a year. But your OOP is $7500. First, did you save so you have it, but more importantly, did you get care you really wanted in a network based probram with choices beingmore and more limited every year?

If not, then it becomes a simple matter of number crunching… but let’s get a little further intro your head:

These are the cold hard facts: A Medicare supplement plan (generally a Plan F or in that family) will always be less than the max out of pocket spent in virtually ANY Medicare Advantage plan and beat it in most cases of being 1/3rd the money, including the premiums.

You can find the max out of pocket (we’ll call MOOP from here) by consulting your official medicare guide provided to you each fall by the government. In there are the MOOPs for all of the major MA plans. They typically run in the area of $6500.

You’ll have to do some research for the MOOPs on Med sup plans. First, as these are not govt funded, the govt does not publish a single place to find them. Next, because there are so many variables, such as your age (does not apply for MA) and also smoking status, the number will vary, and the 3rd variable is the area you live in.

The one thing that does make it easy to compare is the fact that every carriers benefit for any given plan is identical to every other carriers, so all you really need to compare is pricing. .. but even that is not easy because you may not know what plans to use to compare, and not every company offers every plan.

In general, the only two plans to truly use and compare are Plan F and Plan F +. These cover 100% of your costs.

And what is the best way to do that research? Talk with a multi line broker that can offer you the plans from several companies, and always ask him or her for your quote on F and F+. If they can not offer you both of these, time to find a different agent or firm.

As a very general comparison (if you agree that MOOP is the only valid number to look at), a typical MA plan will come in at $6700.

In comparison, a typical F+ plan will come in at $2500.

That is a lot of money!

But there are many other factors that also favor the F./F+. First is that the future OOPS. Most Med Sup plans annual increases are under 5%, and more typically 3.2% on a 10 year running average, and this compares to increases of MOOP of higher percentages with MA.

MA plans typically have been downsizing the actual procedures covered.

MA plans in most cases, particularly if you go for the lowest MOOP which will always be an HMO, restrict you to the places or people you’ll get medical services from. In short, the Insurance Company, not YOU, will be making many of your care choices.

So it boils down to this: Do I want to have lower costs and less risk and also be able to have freedom of choices, or do I want to pay more and have fewer choices? It’s really that simple.

If this makes sense to you, and now that we are in AEP where if you have an MA plan and you want to change to the plan that makes sense, call me, signal me, text me… what ever and let’s sit down and compare and start you on savings.

Contact information: Joe Leech, Leech Insurance /Local Senior Benefits. Com or
phone 561 213 4709: