A New Strategy for Saving Money: Aug 2015
Elsewhere in this web site we have discussed the relative merits of medicare supplement vs medicare advantage plans. We know that with a medicare supplement plan like plan F, we basically prepay for every expense we might have (except for prescriptions which are covered under a Part D plan). It’s a great idea, and with an eye on the real purpose of insurance (cover worst case years), it makes sense. The big problem is that the typical $250/mo per person is out of reach for many seniors.
The other most common option is a Medicare Advantage plan, offered at $0/mo prem or low costs, depending on the insurance company.. and this is “pay as you go”, with a max out of pocket limit in the area of three times the max out of pocket of a Med Sup plan. If you have a healthy year with few needs.. you win, but let’s think again.. the reason for insurance is to protect you in a BAD year. Now you are looking at MOOPs of over $6000.
Is there an answer? There is, and it’s what this is about. But first, let’s think where most of the “pay as you go” expenses in a Med Advantage plan are going to come from. That is hospital expenses. You pay up front and dearly for those costs. So what is the answer for a person with a limited budget but who wants to avoid the high use costs?
The answer is to take the MA plan that suits you best, but to that, add a Hospital Expense plan. These are offered by at least 3 national providers, and in the range of $35 per month and up, depending on the coverage you want. $50 might be more typical, but compared to $350 or so plus for a Med supplement, this makes sense.
Ask me (or your agent, if not me) about the details.