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This is a decision I had to make several years ago when I turned 65. I started out with a no premium five star local Advantage plan to take “advantage” of the free perks for the first year, then switched to traditional Medicare with a plan G supplement, the most expensive plan. To most this would seem quite contradictory, but let me explain my reasoning. Medicare allows first time enrollees to trial an Advantage plan for up to a year, and the switch to a traditional plan with supplement with guaranteed issue and premiums as if you had signed up for the supplement initially.
I chose the Advantage plan first so I could utilize the free eye exam, and the full value of the dental benefits, as well as an amount for exercise equipment. I am healthy so I rolled the dice regarding deductibles, copays, etc. Unfortunately an ER visit made my bet a loser (but my wife who initiated the same plan won the bet).
Towards the end of the year on the Advantage plan I signed up for traditional Medicare and a plan G supplement. This was not a result of losing the bet, but was the plan all along. Even though a plan G was the most expensive plan it comes with no deductible other than the Federal part B deductible, and no prior authorizations required. My wife worked in the medical field in nursing homes and saw the constant battle to have Advantage plans keep their insureds in rehabilitation until they were ready for discharge. Also I am very frugal so I have a tendency to look at the cost of everything to determine if it is a good value. If I were not having full coverage without a deductible I would most likely, to my detriment, delay seeking treatment for a perceived medical issue.
So both my wife and I have the more expensive plan. This year’s cost for medical issue just under 6K for all premiums and the Federal part B deductible. We have zero premium Rx plan with no copays, deductibles, for our few medications. We like the cost certainty in the future and have planned for the annual increases in our financial plan.
So my question is, how did you decide whether to sign up for an Advantage plan versus traditional Medicare with a supplement?
I start Medicare July 1 and also am retiring on July 1. My husband retired from a California state agency in 2016 and was fully vested in retiree health care, which we’ve both used until now. Now that we’re Medicare-eligible, we get the same plan, but it’s Medicare + supplement. So I’m thinking it’s the equivalent of Part G? We also get Part D coverage through this supplement and some Part B/IRMAA reimbursement added to our pension checks.
We were on the PERS Platinum PPO before Medicare, and now we’re on the Medicare version of that. It’s very generous in terms of allowing you to pick your own doctors and specialists.
If you and spouse have long term care insurance, you may consider MA plan as an option. An example was my friend who needed several months of rehab in hospital. His company insurance will not pay for more than 2 weeks. His LTC kicked in and they had no issues paying for it.His copay costs were paid by his company insurance once he exceeded maximum out of pocket. He has premium free MA now and saves on Plan G premium and that money will be invested for future health care needs.
LTC is not covered by private health insurance, Medicare, Medigap or MA. There is a distinction between rehabilitative care inpatient or not and custodial care which is what LTC is designed to cover. Medicare covers up 100 days in a skilled nursing facility for rehab purposes.
An MA plan may be fine while you are reasonably healthy, and if you avoid unusual diseases. Not so much if you need treatment they don’t want to cover, or that is not available where you live. I have a rare eye disease. The latest surgical techniques are measurably better than the previous versions. I was fortunate that I was able to have the latest surgery performed by a local doctor. However, if I had had the surgery a couple of years earlier, I would have had to travel out of state or settle for the older version. Reports posted to the online support group I still follow indicate that plans will not cover out of network treatment for this disease. I imagine a similar problem would arise for unusual cancers.
My wife’s close friend, who she has known since they were young girls, has had rheumatoid arthritis for most of her life.
Before we had to make a Medicare choice for Nancy, we saw her friend struggle to get approval from her MA insurer for services which should have been a no-brainer. For example: she received only days of rehab after a surgery to repair a broken ankle which wouldn’t heal properly on its own. The rehab facility sent her home in a bad way. Over and over again she struggled with this until she was able to switch to traditional Medicare.
No MA for us, thank you.
You can save some money on Medigap costs by choosing a high-deductible plan and keeping cash in savings to cover some annual out-of-pocket expenses.
I would like to point out that how states regulate Medigap Plans differs and the costs will thus vary. I live in WA which is a community rating state. This means that everyone who has, for example Plan G for a given company, will have the same monthly premium regardless of age. In my case, in 2011 when I turned 65 the monthly premium was $142 and it is now $214. This is about a 3% average annual increase. You can contrast this with Mr. Quinn who has reported his monthly premium in NJ to be more than $1700. NJ is not a community rating state.
The other two methods used mean that premiums can increase with age. Last I looked these states use community rating: Maine, Vermont, Massachusetts, Connecticut, New York, Arkansas, Minnesota and Washington.
If you do not live in a community rating state you might want to research what the rates are for older ages…….
Spent my career in healthcare. Did my residency at an HMO in the 1970s. Was a Kaiser HMO enrollee prior to age 65 so rolling over into the Kaiser MA HMO plan was simple. No complaints.
Kaiser is the oldest and probably the best HMO, but others don’t match up.
I never consider an Advantage plan. I budgeted for Traditional + Plan G and grateful it is available. I had a bad fall early this year and my only concern was my health and recovery. This has involved an ER visit, CT scan, multiple X-rays, multiple specialists and physical therapy. I had options and was never concerned with deductibles, co-insurance or pre authorizations. I am still in PT and on my way to full recovery, which has been my focus, not medical bills.
Seems like regular bashing of MA plans by those that are paying for supplements. MA plans are very much like the plans you had when you worked and thought it was golden. No deductible and low Out of Pocket maximums are easily obtained with MA plans. You may be limited to the
same Dr’s you had when you worked, although PPO plans are available
to be able to see any doctor without referrals. I think Medigap supplements are great choices for many people, but MA plans can also be good choices
depending on your feelings about managed care. DW is on plan N supplement and I am on an MA PPO plan. We both like our choices.
Strongly disagree. The big difference between employer group insurance plans and MA plans is this: employees can appeal to their employer to pay denied claims. A good employer, who wants to keep a good employee, may well agree. There is no such incentive or relationship between an insured and insurer with MA plans.
Incentives influence outcomes in U.S. healthcare.
There are very good MA plans, there are awful MA plans, you often don’t know until it’s too late if you’re in a good one or a bad one (because when they start rejecting your expensive claims, it’s too late)
You can’t know whether your good plan will get turned into an awful plan (because the Ins Co has the power to change your plan over time).
Given the general pop around here it’s not awfully surprising that people lean away from taking on the risk.
That comparison may not hold well, depending on how good your employer’s plan was. I never had an issue with choosing a specialist, with recommended care, or with emergency treatment abroad.
I grew up in Hanover NH in the 60s thru the 70s. The hospital system was decades ahead of its time as the physicians in the area worked for the hospital system. We did not have to go through a PCP to see a specialist. Since my parents were a pharmacist and a nurse they knew what type of specialist to see if a medical problem presented itself. My decades working as a Physical Therapist gave me insight into the many changes in the healthcare system. In my later years I used to remind my patients that I was both a healthcare provider and recipient, and felt the healthcare system was broken on both sides. For decades I looked forward to the time where I could have healthcare insurance which would allow me to make my own informed decisions as to when I needed to see a specialist, and which one to see, as it was when I was growing up. That finally occurred when I turned 66 and chose traditional Medicare with a plan G supplement. I gladly pay the higher premium as the price for freedom of choice.
MA is fine if you play by the rules and accept the managed care aspect. They use all the things people claim to hate in pre Medicare plans.
However, MA are on thin ice and are at risk for lower subsidies from Medicare.
Several audits claim they are being overpaid based on the health status of enrollees. If anything is done to reduce those Medicare payments, benefits will go down or premiums will go up or both.
It would certainly explain how they’re avoiding the statistical issues in what’s presented by Medicare Advantage plans.
We were fortunate to have never even considered a Medicare Advantage plan. My wife is NYC retiree and the NYCERs retirement plan and the advisors who meet with retirees to explain the options are excellent! They will almost laugh at you for considering a MA alternative (but will explain the pros and cons).
A few people we know with MA plans cite benefits like free gym memberships and as long as they don’t have serious health issues, these plans may be FREE and fine.
The supplemental plan and drug plan offered by NyCERs are very good and fairly inexpensive to cover both of us. Additionally, the NYCERs plan reimburses us for our Medicare Part B premiums AND any IRMMA premiums we are charged.
yeah, we will pay for our own gym membership at Lifetime, where we can play pickleball whenever we want.
As a physician in the hospital we call the Advantage plans the “disadvantaged plans”. Rarely can anyone get into acute rehab when needed and nearly all appeals are denied. Beware. Penny wise but pound foolish.
We have had Aetna MA PPO ESA through my wife’s NYC retirement plan for 6 years and have yet to be denied anything including multiple surgeries and rehab.
I’m a few years out, will not consider an Advantage plan.
My general approach has been to own risk where I can. I’ll very likely buy an N plan or a high deductible G plan in retirement (it varies a lot state by state which is the better choice).
Advantage plans seem a bet that you won’t need much care during the portion of your life when the likelihood of needing care explodes. I’m sure there are better Advantage Plans, particularly thru former employers, but I still can’t get past the math, that the bet seems to be in the wrong direction.
That’s my 2 cents, I’d rather own the risk via higher deductibles than sell it to someone else who is motivated to restrict my usage.
When the megacorp terminated the group retiree medical plan, and gave us $3,000/year for medical expenses instead, some friends and I did a bunch of research, and we all opted for Original Medicare plus Medigap (although we didn’t all choose the same Medigap plan).
Fast forward, and the stipend was replaced by a Medicare Advantage plan. It’s actually a pretty good plan, with no limits on choice of doctors or skilled nursing days, but no guarantee it will stay that way, especially given the company’s ongoing reduction in retiree benefits. I took it for one year, and then reverted to a Medigap plan, as David describes. I am unable to change plans as I fail medical underwriting, although I am thinking of checking whether I still fail now my rheumatoid arthritis is in remission.
My wife and I went with original medicare and a supplement for two basic reasons. First, we could afford the supplement premium so that wasn’t an issue. Second, both my wife and I tend to use “worst case” scenarios in our planning. Worst case medical issue, we’d much rather have the choice of medical providers offered by a good supplement than be in a managed care environment. The second reason has already come into play as one of us already has had a cancer diagnosis and our supplement allowed us to seek care out of state at a nationally recognized cancer center of excellence. The results have so far exceeded our expectations, so we’re very glad we had that option.
We opted for cost certainty for the most part. Some exposure to hospitalization deductible and Rx costs remain however, but we can pick the Rx plan that we deem the best coverage annually. No choice on an Advantage plan Rx coverage.
After listening to Lucretia Ryan explain the problems with Medicare Advantage plans on the Teach and Retire Rich podcast (Ep. Name: “Dirty Little Secrets of Medicare Advantage”) I would avoid using one, especially because the rules about switching plans and supplements vary by state. I can appreciate your move though, it sounds like it was worth a gamble.
I would never select a MA plan. They are essentially managed care plans that work as long as you don’t need to use ongoing care especially specialists.
Also, I think the annual out of pocket with MA is north of $8000.
It can be. They often have not too obviously deductibles and co-pays on some services.
I agree. I will concede that I think it’s good that MA plans are available for folks who want one or who can’t afford a good supplement plan premium, I’ll also concede that there’s notably excellent MA plans around if one happens to live in a particular area that has one. But for myself and my wife we greatly prefer having more control over our medical care, the providers we select, and the costs in our retirement.
I don’t know about the choice part, I don’t think more choices are better in this case. How many people sign up for an advantage plan because it’s the only choice they’re shown, or it’s presented overly favorably?
The worst thing we have done since the late 1970s is offering more choices in health care. It doesn’t work, but shifts costs around and confuses people who can’t make the best choice for all conditions. We ALL need to be in the same risk pool to be fair.
You make a good point. Clearly some people will choose based only on the monthly cost consideration or blindly accept a recommendation from a salesman who might not have their best interests in mind. But while that’s unfortunate, I still prefer people having choice over not having choice. But again, I do see your point and you might well be right.
My wife will tell you I spent days performing research before I signed up for Medicare. I highly recommend Medicare for Dummies by Patricia Barry. Her writing is as clear and concise as is possible when trying to explain a governmental program. Also Get What’s Yours for Medicare by Philip Moeller.