IT PAYS TO KNOW - MEDICARE MEDIGAP PLANS

[GailL1]

Recently I came upon an 86 year old beneficiary that was paying over $ 800 a month for her MediGAP plan.  The beneficiary had had this plan since 1st signing up for this coverage along with Medicare Part A & B.  Unreal, right - yes, but it could have been taken care of many years ago IF only the beneficiary was aware of the problem and the solution.

This beneficiary was still on one of the MediGAP plans that had been discontinued from new sales many years ago.  So needless to say, those remaining in this plan were now older, most likely sicker and fewer in number.  So, that is part 1 of the higher premiums.

The state where she lived had also passed some laws during past years concerning coverage under MediGAP plans - the state expanded the choices of MediGAP plans to those less than 65 years old and Medicare eligible because of a disability - this makes premiums higher in every plan affected because it is adding more risk to the insurer.  So that’s part 2 of why there was some possible increase in premiums thru the years.

This state had also passed a “birthday rule” expanding the ability of beneficiary’s in the state to switch MediGAP plans WITHOUT underwriting.  That’s part 3 of the increase in premiums since this too adds risk and cost to the insurers.  But this is also the solution to this beneficiary and these astronomical premiums.

State law governs much of how MediGAP plans work - the Feds outline the benefits of each plan codified by law but state law governs other rules which they can make - like who is covered, choice of plans if under 65 and what stipulations are set into place for being able to switch a MediGAP plan.  

The 86 year old beneficiary described above will exert her Medicare rights in her state and switch plans around her birthday in 2025 and will pick another one of equal or lesser value and thus cut a great deal off her monthly premiums.

PAYS TO KNOW - now who could have helped, when asked:  

• a knowledgeable friend or family member
• a Medicare plan broker
• a SHIP volunteer or paid state worker

and none of these charge a fee to the beneficiary.  

[Tonster521]

@GailL1 Very good advice.

[JamesH377174]

 Please keep us informed of your progress, hopefully Maryland and doesn't let AARP/UHC get away with it. I trusted AARP to look out for seniors when I signed up for their policy, what a huge mistake I made. 

[GailL1]

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@JamesH377174 wrote:

 Please keep us informed of your progress, hopefully Maryland and doesn't let AARP/UHC get away with it. I trusted AARP to look out for seniors when I signed up for their policy, what a huge mistake I made. 

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My OP does not have anything to do with AARP or AARP/UHC - what I am trying to say is that beneficiaries or their appointed decision-makers need to stay abreast of changes and act accordingly when need be.  OR have someone trusted from the list I provided of professionals that can help them determine their options.

In the case of this beneficiary, it only took (1) knowledgeable person to fix this mess - in fact, the beneficiary, since she can apply afford it,  decided on a HIGH DEDUCTIBLE Plan G as her new coverage and has reduced her premiums from over $ 800 a month to $ 100 a month with a (2024) $ 2800 deductible.  She is very happy.

Medicare.gov - Choosing A Medigap Policy (2024) 

[RussellP197074]

This sounds like Maryland's new Birthday rule.  I've just been through this in the last few days.  I came here to warn Maryland residents about AARP/UHC's understanding of the Birthday Rule.  I have been on AARP/UHC's Plan F since 2017.  The premiums have been going ever higher, and then in June they started taking the auto premiums separately for me and my wife.  At the same time they increased the premiums a total of 17.85% over the last three months, incrementally, like I wouldn't notice!  So I sent an email to them asking about switching down to a Plan G and how much it would save in monthly premiums.  I got a response from someone saying that I don't qualify for the Birthday Rule, because I initially got on the Plan F before 7/1/2023, which is the date the Birthday Rule went into effect.  If I did want to switch to G, I could but I would have to go through underwriting.  The premiums she quoted would be about $22/month cheaper.  Going from Plan F to G would mean I have to pay $240/year deductible where I had no deductible with F.  That's $20/month mathmatically.

I filed a complaint with the MD AG's office so they could look into the matter and provide clarification to either me or AARP or both of us. In the meantime I contacted the SHIP people in my county and I have an appointment to go over options with other companies providing GAP policies that according to SHIP (via telephone) would cost mush less than AARP/UHC.

AARP may delete this post, so copy it if you want to be able to see it.  If they don't delete it, I will be back to update it if and when I hear from the state or AARP or make a change with SHIP.

[GailL1]

@RussellP197074 

Understanding the law in Maryland and how it applies to you and your Medigap coverage changes is very important.  

Maryland.gov - Dept of Insurance Administration  - CONSUMER ADVISORY- MARYLAND LAW ALLOWS FOR AN ADD...

Maryland.gov - Dept of Insurance Administration - Medicare Supplement FAQs as of 09/13/2023 

Maryland Birthday Rule FAQ begin on page 11- can change to an equal or lesser plan only and only with the SAME insurer among other things. 

Medigap Birthday Rules or state extended medigap guaranteed issue periods vary by state and the rules are specific to that state.

IT PAYS TO KNOW - 

[Tonster521]

@RussellP197074 As you know, Plan F has not been available for new enrollment since 2020. As I recall, folks in Plan F were offered an option to enroll in another Plan such as Plan G or Plan N at that time. It appears you opted to stay in Plan F which is, in effect, a "first dollar coverage" Plan when paired along with Medicare Parts A and B. This is expensive coverage for both Medicare and Plan F because it increases utilization. Essentially, it costs nothing to go to the doctor. So, those costs will be covered by the premium. With less folks to spread that increased cost to, the premium has only one way to go and that is up. Also, Plan F is an older group of people and people tend to have more medical issues (morbidity) with age.The 2 to 3 million people per year attaining age 65 and Medicare eligibility cannot elect Plan F since 2020. I suspect Plan G is elected most of the time. The increased enrollment in Plan G has probably increased utilization; and with more aging folks, increased morbidity (medical issues). So, as you pointed out, there is not much difference in the premiums between Plans F and G except for the Part B deductible. Hopefully the SHIP person can offer some solutions. I would also reach out to an independent insurance agent that offers several different Plans that may help. Another approach is to consider a Medicare Advantage Plan and save the difference in premiums to pay for that Plan's deductible, co-pays, and/or coinsurance. It is self insuring some of your medical/hospital costs. However, if you are not incurring large medical/hospital costs, the savings may add up over time.

[RussellP197074]

I would never recommend an Advantage plan to anyone.  There is more to it than just the cost.  An Advantage Plan requires prior authorization for almost every procedure, and often they get denied or at least delayed.

Also, with regard to the difference between premiums for Plans F & G, there is a value for not having to deal with receiving bills that have to be paid, no matter how small, and processing the payments, however you do it.  The difference between premiums staying within AARP/UHC is roughly $2/month.  If having a G plan truly gives incentive to be more selective in seeing a Dr, that difference in AARP/UHC's actual cost savings should be much greater than $2/month.  I don't see Dr's any more than I need to, and my wife is the same way.  I wouldn't consider changing to a G plan unless it could save at least $10/month, and probably won't even for much more. I have a feeling that when we get the information we are looking for, we will find that, by changing companies, we will save a considerable amount even staying in F, and the option to switch into a G with a different company will save much more than $2/month more than their F plan would. And we may very well get a greater discount by both of us having the same coverage, which AARP does not offer.

[GailL1]

@RussellP197074 wrote

I would never recommend an Advantage plan to anyone.  There is more to it than just the cost.  An Advantage Plan requires prior authorization for almost every procedure, and often they get denied or at least delayed.

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Then what plan would you suggest to a person that cannot afford a Medigap plan?  or to a beneficiary that doesn’t want to pay out a large premium every month when they aren’t using much if any of the benefits of Medicare?

Medicare Advantage is an option of care - A CHOICE  - the plans cover everything that Medicare covers albeit in a different way.  Medicare Advantage plans are managed care - that’s how they offer the coverage in a lesser to sometimes no premium.  

All care under Medicare has to be medically necessary - any questioning of this by a MA plan or Traditional Medicare has to be based on Medical necessity and the medically based best practices.  MA plans just enforces this in a different way than Traditional Medicare - but Traditional Medicare can also do this too and does - 

CMS.gov -Medicare Coverage 

In a MA plan, nce a person has met their per plan annual out of pocket, the plan pays all cost for the reminder of the year; then it starts over.  This differs from Traditional Medicare which has no maximum out of pocket thus the need for some type of financial protection for most people.  Some have Medicaid or some other type of coverage to protect them against a medical financial catastrophe, some have a Medigap plan that picks up some of the cost as described by each plan type.  Others have a MA plan to do the same.  

Many people are very accustomed to this type of coveragefrom their previous employment - MA plans come in an assortment of styles from PPO plans to HMO’s - some contain extra benefits that some beneficiaries find very helpful to themselves; benefits that aren’t covered at all by Traditional Medicare.  Some are designed specifically by CMS for specific beneficiary enrollment, called Special Needs Plans.  Plans are also rated by stars by CMS - 

Problem is that beneficiaries sometimes use the wrong measure to pick their MA plan or sometimes there isn’t too much of a choice available since availability is based on area.  

How much do you think Medicare premiums would be (whether payroll tax for Part A or by premiums for Part A or Part B) if Traditional Medicare paid 100%?  How much would premiums be if it had an annual out of pocket?  and what would that annual out of pocket cost be?  Would most beneficiaries be able to even meet this out of pocket cost?  Probably not, just more would go on the Medicaid rolls of being dual eligible.

Course, that would eliminate a need for any medical financial protection plans like MA or Medigap.

so if we eliminated both MA plans and Medigap plans - could you meet the cost of your Traditional Medicare ?  Wonder how many other could especially if their 20% of the Medicare cost is really really astronomical which it could be.

[RussellP197074]

The YouTube channel, "Medicare School", does a good job of comparing the differences of the more popular plans, including MA.  The MOOP(Max Out Of Pocket) is much higher than most Medigap plans.  Most people get into MA plans because they "never get sick".  Good luck with that. 

If you can afford a good MediGap plan, it's probably the best long term insurance you can get, especially a G or F(if you turned 65 before 2020).  Do your homework and check out what a private health insurance plan would cost you per month just for hospitalization, then add $165/month (equivalent to your Part B monthly premium).  The total is probably about what CMS is paying your MA plan to cover you.  People usually get into MA's because they don't have any issues.  That means the MA plans are making money like crazy.  Then when you start needing services, you have to get prior approval for anything that might cost the plan a substantial amount.  People have been known to die before they get the services they are waiting for.  I know it's not a true story but there are examples in the nature of the plot of the movie "The Rainmaker".  If you haven't seen it, watch it before you turn 65.

[Tonster521]

@RussellP197074  I hope you read the statistics from the Center for Medicare and Medicare Services (CMS). This was a link that I previously included in a reply to you and for other readers to read as well. There are over 30 million folks in Medicare Advantage Plans or Part C (i.e., PPO, HMO, Special Needs, etc.). To say most people get into MA because they "never get sick" is naive. As we attain age, the probability of sickness (morbidity) is greater than the probability of death. I think the MOOP (stop loss provision) with little to no monthly premium is attractive for most folks. 

Shopping for a Medigap (medicare supplement) and Medicare Advantage Plan is not easy. There may be differences in the premium from Company to Company for the same Plan. Also, Plans subject to annual guaranteed issue provisions such as the Birthday Rule in Maryland will be more costly due to adverse risk. One has to find a Plan with the least amount of adverse risk. Then again, that may be short lived since the rest of the folks will eventually become aware of a lower premium for the same coverage and transfer Plans and/or Companies. Some folks view this as a huge headache and find it much easier to self insure deductibles, co pays, and coinsurance  and pay those expenses when they are needed. Look at the example that Gail1 provided wherein premium savings of about $700/month or about $8,400/year will be realized in exchange for a high deductible Medigap G with a $2,800 deductible. My suggestion is to work with your SHIP rep. and insurance broker(s) even if the insurance broker receives a commission based on the policy that he/she recommends. That advice, service, and relationship may pay dividends for years. That is worth significantly more than a You Tube video.

With regard to putting a value on health insurance benefits after age 65, Medicare charges $505/month in 2024 for Part A coverage if one does not meet the eligibility requirements. The monthly contribution for Part B in 2024 is $174/month. It could be greater is subject to an Income Related Monthly Adjustment Amount (IRMAA). You should be aware that the $174 number represents about 25% of the projected cost for Part B or $696/month. So, you need to add any Part D (RX drug cost) and dental/vision plans that one may buy. One may self insure dental/vision since those expenses are generally not catastrophic.  At any rate, the costs for Parts A,B, D, and dental/vision may exceed $1,200/month..This is a low estimate inasmuch as i have not used a monthly cost for Part D and dental.vision. 

[RussellP197074]

Yes, it is easier to select a plan that costs no money up front. After it is selected is when the headache or potential headache begins.  I've had Plan F since 2017, and a few years later my wife joined me with the same plan F.  Believe me when I say, there is nothing easier then having absolutely no expenses other than prescriptions (which is something totally different), for the whole year.  We don't over use medical care like so many are afraid people would. I think we've actually paid so much more than we have utilized, although that statement would be difficult to prove, since we never get a bill.  We purchased our home with a reverse mortgage so we have no payments.  It would be better if we had a paid off mortgage, but that wasn't possible for us.  The 2008/9 housing market killed our retirement plans, and forced us to use our 401K money to purchase a house with a reverse mortgage, since there wasn't enough in there to buy a house that way and pay off debts but not enough to cover mortgage payments and debt payments, relying on 401K plus SS.  We both worked in good paying jobs all our life, so our SS incomes are almost at max possible.   I wish everyone else was doing as well in retirement.  There was only one thing that could bankrupt us in the future and that would be a catastrophic medical issue. Plan F or G was the answer.  At the time we were planning, I had heard about Medicare Advantage and I looked at the pluses and minuses, and determined the minuses were too risky. Man makes plans and God laughs. It's more expensive up front, but it eliminates the future risk by going with a supplement like F or G.  N is still there for people who can't afford higher premiums, but there is still a possibility of having high Out Of Pocket expenses down the road.  If you feel capable of living with the potential expense later on, it is a better long term answer to MA with its requirements for prior authorizations, along with denials and delays, as well as more and more providers(Hospitals, Drs, etc.) refusing to take MA.

[Tonster521]

@RussellP197074 There is nothing wrong with the various approaches that are available (i.e., Medicare only, Medicare + Medigap, Medicare Advantage). Folks will make their decision based on a variety of factors just like you did. Some folks are more knowledgeable about the benefit provisions, costs, monthly premiums (if any), etc. They will select a Plan based on the above factors whereas others may select based on monthly premium only. The point is that there is no "one size fits all". 

For folks that have the wherewithal, such as yourself, selecting a "first dollar coverage" Plan may initially appear a great deal. However, as time and age creep up on all of us, the monthly premium creeps up as well. That increase is the reason why you have posted, shouting out a warning to others who may be experiencing increased premiums. As you may not be aware, State Departments of Insurance review and approve premium increases. That is why Maryland Insurance Administration (MIA) created the "Birthday Rule" which provides folks with an option to select a different Plan. Why on your birthday? Some Plans develop monthly premiums based on your age. So, when you attain the next age bracket, your premium will increase based on that Plans projected costs which are tracked as well as utilization. As you pointed out, you may not be using the Plan's benefits. However, other folks may be using the Plan's benefits which you are paying for with an increased premium. Moreover, Plan F is shrinking in size since 2020 and deaths of the folks that remained in Plan F. So, I am sure the SHIP rep. and/or insurance broker will suggest you consider a different Plan and start self insuring some amounts of deductibles, coinsurance, and/or copays. Or, just continue your Plan F coverage and pay the ever increasing monthly premiums.

Also, Traditional Medicare (TM) does not cover every product and service that one may receive. There are protocols that providers must follow. TM denies benefits that are deemed not medically necessary. TM carefully reviews requests for durable medical equipment, lab work, MRI, etc. Some providers are requesting that patients sign an Agreement to Pay should TM deny benefits. I think most folks would like to know upfront (prior authorization) if the product and/or service that they may receive will be covered.  Good Luck.  

[RussellP197074]

We will be continuing Plan F with a different company, saving us combined about $180/month.  That's over $2k/yr.  We can always wait until another birthday rolls around and go from Plan F to plan G, when and if the difference in premium dictates a change.  There is a certain value in terms of monthly premiums differences to choose one that negates the effort to make sure we have the available cash on hand for co-pays or bills until the deductible is met at the beginning of each year.  Right now the difference in premiums is negligible.

By the way, I used the medicare sight to see what the premiums would be if I were 10 years older than I am now and the premiums would still be less than AARP's.

[Tonster521]

@RussellP197074 Your Primary Care Physician is an important factor in navigating with any Plan. In fact, your Primary Care Physician may already be contracted with a number of Medicare Advantage Plans. Some Physicians display at their front desk the various Plans that they are contracted with. If not, folks need to ask. I am including a link to statistics from the CMS https://data.cms.gov/summary-statistics-on-beneficiary-enrollment/medicare-and-medicaid-reports/medi... It appears that just over 50% of Medicare Eligible are covered via Medicare Advantage. From time to time, I hear or read about folks that have had a negative experience with their Medicare Advantage Plan. However, I do not find any statistics from the CMS that support such alleged issues. A MA Plan is a possible solution to ever increasing premiums with Medigap policies. Good Luck.  

[RussellP197074]

Many healthcare providers have started to drop MA plans for coverage, because of payment delays and other issues, as well as failure to get authorization for recommended procedures.  You'll see this in the YouTube channels I recommended in the other post.

[RussellP197074]

I strongly recommend anybody considering MA plans or anyone about to start in medicare, to check out a couple YouTube channels that will compare regular Medicare to MA, and give you the Pros and cons of each.  Once in MA, the only way to go to the other side is through underwriting, and if you have something as small as Pre-Diabetes, you will have trouble switching.

Two of the channels are (I won't provide links, just search within YouTube):

Medicare School

Christopher Westfall

Watch these and make up your own mind before talking to a broker.  remember, Brokers get paid by the carriers you select through them and when you select Medicare Advantage, they get paid more.

[RussellP197074]

Once you are in an Advantage Plan, if you come down with any costly illness or need accident rehab, the costs can be exceptionally high.  You cannot switch back to A,B and Gap without going through underwriting, except maybe in a few states, where the premiums are through the roof.  Having an Advantage plan is comparable to going without life insurance, finding out you have a month to live, and finding out the hard way you can't cover your family by buying life insurance at the last minute.  You have to pay more than you benefit from early on, so that you're covered if and when it hits the fan.  It's called the cost of peace of mind.

[RussellP197074]

I forgot to add that every time AARP had raised our premiums, they used the excuse that we were paying a discounted rate, and the discounts were decreasing, not that the premiums were increasing.  The discounts were supposed to be introductory in nature.  After 7 years?  I doubt it.  

[JamesH377174]

 The whole thing is a racket and it is called Closing Books of Business, it should not be allowed. 

[RaeC173749]

GailL1, your post highlights a crucial issue many Medicare beneficiaries face. It's alarming that someone was paying $800 monthly for a Medigap plan due to outdated coverage and lack of awareness. Your breakdown of the factors contributing to high premiums - discontinued plans, expanded coverage for under-65s, and the "birthday rule" - is informative. The case study effectively illustrates why it's essential for seniors to regularly review their Medicare coverage. Your advice about using state-specific rules to switch plans without underwriting is valuable. This post serves as an important reminder for beneficiaries to stay informed about their options and potential cost-saving opportunities.