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Medigap Plan G vs Medicare Advantage

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Periodic Contributor

Medigap Plan G vs Medicare Advantage

I’m really stuck as to why someone would pay for Medigap  - a United Healthcare AARP premium in my area starts at $147/mo. It doesn’t give you RX coverage (buy Plan D for $12/month), dental (buy a plan for $50/month) or vision.
An AARP United Health Care Medicare Advantage PPO plan costs $30/ month. I get prescription coverage, dental, vision, hearing and fitness coverage. All my doctors and dentists are in the plan too.

My husband and I both turn 65 later this year. We’re both healthy and not on any medication. We typically get an annual physical, bloodwork, and maybe an occasional need to see a dermatologist or orthopedist/PT. 

What’s the value of spending thousands more a year for Medigap? I’ve read all the literature and made the phone calls. The state insurance office Medicare refers me to pushes Medigap. The “independent” insurance agents really are looking to get you on an Advantage program. We’d have to pick United Healthcare to keep our doctors and we’ve also had this insurance from a private employer and it was good insurance.

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Periodic Contributor

In addition to what others said, you need to realize that your health may change over the years. I, for example, got cancer and wanted to be seen at an NIH comprehensive cancer center (as outcomes are better). As I lived out of state for the nearest one (there are none in my state) they only accept one local advantage plan so I wouldn't have been able to be seen there. 

If you later decide you want out of the advantage plan and into traditional medicare (because with health problems supplement G is cheaper) you may not be able to do that as you will have to pass medical underwriting unless you switch out in the first year. If you fail medical underwriting they can (and united health care will) charge you 3x the premium to be able to switch.

 

As you make your decision think about your needs not just now but what they might be when you are, for example, 90.

Periodic Contributor

Thanks! My husband and I are signing up for Medigap G, got our Cigna RX plan, and just purchased Delta Dental PPO insurance-not the AARP version (offers some vision discounts too). Altogether, it’s costing us just over $400/month. That’s roughly 10% of our combined SS checks each month. Retirement comes at a cost.

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Periodic Contributor

While it is more expensive, the main reasons to choose Medigap is Choice. The advantage plans limit your choice in providers.  Another reason why I choose Medigap is the reported denials on the Advantage plans. Advantage is an HMO plan.  (This is 'managed care' and they can decide not to pay for certain procedures.)  I was in an HMO when I was younger and they decided not to allow my daughter to have the latest drug for her medical condition even though her specialist said that this was the best choice at the time.  They wanted her to try some other medication route first (Once again her specialist said this was a waste of time).  I opted to go with the specialists call and paid out of pocket for an expensive drug and I am so glad I did.  Medicare Advantage is calling the shots on your healthcare.  (Which might be OK if you have no medical conditions.)

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Periodic Contributor

Thanks for the insight! We did choose Medigap plan G to avoid these issues. Next we’re looking for dental insurance because Dentegra really isn’t dental insurance.

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Regular Contributor

One thing you have to consider is inflation.  Take your $147/mo plan inflating at a 3% rate for 25 years, along with $226 deductible.  That inflates to $308/mo premium and a $473 annual deductible.  Now take your $0/month Medicare Advantage with a $7500 Max-out-of pocket.  That inflates to a $0 premium and a $15703 max-out-of pocket.  I don't know about you, but that scares the living spit out of me.  What is insurance for anyhow - it gives you peace of mind.  I don't know that having a MA policy would give me peace of mind.  I myself am not retired yet, but I'm looking at a Plan N.  I also looked at a Plan G High Deductible plan which gives a much lower monthly premium and a $2700 deductible - still, I figured that over the years, on average the Plan N was not that much more expensive, all things considered.  If I had to choose today, that's what I would go with for myself.

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Contributor

A few other reasons why I have a Medigap plan instead of Medicare Advantage plan:

 

1)  If you plan to travel outside of your immediate coverage area, most MA plans will provide no coverage while traveling....except for emergency treatment but follow-ups to that emergency treatment are not covered unless you go to your home area to get it.  With my Medicare/medigap policy I have nationwide coverage without any restrictions.

 

2)  Deductibles/Co-Pays/Max Out of Pocket limits can be very high with many Medicare Advantage plans but that UHC-AARP medigap plan you mentioned is (based upon the premium amount) likely a Plan G which has very good coverage.  I have a Plan G and this year I am responsible for the annual Part B deductible which is $226....I have no out of pocket cost for the rest of the year after paying for $226.   With most MA plans, you could be on the hook for $thousands should you need to be hospitalized or have a major health issue, like heart attack, stroke or cancer.  My wife has a MA plan and she got cancer.  The immunotherapy costs alone were $18K every 2 wks....and that's not counting the chemo and radiation costs.  We had to pay $8K last year and again this year before her insurance kicked in anything for it.  If she had my plans we would have had to pay $226 in each of the last 2 years and not a penny more.

 

3)  My Part D Rx premium cost is only $11/month.  What I found out by using the plan search tool on the Medicare.gov website is that, contrary to popular belief, the lowest total annual cost (premiums + Rx costs) Part D plans often are the lowest premium cost plans....not the higher premium cost plans.

 

All I can say is, don't buy on premium costs alone or you will likely end up being highly disappointed.  Make sure you clearly understand what your total cost exposures will be for the options you are considering and look very, very, very closely at the benefits and benefit limitations.  I think you will be surprised by what you find out.

 

Maybe a MA plan might be great for you.  It was for my mother and it (so far) is good for my brother.   So I'm not bashing MA plans.  Just know what coverage you will get before you sign up for it.  And always remember: We do not buy insurance (any kind) because of what our current situation is.  We buy it for the "what if" that might happen in the future.  And as we age through retirement the risk of encountering a major health issue increases pretty significantly.  I prefer to pay a little more (~$200/month for medigap, Part D and dental...vision insurance often is not worth it) for superior coverage now than to pay a lot later for low premium cost coverage now.

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Periodic Contributor

Thanks for the insight. I’m looking closely at what our expenses will be over the next several years. It sounds like, if you can afford Medigap G, by all means, buy that plan. Our financial advisor assured us we can afford the extra $3800/year it will cost us to buy that plus RX, dental and vision plans. But I’m still weighing this idea - unexpected health issues vs known/unexpected home improvement issues. The cost of fixing up a home to sell in the next few years, unexpected septic problems, and even getting into a new, smaller home comes at a price. Our IRA savings can only cover so much.

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Honored Social Butterfly

@Glensab wrote

~$200/month for medigap

===================================

Right now maybe - but how high could it possibly go 

 

Traditionsl Medicare needs to have an annual Out of Pocket max set - then we would have no reason to even have GAP insurance.. 

 

 

It's Always Something . . . . Roseanna Roseannadanna
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Super Contributor

@MaryM373887 

My wife and I pay for medigap plan and drug plans. These were my reasons and I hope someone will correct me if my understanding is wrong.

 

1) With traditional Medicare, there is no "network", so you can go to any doctor that accepts Medicare in any state.
2) With an advantage plan, you should check annually to see if you doctor is still in the network. If not, you'll pay out-of-network costs or find youself a new doctor.
3) If at some point you require a specialist that is not in your advantage plan network, you may have to pay out-of-network costs to get that care.
4) With traditional Medicare, you don't need to get a referral to visit another doctor unless that doctor requires it.
5) If you start with an advantage plan, health issues that develop may make it expensive or impossible to switch back to regular Medicare.

 

I understand why an advantage plan is appealing with its increased coverage and (typically) $0 dollar premium. I am willing to pay extra for the freedom of choice and peace of mind I get with traditional Medicare.

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Periodic Contributor

Thanks for the insight. I’m looking closely at what our expenses will be over the next several years. It sounds like, if you can afford Medigap G, by all means, buy that plan. Our financial advisor assured us we can afford the extra $3800/year it will cost us to buy that plus RX, dental and vision plans. But I’m still weighing this idea - unexpected health issues vs known/unexpected home improvement issues. The cost of fixing up a home to sell in the next few years, unexpected septic problems, and even getting into a new, smaller home comes at a price. Our IRA savings can only cover so much

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