True Freedom (Medicare Supplement)

Do you wish you could go back to the 80s? It would probably depend on who you ask and their circumstances at the time? We started with double digit interest rates but finished with a booming economy. By 1980, Medicare was an engrained entitlement program in America. Even though Medicare gave relief, there was hunger from Medicare recipients to get more costs covered. Before there was Medicare Part C or D, there was Medicare supplements or Medigap. Medigap can be traced back to 1980 through legislation called the “Baucus Amendment”. This allowed private healthcare companies to compete in the Medicare market for the first time. To understand supplements, look at the name itself. It is supplementing the costs that are leftover that Medicare does not cover. Medicare pays first and the supplement pays second. There are little to no expenses after the premium for the supplement plan is paid. That is the financial security that many Medicare beneficiaries have been choosing for decades. The two most popular supplement plans right now are plans G and N. Plan G covers everything that Medicare does not except the Medicare Part B deductible of $233 per year. Plan N does the same except the recipient would be responsible for a $20 copay at the doctor office and $50 copay at emergency room in addition to the Part B deductible. I do not think it is necessary to explain every supplement plan that has ever existed. That would take too long and would probably get somewhat boring. Check out Medicare.gov If you want to learn the ins and outs of different supplement plans. I would rather talk about strategy and philosophy when it comes to Medicare supplements. There are generally two schools of thought, at least when it comes to agents selling Medicare products. The first camp is supplements all the way. Matter fact this group usually wants nothing to do with Medicare advantage. I can understand this philosophy for several reasons. Supplements do not have networks, required referrals, or coinsurance. There is a simplicity that truly is freedom. I am sure its a wonderful feeling knowing there will be no unexpected medical bills popping up. Another positive is that there is no medical underwriting when a recipient turnes 65 or enrolls in Medicare part B for the first time. This makes the application process straight forward and easy. In my humble opinion, Medicare supplements are the best option for those who will not struggle to pay the premiums long term. We have hit the highlights of the advantages of supplement plans. Unfortunately, we need to talk about the Achilles heel. It does not matter what company is offering a supplement plan, they all have one thing in common, the price goes up the older the recipient grows. I have met some older potential clients that were paying north of $400 a month in premiums. That is not including their Part D and Part B premiums! This can quickly get out of hand for seniors that have no income outside social security. Therefore, I will either recommend a supplement or a Medicare Advantage plan depending on each particular situation. Sometimes recipients will be paying more in supplement premiums then the maximum out of pocket for a Medicare advantage plan. This obviously does not make sense. Most people will never meet their maximum out of pocket maximums and Part D is usually included most advantage plans. Not to mention most advantage plans have zero or low premiums.

The other problem is medical underwriting. Certain health conditions may prevent you from joining or switching supplement plans outside the initial enrollment. Plan F is a supplement plan that pays everything that Medicare does not. Plan F was extremely popular for well over a decade. Plan F is now no longer offered and wil not accept new Medicre beneficiares. Those currently enrolled in a plan F may keep the plan, although insurance companies are making it painful for them to keep it. Companies are raising the premiums for a plan F at a faster rate than other plans. Those who have many health issues may be stuck in their Plan F due to not medically qualifying for another plan. Their only option is to pay extremely high premiums or drop the plan. This is painful decision for those who have grown to love no unexpected medical bills. Supplement plans will always be popular no matter how much of the market share advantage plans receive. They are easy to understand and they really do provide “True Freedom”. Medicare beneficiaries love no medical bills, no networks, no refferals. Let me know your thoughts in the comment section. Do you prefer a Medicare supplement or a Medicare advantage plan? If you are in North Carolina and need Medicare guidance, you can contact me through ncseniorsolutions.com