Medicare Advantage Plans vs. Medicare Supplement Plans Which is more insurance? Which type of plan is more likely to cover your medical expenses when you’re sick or injured?
I will answer that question for you in this video plus I am going to reveal one of the most common misunderstandings about Medicare Advantage PPOs if you stay into the end,
I will reveal the most common mistake that I see people make with their Medicare and the consequences of that mistake that they face years down the road So Stay Tuned Medicare Advantage Plans vs Medicare Supplement Plans
Hi, I’m Matthew Claassen with MedigapSeminars.org My company is an independent insurance brokerage and specializing in Medicare and retirement needs.
We help people with their Medicare decisions in virtually every state of the country. We work with all Medicare Supplement Plans and we also work with Medicare Advantage Plans, and of course prescription drug plans in 49 states. Our services are free to you, the consumer. You don’t pay us! We’re paid by the insurance company when we help you with your application.
This video, like all my videos, has no advertisements. We do not generate revenue by you just watching this video. Our business is to help you with your Medicare and was paid by the insurance company when we help you with your application. So please contact us for personalized advice and private consultations. Let’s get started on comparing Medicare Advantage Plans vs.
Medicare Supplement Plans. There are several hurdles that I see when trying to compare Medicare Advantage plans to Medicare Supplement Plans. The most glaring hurdle is that we’re comparing apples to oranges. These two types of Medicare plans approach your healthcare from two very different perspectives. You, as a consumer, should step back and look at these choices as two completely different ways of receiving your Health Care.
However, for the sake of our first comparison, we’re going to assume that we’re comparing apples to apples.
We will assume that they have no difference in how you receive your Health Care. The first step to comparing different Health Care plans is to compare your maximum annual out-of-pocket limit. That is supposedly the most money that you risk for inpatient or outpatient care during a calendar year. You want to determine financially, what is the worst-case scenario?
Keep in mind the entire objective of Health Insurance is to create a financial safety net. It is to make certain that a medical event does not result in a financial catastrophe. Comparing the maximum annual out-of-pocket expenses is a way of evaluating how well your insurance serves that purpose. so a star with Medicare Advantage HMOs and PPOs. when you are evaluating a Medicare Advantage plan the first document that you want a look at is called a Summary of Benefits.
The Summary of Benefits reviews the deductibles and copays and your maximum annual out-of-pocket. It reviews the financial risk that you are potentially responsible for when you receive your Health Care. Every year CMS sets the maximum out-of-pocket limits for in-network and out-of-network expenses paid by the consumer.
In 2022 the Maximum Out-of-Pocket that an insurance company can set for their Medicare Advantage plan is $7,550 annually for In-Network Services and $11,300 Out of Network Services. Insurance companies can still choose to have a lower limit but they cannot have a higher out-of-pocket limit.
When you look at the summary benefits, the graphic design and layout of a Summary of Benefits differ with each insurance company. However, somewhere in the first few pages of the summary of benefits before it gets into the nitty-gritty details of copay as per procedure, there should be a page like this one that documents the maximum out of pocket for the year We can tell this is a PPO, first because I didn’t blur out the regional PPO designation in the upper right. That’s a pretty bi hint. But also because it shows out of pocket for both in-network and out of Network Medical Services. An HMO will just show in-network maximums and not even mention out-of-network.
That is because HMOs do not typically offer any out-of-network benefits. If you have an HMO you are typical, not always but typically, responsible for all expenses incurred when not in a network.
Of course, the exception is emergency care. So in this case we see a $6,700 maximum out of pocket for in Network Services on a $10,000 maximum out of pocket for out of Network Services. And there are a few other critical pieces of information that are just casually mentioned on this page and to be easily overlooked.
But can have a huge impact on your pocketbook. First, please know that with all Medicare Advantage Plans the maximum out-of-pocket limit does not include any Part D prescription drug costs, premiums, or deductibles. Those costs are always in addition to inpatient and outpatient services. It doesn’t include the cost that you pay for Medicare Part B. It doesn’t include any premiums.
It is for inpatient and outpatient services. The Maximum Out-of-Pocket only refers to inpatient and outpatient services. Medical bills, not premiums, not anything to do with Part D. There are two other details we need to point out before we move on. Note that these out of pocket limits only refer to Cover Services.
If the service is not covered by the plan the cost of that service is in addition to any Maximum Out-of-Pocket limits.
More on that later. Also, I mentioned at the start that I would reveal the most common misunderstanding about Medicare PPOs. Well, here it is! You’ll hear agents tell you that with a Medicare Advantage PPO you “can see” any doctor or go to any medical facility.
If the provider is out of network it’ll simply cost you more and have a higher Maximum Out-of-Pocket. In reality, if you wanna see a medical provider that is out of network you can ask them if they will accept your insurance. They can, and usually do, say “No”.
To put it simply you can see any Out of Network Medical provider and be covered by your Medicare Advantage PPO but only with the Medicare provider’s approval. An Out of Network provider does not have to accept your insurance.
You cannot simply go to a medical facility and demand to be covered as out of network. Typically, if you have an existing relationship with the doctor prior to starting Medicare, they will often continue that relationship. Even if your insurance is out of network. Still, you must get their acceptance, of course. But that’s almost the only time that I’ve seen medical providers accept out of Network Insurance.
Almost. So please do not assume that just because you can ask a doctor to accept your insurance as an out-of-network provider they will accept you. As one doctor told me; “If they wanted to work with that insurance company, they would contract that insurance company.” If they do contract with that particular insurance company, it is because they don’t want to work with them. Here’s another example of a page out of the Summary of Benefits.
I wanted to show this because the out-of-pocket limits are the maximum allowed by Medicare for 2022.
Medicare sets the maximum allowed. Insurance companies can choose a lesser amount. And as an aside in 2020 the maximum allowed was $6,700. So it’s increased 12% since then.
It will continue to increase in the years ahead. Remember, these plans change every year. Now let’s look at Medicare supplement plans What are the out-of-pocket annual limits for a Medicare supplement plan? I have a 15-minute video on that subject where I showed how many agents and individuals misinterpret the information provided by Medicare and why. It would be worthwhile to see that video.
I have linked it down in the description below, as well as just above my left shoulder. I am going to give you the Cliff notes version here, using the three most popular plans a Medicare supplement Plan G, Medicare supplement plan N, and the Medicare supplement Plan G-HD or F high deductible. With the Medicare Supplement Plan G, the only expense for inpatient and outpatient services is the annual Medicare Part B deductible. That annual deductible is just over $200 Which is the maximum annual out-of-pocket limit you’re at risk for with a Medicare supplement Plan G. Just over $200.
For the Medicare supplement Plan N, you’ll also have the annual Medicare Part B deductible plus you’ll pay up to a $20 copay whenever you see a doctor for a diagnosis or evaluation.
There is no copay for chemotherapy or physical therapy or preventive care. Just diagnosis and evaluations. There’s a $50 copay for emergency room (ER) visits. Although none of us typically know how often we are going to see a doctor during a calendar year.
But it would be unlikely that would we would see a doctor once every month. This is very reasonable to expect a maximum out-of-pocket exposure with the Plan N to be no more than ~ $500. That would be the Part B deductible plus a monthly office visit to the doctor. A $500 annual limit is more than reasonable. The high deductible plan is very simple to evaluate.
Your maximum annual out-of-pocket limit is equal to the deductible. That deductible increases each year with inflation. It is currently $2,490 for 2022. It’s going to go up every year with your CPI-U. Your Urban CPI.
To Review: with a Plan G, your maximum annual out of pocket is just over $200.
With a Medicare supplement Plan N, even with excessive office visits, you’re not likely to reach $500 out of pocket annually. With your high deductible plans, your financial risk is the deductible which is currently $2,490. and increasing each year with inflation It is quite clear that your maximum financial risk with the Medicare supplement plan is substantially lower than the maximum $7,550 to $11,300 dollars out of pocket that you risk with as Advantage plan. Even with Medicare Advantage Plans that choose to use lower Maximum Out-of-Pocket limits, I’ve never seen them as low as the high deductible Medicare supplement.
So there really is no comparison. A Medicare supplement plan offers significantly more insurance protection than the Advantage Plan.
They are not even close. Yes, there are some HMOs that have some low maximum annual our pockets, almost as the Medigap high deductible plans. But, as I mentioned in my Medicare Advantage Plans Explained video, you have to pay something for that.
In the case of HMOs, you are much more restricted in who you get to see. Anyway, this is all part of why we encourage people to first look at Medicare Supplement Plans Only consider an Advantage Plan if there are no supplement plans that fit your budget. That happens for some people. That analysis of course is assuming that we’re comparing apples to apples.
It assumes that the services you get with the Medicare Advantage plan will be the same as you get with the Original Medicare.
I know the Medicare Advantage Plans are supposed to cover the same procedures and care that would be covered under Original Medicare Parts A & Part B, inpatient and outpatient services. In reality that is just not always the case. So this is where I am going to prove it to you. And I have Linked all of this stuff below. It’s not just my opinion.
So how are they different? Medicare supplement plans are in addition to your Medicare A in your Medicare B, Medicare Part A, and Part B also call the Original Medicare. Original Medicare remains your primary insurer. The supplement ads benefit to reduce yours out of pocket liability.
When you get a supplement plant you keep the two most important benefits of Original Medicare.
Those two benefits are that first you can see any doctor, any provider, go to any medical facility in the United States or its territories as long as they accept Original Medicare. Which is 95% + them. If there’s a Medicare doctor or clinic that will save your life but there are 1000 miles away your insurance will cover you. Medicare will not pay for your travel or your lodging but your Health Care is covered. The second important benefit is that no insurance company has any say in your care It’s Medicare’s intent to cover everything this medically necessary.
Your Medicare supplement has no say in determining medical necessity. It is between you and your doctor. We are often asked why doesn’t, or why don’t Medicare Supplement Plans have Star Ratings? The answers are because the supplement plan is entirely removed from the decision-making process. All decisions are made between you and your doctor.
If it’s medically necessary, Medicare will cover it. If Medicare covers it, your supplement is required to pay its portion of your bill.
There are some odd things here and there that Medicare won’t cover. They will not cover acupuncture (they do now) They don’t cover experimental treatments from well but they don’t cover most experimental or unusual treatments Certainly not what they call alternative medicine. You want to contrast what I just said with how your Medicare Advantage plan works.
you know of a Medicare Advantage plan that replaces your original Medicare. it is the actuarial equivalent of Medicare Part A & in Part B without a supplement. It’s not a supplement! It’s a replacement! You give up the two greatest benefits of Original Medicare that I just covered.
and when you have a Medicare Advantage plan Medicare is no longer in the picture. It is replaced by a private for-profit insurance company that then gets to decide your Medical Care.
The insurance company defines the network of doctors and medical facilities that you get to stay within plus your Dr. Must get approval from the insurance company for any procedure or treatment. It’s called Prior Authorization.
We are going to have some surprising stuff on that and more on that a moment. So, as I said earlier, I have linked below two articles that you should read If you’re considering a Medicare Advantage Plan. The first as a result of a three-year study of Medicare Advantage Plans by the Inspector General for health and human services.
They’re the ones that monitor Medicare The other is a plea for help in a letter from the American Hospital association to Medicare I am going to go through this quickly. It’s a cliff notes version.
For more details please see my Medicare Advantage Plans Explained video also linked above and below. The audit by the Inspector General was a three-year study of Medicare Advantage Plans; to 2014, 2015, and 2016 report was published in 2018. They found that more than half of the Medicare Advantage Plans Denied necessary Medical Services that would’ve been approved under Original Medicare and they harmed people in the process. Denial of Service is what it is called. Denial of service is like when your Dr.
Says that you need a biopsy in the insurance company suggests that you change your diet and check back in 30 days That may sound extreme midnight but it actually wasn’t a joke.
That is a real-life example. See my Medicare Advantage Plans Explained video for more. I’ll read a few paragraphs from the report of the full report is linked below. this is from from the report itself CMS, the Center for Medicare Medicaid services are Medicaid and Medicare Despite CMS efforts to educate Medicare Advantage organizations about persistent problems in Medicare Advantage each year during its audits of different Medicare Advantage organizations CMS finds that many of the same violations them from previous year CMS finds many of the same violations as in previous years.
That means a regardless of what Medicare does, the insurance company simply sees the penalties as a cost of doing business and continues the same behavior undeterred. CMS cited some contracts for making the wrong clinical decisions based on the information submitted by the provider or beneficiary. CMS also cited contracts for not conducting appropriate outreach before making clinical decisions. Meaning that the Medicare Advantage organization did not have all of the information needed to make a decision and did not take the appropriate steps to gather information from the provider or beneficiary. Failure by the Medicare Advantage organization to make correct clinical decisions based on the information that it has or failure to reach out to the providers and beneficiaries for more information when needed can result in beneficiary harm, financial hardships for beneficiaries or providers, and unnecessary use of the appeals process.
This means that the insurance company is not really reviewing a doctor’s request. The system used to deny Medical Services is not based on patient needs. If it was they would read your doctor’s requests and consult with them. According to this, they don’t. CMS cited nearly half of the audited Medicare Advantage contracts for sending incorrect or incomplete denial letters which may inhibit beneficiaries’ and providers’ ability to appeal.
and they cited that 45% in some years here of the denied services – in 45% of those denied services the insurance company sent incorrect or inaccurate information. In almost half of all Denied Services, Insurance companies failed to provide you the patient information that you need to launch an appeal. The last one from this report and really the Coup de gras is on Star Ratings.
And this is disturbing. To me it is.
Beginning in 2019 audit violations will no longer direct Medicare Advantage Plans Star Ratings. Beneficiary advocates strongly oppose the removal of the measure stating that it will mask Medicare Advantage organization’s behaviors that could pose a serious threat to the health and safety of beneficiaries. On the other hand, most Medicare Advantage plan organizations supported the removal of the measure. so was done. so what this means is that star ratings do not represent what you can expect as a consumer.
It’s not a reflection of the quality of care that you as a consumer get from the insurance company. Medicare knows it and they know you don’t like it. and you can probably finish the rest of my thoughts for me. Next is a letter also the link below from the American Hospital association to Medicare and this letter is up to plead to Medicare fix the Prior Authorization process because it’s causing harm.
As I mentioned earlier prior authorization is when the Dr.
has to get permission from the insurance company before treating you you have to have prior authorization with Medicare Advantage Plans you do not with the Medicare supplement Here they’re not talked about being denied service. They’re talking about the problems with getting a service or a procedure approved so that can be done. I am just going to read one paragraph. This letter’s dated October 18, 2021 Unlike other transactions between a provider and health plan, prior authorization involves clinical information and has a direct impact on the perspective of patient care a prior authorization request is often the final barrier between a patient and the implementation of the providers recommended treatment.
Making judicious processing of such transactions extremely important.
Research has shown that prior authorization procedures cause significant delays in care frequently leading to negative clinical outcomes for patients. A boy is that a nice way of putting it. Currently, CMS rules allow Medicare Advantage Plans to take up to 14 days to respond to a prior authorization request during which time the patient and provider are uncertain as to whether the planned treatment can go forth. This delay in inpatient care is both unnecessary and unacceptable. In many instances, the patient is in the hospital awaiting transfer to the next site of care or to continue their treatment such as inpatient rehabilitation.
These patients can sit unnecessarily in hospital beds for days or even weeks as the Medicare Advantage Plans process the prior authorization request. These delays can not only contribute to a degradation of the patient’s condition but they also waste costly Health System Resources and prevent hospitals from freeing up inpatient capacity. and of course, they increased the patients’ exposure the hospital-based pathogens. So even if they don’t deny the coverage with the Medicare Advantage Plans the insurance company controls your Health Care. Not you!
Certainly not your doctor. Oranges to apple comparison. There are potential problems in receiving your Health Care through the Advantage plan that you that they don’t even exist with the Original Medicare and a supplement.
Next, I promised to tell you the most common mistake that I see many people make with their Medicare. This fits in very well here.
That mistake is getting less coverage today because you’re healthy. We often hear people I am going to go with an Advantage plan because it has lower premiums or a zero-premium plan. Therefore I must be able to save money. We just saw with the maximum of pockets that is not necessarily the case. But every year during Medicare’s annual election Period we field many phone calls from people in their mid to late seventies or even early eighties to late 80s actually who got a Medicare Advantage Plan because they thought they were saving money But now they’ve had health issues and they see the huge medical bills are they’ve had treatment experiences with the care approval etc.
And many of the services that they need are not approved by the Advantage plan, or only partially approved and so they have to pay out of pocket. They pay out of pocket because it’s not covered. If it’s not covered, it’s not part of the Maximum Out-of-Pocket. It’s in addition to it. The other of course, and this is true with every Medicare Advantage Plan is that they only cover 80% of your cancer treatment, not including the prescriptions.
You pay 20%, up to your Maximum Out-of-Pocket. Cancer is relatively common. 50% of men and 30% of women over 65 will get cancer in their lifetime. If you’re one of those you know you will reach your Maximum Out-of-Pocket. Then you hope that you don’t get ill near the end of the year because that out-of-pocket maximum resets on January 1.
You can pay it in November and December. It resets and you pay it all over again. This is where they regret not getting a supplement planned to start with.
They want a change from an Advantage plan to a supplement however because of their health, they can’t. After your first six months on the Medicare Part B plan, you must qualify medically to get a supplement plan, in most states.
Major health issues like a heart attack stroke diabetes cancer complications A lot of different things can disqualify you. Then they can’t fix the problem. It’s too late for one couple that is clients; the wife has a supplement with us and the husband has an advantage plan with us. For years she’s been pestering him to switch to a supplement plan. Finally, a couple of weeks ago he said yes, and scheduled an appointment for an application.
He is in great shape, no medications have no reason to think that he couldn’t get a supplement. Two days before the appointment he had a heart attack. Thankfully was a mild heart attack and he survived. But he’s no longer eligible for a supplement. You can have a heart attack and still be eligible but not congestive heart failure So I encourage you to not make the same mistake.
My philosophy and the one I have with my entire team here is if you wanna get today the insurance that you will want to have when you were sick or injured. Don’t choose your plan based on the fact that you’re in good health. That can change overnight and when it does it’s too late for you to change plans. So you should first look at the Medicare Supplement Plans that are available to you. They offer significantly more insurance they put you in your Dr.
In control of your Health Care.
Not an insurance company No insurance company has a say in your coverage. No insurance company chooses your doctors for you. My philosophy is to look at the plan that you’re going to want to have when you’re sick or injured. Do not try to cut corners today because you’re healthy.
So there it is. Now it’s your turn.
I make these videos for you to help you make an informed decision. Please leave me a comment below and let me know what part of this video that you found most information that you would want a share with your friends or used when you’re shopping for your Medicare. Please when you look below give me a thumbs up!
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I certainly try. If you have left questions on my other videos you know that to be true. I am really interested in what you have to say. I hope you found this information helpful so please like the video press the thumbs up for me to count the information useful when you do you help other people research the same questions you have you’ll help them find this video and if you want more of the subscribe to my channel and you see all my Medicare videos including the ones we have coming up in the future I am Matthew Claassen with MedigpSeminars.org Thank you for watching.