Why buy a Medicare Supplement?
Because the alternatives can be very painful.
Option 1: Do nothing
The riskiest choice. Medicare has no statutory limit to your share of the expenses in the event of illness or injury.
Option 2: Buy a Medicare Advantage plan
Not a bad choice until one needs to use it. These plans are all HMOs or PPOs without freedom of choice in providers and often very high out-of-pocket cost sharing limits. If your preferred doctor or hospital is not in the plan, you must select from a list provided by the insurance company. There are also limits on access to specialists as well as on geographic areas in which the plan will offer protection.
*Option 3: Buy a Medicare Supplement plan*
The most sensible choice, offering predictable and reasonable costs plus perfect freedom of choice when deciding where to seek medical treatment.
- Freedom of choice: no HMO or PPO networks.
- Benefits that cover the “gaps” and limits in Medicare.
- Freedom to visit a specialist without asking permission.
- The highest level of protection available.
- Coverage everywhere in the US and possessions.
- A very reasonable premium cost.
- Additional limited coverage for foreign travel emergencies (some plans).
- Permanent, lifetime protection as long as you continue to pay the premiums when due.
Fiscally-responsible Medicare participants understand the risks: Substantial financial loss can occur.
SUPPLEMENTARY COVERAGE IS INEXPENSIVE PROTECTION!
WHICH SUPPLEMENT PLAN IS BEST?
There are several Medicare Supplement plans, each identified by a letter, as in Plan A, Plan B etc. Each plan carries identical benefits no matter what insurance company sells it. The process for deciding the best plan for you is to look first at the benefits, since those are the same with each company, and then at the monthly premium cost which can vary widely from one company to another.
For my clients, I narrow the choices down to two:
1) The most comprehensive (which is also the most expensive) coverage allowed by law; the CADILLAC of Medicare Supplement plans.
2) The most cost-effective (which is also the least expensive) coverage available; the high-performance GTO of Medicare Supplement plans.
Are you first eligible for Medicare in 2019 or before? You may then select Plan F or High Deductible Plan F.
Are you first eligible for Medicare in 2020 or later? You may then select Plan G or High Deductible Plan G.
If you are risk averse and have the resources to pay a monthly premium around $150 to $250 (depending on where you live, etc.) the CADILLAC of supplement plans is for you (either Plan F or Plan G depending on your age).
If you are seeking the most bang for your buck, do not mind paying some limited cost-sharing to keep your overall expenses modest, the high-performance GTO is the plan for you (either High Deductible Plan F or High Deductible Plan G).
FIRST ELIGIBLE FOR MEDICARE: I RECOMMEND THIS PLAN:
In 2019 or earlier………Plan F or High Deductible Plan F (HDF)
In 2020 or later………Plan G or High Deductible Plan G (HDG)
A SHORT SYNOPSIS OF THE BENEFITS OF EACH PLAN:
Medicare will pay it’s share of the cost of medically necessary treatment first. Typically, this will be the major portion of the expenses.
PLAN F will pay all of the remaining costs of treatment. The insured will not receive balance bills for any eligible charges at all.
PLAN G will pay all but the annual Medicare Part B deductible ($185 in 2019). No bills for any other eligible charges will be sent.
HIGH DEDUCTIBLE PLAN F (HDF) imposes an annual deductible ($2300 in 2019) after which 100% of all eligible charges will be paid.
In exchange for a very low monthly premium, the insured will typically receive occasional balance bills for small portions of the overall costs of treatment. In the rare instance the plan deductible is fully paid in a given year, HDF pays 100% of remaining charges.
HIGH DEDUCTIBLE PLAN G (HDG) imposes an annual deductible identical to that of HDF. Once again, in exchange for a very modest
monthly premium, the insured will typically receive occasional balance bills for small portions of the overall costs of treatment. As with PLAN HDF, HDG pays 100% of the remaining charges that year in the unlikely event that the deductible is actually paid in full.
EACH OF THESE EXCELLENT PLANS CAN BE THE BEST CHOICE; it is difficult to see how a wrong choice can be made.