QUESTION: I have a Medicare Advantage Plan (HMO). My friend has Medicare and a Medigap Plan. Who has the better insurance?

ANSWER: This question is one we regularly debate. First, I must say that because you both already have Medicare Part A and B, you are both very well protected. You both have Good Insurance. Most Medicare products are good, some are better for certain situations; some are better for other situations. So let me explain some of the differences.

Once you turn 65, most people have Medicare Part A and B. Once you have Medicare Parts A and B, you can insure two different ways: one path is through Medicare Advantage Plans. This path usually includes prescription drug coverage. The other path is through Medicare + Medigap Plan. This path usually requires purchasing an additional Prescription Drug Plan. For this discussion I am not going to talk about Part D (prescription Drugs) too much.

We will first review Medicare Advantage Plans and what that pathway has to offer and cautions about it. The Medicare Advantage Plan path requires that you have Medicare Part A and B. It also means that once you sign up for the Medicare Advantage Plan your Medicare Part A and B go inactive (no longer your primary insurance). You will always pay for your Medicare Part B premium, but your insurance coverage will fall to the Medicare Advantage Plan. Most Medicare Advantage Plans fall into three categories, Health Maintenance Organizations (HMO’s), Preferred Provider Organizations (PPO’s) and Private Fee For Service (PFFS). Most of these options include prescription drug coverage, therefore you won’t need to buy an additional plan. These Medicare Advantage plans usually have a relatively low monthly premium and usually require co-pays as you access healthcare. So you will have to pay for part of the cost of most of the care you receive. In 2019, it might be $10 or $15 for bloodwork; it might be $0 or $30 for primary care physician visit and $40 to $75 for a specialist physician visit. It might be $295 per day to $700 per day for a hospital stay. The Medicare Advantage Plans must provide coverage for all the benefits that Original Medicare would cover, but can set up its own cost structure for you to pay. So, the Medicare Advantage Plans will pay for a Hospital Stay for Heart Surgery, but it can restrict which hospitals you are allowed to go to and decide how much you pay for the Heart Surgery.

These Medicare Advantage Plans also often provide benefits that Original Medicare may not provide. Some examples of these benefits include paying for hearing aids at specific providers, & this year many have added dental benefits, like reduced cost or even free cleanings and x-rays. Some Medicare Advantage Plans include a Fitness Benefit. This is a benefit that helps to pay for or entirely pays for a Health Club Membership (JCC Fitness, YMCA, Curves and many others). The dental, hearing aids, and health benefits are not Medicare Benefits. They are benefits that are above and beyond what the companies are required to provide. These additional benefits are often what help to entice individuals to enroll in these plans. I am not saying these Medicare Advantage plans are bad, they just make their plans look extra enticing by including some extra benefits.

For the person who rarely goes to the doctor, and would enjoy having some extra benefits like a Health Club membership, this could be the perfect plan. If you are using the dental coverage and the health club membership as the primary reasons you chose the product that may be a problem depending on other factors. For example, if your providers aren’t in the network and your medication isn’t covered, having a reduced cost Hearing Aide may be the wrong incentive to choosing that particular insurance. For an individual who has significant medical problems with many appointments and co-pays, having that ‘free’ health club membership might not be cost effective.

The Medicare Advantage Plan you choose as we said can limit where you are allowed to go, or could increase the amount you have to pay at that location. Be sure your providers are ‘in the plan’; be sure where you live is part of a useful service network.

The second pathway we will review is Original Medicare and a Medicare Supplement Plan. With Original Medicare and Medicare Supplemental Plans (Medigaps) you have an entirely different insurance package. Original Medicare is national, so will be accepted wherever you doctor with no restrictions and no referrals to access your health care. The Medicare Part B premium is something you have to pay no matter what insurance you choose. With this Insurance Path, you will add on a Medicare Supplement Policy. The policies come in a number of different types. These types are “lettered plans” (A, B, C, D, F, G, K, L, M, and N). Each letter is a different variety of coverage. The most commonly sold plans are C, F, G and N. These Plans are sold as Supplements to Medicare. Medicare is the primary payer and the Medicare Supplement Plans are the secondary payer.

When Medicare ‘approves’ a treatment for example, a hospitalization or physician visit, it usually only pays part of the medical claim. There is some amount that is left. The balance may be a deductible ($185 or $1,364), or a percentage (20 percent). The Medicare Supplement Plans (Medigaps) fill in those amounts. These lettered Medicare Supplement Plans are universally accepted regardless of the insurance company. In New York State the premiums are based on your county of residence. In other states there could be criteria like smoking, gender or age that impacts your premium cost.

In Chautauqua County everyone who has a Medigap Plan C pays the same amount for that insurance as long as they have the same Insurance Company. If there are two people with Medigap Plan C and they insure with different companies they have different premiums. One could pay $203. per month and someone else in the same county, with a different company could pay $312.43 per month. Is there a reason to pay the higher amount? Do you get ‘better coverage’? No, a Plan C is always a Plan C there is no difference in the Plan Coverage with different companies. I usually suggest going with the lowest cost Medigap Plan carrier if possible. However, it is your money to spend how you want, you can choose where you get your insurance.

The Medicare + Medicare Supplement Plans allow you to go anywhere, anytime to access healthcare. You can see you will pay more in premiums, but your access to healthcare is anywhere anytime, and the cost to you for that Health Care is usually very low. For an individual looking at lots of traveling in the coming year this insurance package may offer them the flexibility they desire. For those individuals looking at joint replacement, or serious medical concerns like Cancer treatment, this insurance solution is very cost effective, the higher premiums saving you money as you receive treatment.

Original Medicare plus a Medicare Supplement Plan does not include prescription drug coverage, so you will need to add onto these products with an additional prescription drug plan, if you need one.

To use a similar situation, you may ‘always’ buy your gas at the same gas station. You have a reason, it is convenient, you have a discount card, the owner is your nephew, whatever the reason you buy your gas there.

Someone else may choose to go to the station that is the cheapest. This changes from week to week, so they buy their gas in a variety of places. They choose where to get their gas by going to the gas station offering them the best price that day. Who is right? Both. You have different reasons to buy your gas the way you do. You can buy insurance for different reasons too.

The insurance answer is not the same for everyone. That is the biggest point I try to make week after week. It isn’t right or wrong for everyone. It is what works for you now, knowing that in the coming months and years you can make a different choice based on what works for you then.

So your question “Who has the better insurance?” The answer is you both have good insurance. They are good for different reasons and different situations. Medicare is always good. How you complete your Medicare picture needs to be based on what you need and the priorities you have. You and your friend have different variables, or different criteria you used to make your decisions. You can have different insurance and both be right for you.

To contact Janell Sluga, GCMC with questions or concerns, please call 716-720-9797 or e-mail at janells@lutheran-jamestown.org.