Baby boomers who are at or approaching the Medicare eligibility age of 65 may be perplexed by the many TV and direct-mail advertisements imploring them to call toll-free numbers to learn about Medicare Advantage plans. People should be wary of such ads, according to local insurance brokers.
“Joe Namath doesn’t care about you because he doesn’t know you,” said Harvey Perle, a Mendota Heights insurance broker, referring to the former NFL quarterback who is a frequent pitchman for Medicare Advantage ads on TV.
The great majority of people do not consult a licensed insurance broker before choosing a Medicare Advantage plan, Perle said, but he recommends that they do. The consultation can be done in person, by phone or by Zoom, he said, and it costs nothing for the client.
Pros and cons of Medicare Advantage.
Insurance brokers are licensed fiduciaries who are not allowed to solicit clients or pitch specific insurance companies. They are paid by the insurance carriers, but the payment is set by the federal government and it is the same for each insurance company.
Esa Katajamaki, an insurance broker in Minneapolis’ Longfellow neighborhood, recommends that pre-retirees attend informational sessions on several Advantage plans before selecting one. That will help them decide among the various plans and whether or not they want a Medicare Advantage plan or would be better off sticking with Original Medicare, she said. A general description of the plans may be found at Medicare.gov, the official U.S. government website.
Simple as A, B, C, D?
Medicare comes in several parts. Part A covers inpatient hospital care, skilled nursing care, home health care and hospice care. Part B covers outpatient services such as doctor’s visits and exams. The deductible for Part B is $233 per year. After that is met, Medicare recipients typically pay only 20 percent of the Medicare-approved amount for outpatient services.
Most Medicare recipients do not pay a premium for Part A; they paid that premium through the Medicare taxes that were withheld from their paychecks while they were working. The monthly premium for Medicare Part B is currently $170.10, or more depending on one’s modified adjusted gross income.
Medicare Part D is prescription drug coverage, and it comes with a small monthly premium. Part C is the optional Medicare Advantage plans offered by private insurance companies as an alternative to Original Medicare.
Comparing the advantages of Part C plans.
Medicare Advantage plans include Part A, Part B, and usually Part D. They may have lower out-of-pocket costs than Original Medicare and may cover additional services such as hearing, vision and dental or even health club memberships. However, they may also come with additional premiums and may not cover services by doctors who are outside of the plan’s network.
About 80 percent of new Medicare enrollees choose an Advantage plan, according to Grant Rockwood, an insurance broker in downtown Saint Paul. He advises people not to wait until the last few months before turning 65 to make a decision.
“Advantage plans keep getting better and better,” Rockwood said. The vast majority of the plans are accepted by all local health care providers, he said, but enrollees should still check to make sure their doctors accept the plan. While all doctors who accept Medicare accept Original Medicare, a few do not accept some Advantage plans.
People who travel out of state a lot may want to enroll in a Medicare Advantage plan that has a national network, such as United Healthcare or Blue Cross Blue Shield, Rockwood said. “It’s an extra step to check to see who’s in the network elsewhere,” he added.
Finding the plan that fits you best.
The cost of premiums, co-pays and deductibles are other factors to consider when choosing a Medicare plan. Monthly premiums for Original Medicare Part B run between $171.10 and $578.30, depending on income, while the premium for Advantage plans ranges from zero to $196 in addition to the Part B premium. Original Medicare has no co-pays. Advantage plans usually have small co-pays for doctor’s visits, ranging from $15 or $20 for network providers to $40 or $50 for specialists.
Medicare Advantage plans generally do not impose a deductible for inpatient hospital services under Part A, but often charge a daily copay. Under Original Medicare, there is a deductible of $1,556 for each inpatient hospital stay but no copay until day 60.
When it comes to Medicare, “no one size fits all,” Perle said. Enrollees need to consider their health history, medication needs and budgets before signing on to an Advantage plan. “You don’t want to take risks on your health care plan by throwing a dart,” Perle said. “Plan for the unexpected.”
Perle advises that after enrolling in a particular Medicare plan, people review their decision annually to be sure it still suits their needs and that their physicians are still in the network. Licensed insurance brokers can assist with those reviews, he added, and also at no charge.
— Carolyn Walkup
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