As I close in on selling my 1,000 Medicare client, I wanted to take a moment to reflect on what I feel are the trade offs between Medicare Supplements and Medicare Advantage plans. In my experience it come down to 4 distinctions: peace of mind, convenience, flexibility and thriftiness. Let’s discuss these in a bit more detail.
For those who like to be thrifty, it is tough to beat the $0 premium Medicare advantage plan with a prescription drug benefit. (MAPD) It is a safe bet that most subscribers will not come close to needing to pay the necessary total of copays that would be more than the annual premium of a Med Sup plan for their age. And after just a few years, that could add up to thousands of dollars. Especially when you add up all the ancillary benefits such as dental, vision, gym membership and the like. A simple exercise that I use to illustrate this when consulting with a client is to have them take the worst health care year that they or spouse has endured and figure what co-pays they would need to pay for the same treatment and then double it. More often than that they come out ahead. But there are other factors besides money that need to be considered, and that leads us to our other “trade offs”.
The first trade off is flexibility. Most MAPD are HMOs or PPOs and require their subscribers chose in-network doctors, hospitals and vendors. This can significantly limit someone finding a specialist or surgeon in or out of your state. Some seniors want to know that their plan is flexile enough to allow a patient to travel to any specialty hospital should they develop a life-threatening cancer or other rare disease. Although many of these types of facilities may be in some HMO/PPO network, it may not be your network, and that is a risk that some people do not want to take. And even then, networks are always changing, and you may need to change from a plan you like if your doctors make a change. The network restriction is probably the biggest hindrance that steers people away from the MAPD.
Now the convenience factor goes both ways. What I mean by that is while some clients like the convenience of having no networks and copays, other clients like the convenience of having only one card, with one plan that takes care all their healthcare needs with one low premium. So, it really depends on what kind of conveniences you prefer. I try to listen to what is important to my client and then recommend what best suits their individual needs and priorities. I have several couples where one spouse has a MAPD plan, while the other insists on a Med Sup plan with a separate PDP plan; and both are very happy with their choice. And that makes perfect sense to me.
So, in the end, peace of mind is the biggest benefit of any insurance product. Most clients who purchase a Medicare Supplement plan are willing to pay a premium for that peace of mind above all else. Even when they get the annual premium increase on their birthday, they know that no matter what happens, their treatment will be paid for with minimal out of pocket expense. And that give them great peace of mind. Now let’s not forget the peace of mind the MAPD subscriber receives. All MAPD plans have a maximum out of pocket (MOOP) which is very difficult reach, outside of cancer treatment. And so they have the peace of mind of knowing that they have an affordable plan with a network of doctors and other vendors available to keep them healthy and fit.
So, as I enter another Annual enrollment period (AEP), I look forward to reviewing these 4 important tradeoffs to all my prospects and clients that I will consult with. I will take time to listen and explain all the features, advantages and benefits allowing each client to pick a plan that most closely matches their individual needs and priorities. Whatever they chose, peace of mind is my primary concern.