Would like to explain Medicare Supplements, what they do and how they do it because it is the most misunderstood part of Medicare.
Supplement in English means in addition to. In Medicare, it really means the same thing, but many seniors confuse it with Medicare Advantage plans and that needs to be cleared up. Medicare Advantage plans are subsidized by the federal government. These plans are subsidized because when you go on an MAPD plan, you are technically not on Medicare but must have Medicare Parts A & B to qualify for coverage. There are no medical questions to answer. Yes, you still pay the Part B premiums but are on a non-governmental plan offered directly through private insurance companies. In Nevada, there are many options to choose from and all have their place and work very well for most recipients. Additionally, these MAPD plans all have specific doctor and hospital networks that you must use if on those plans. Go out of network snd the costs go up.
The Medicare supplements are private insurance offered through insurance companies. There are no subsidies from the government and have specific rules regarding approvals, etc. When a person first becomes eligible for Medicare, (Age 65 or any age if disabled) they can qualify for a supplement and cannot be turned down due to illness. In Nevada, you must be 65 to be eligible for a Medicare supplement. In some other states, they allow anyone who has Medicare to obtain a supplement regardless of their age.
Once past the 6-month window of eligibility, you must qualify for coverage. In other words, you could be turned down for coverage if you cannot qualify medically. It is the only health insurance in America where you can be turned down because of a pre-existing condition. So, regardless of any pre-existing medical conditions, when you first turn 65 or go on Part B for the first time you have a 6-month window to apply for a
Medicare supplement without having to answer any medical questions. Past the 6-month window, you have to qualify medically by answering specific medical questions and could be turned down because your medical condition eliminates your ability to qualify to get the coverage. Also of importance is these Medicare supplements have no network of doctors or hospitals. You can go to any doctor, any hospital if they take Medicare. If they do not, you can go but the cost is on you and not the insurance company. I am a good example to explain how it works. I stayed on my group coverage until I was 69, so did not have Part B. When I applied for Part B, I had that 6-month window to get a Medicare supplement without proving eligibility medically speaking. I would not qualify for a supplement if I had to answer medical questions as I have Rheumatoid Arthritis and have had for over 30 years. Because I took Part B and then immediately applied for the supplement, the insurance company had to approve me as had a guaranteed issue. Everyone will eventually have some illness that would disqualify them for the supplement unless they applied during their 6-month window of obtaining Medicare Part B. That is the reason not to wait to apply for a
The supplemental plans offered by plan name by any insurance company all have the same benefits. There are many plans offered and each has their own set of benefits so a plan F from all companies have the exact same
benefits, but the premiums will all be different as the insurance company has the right to set rates. In Nevada, those rates increase annually, so picking a company whose rates increases are reasonable is critical to your financial health once you retire.
I try to stick to the major players because their rates are more stable than a smaller company whose rates are lower to begin with but could climb much higher because they do not have the client base to spread the cost over. I cannot mention any specific company but early in my career I sold some plans from a smaller company and the rate increases were very high and I had to explain to my clients what happened. Thankfully, that happened 16 years ago, and I learned the hard way what companies not to sell. I only offer coverage from the larger insurance companies that have stable rates. The rates do increase annually and need to make sure my clients understand that before we consummate the sale. I always show them the cost and how with age those rates increase. Want to make sure they understand what they are buying and the cost of those plans. Most can afford the rates but those that cannot opt for the Medicare Advantage plans typically do not have a monthly premium. Will save the descriptions of the advantage plan for another blog as all these plans are complicated to explain to someone, not in the insurance industry.
In closing, the Medicare supplement plans are very good and have great benefits but come with a monthly premium that some seniors cannot afford. If you consider my situation with Rheumatoid Arthritis, the monthly cost of infusions is around $4,000 per month. Having a Medicare supplement that pays the entire cost is well worth the monthly premium of $325. Consider this; I pay $325 for a $4000 infusion. On the MAPD plans, the cost of that infusion is 20% or $800 per month with no monthly premium. My monthly premium is $325 so I have a bargain. That is the benefit of having an experienced insurance broker familiar with all the plans available and the ability to figure out what would be my client’s best option. Stay well and safe and call me if you are going on Medicare so I can help you pick the best option for you. Lastly, my services do not cost you any money. The insurance companies pay us directly and since all the commissions are the same, it is easy to find your best coverage. Yes, you can listen to your friends and relatives but if they are not Medicare insurance
brokers their knowledge is not usually based on fact but based on what their friends and themselves have gone through and they are not trained in Medicare. Medicare brokers are required annually to certify their knowledge by completing a training course from American Health Insurance plans or AHIP and must score a 90% or better or cannot offer Medicare plans. They also must pass each insurance companies training usually with a score of 80% or better so becoming Medicare trained is not easy and not all insurance brokers offer Medicare products.
Len Barend, broker The Barend Agency Inc.