Once you qualify for Medicare, there are many options for a Medigap, or supplemental coverage plan. All the information out there can make the process confusing, however use this guide to help help ask the right questions so you can understand the differences.
The 8 Critical Questions YOU MUST Ask When Picking a Medicare Plan
1. Do I retain my rights to Medicare Part A & B?
The reason you want to ask this question is because even though you have your rights to Medicare Part A and B, your choices on where you use your benefits may be limited. For example, Most Medicare Advantage plans have a network which you must use to get your benefits, if you go out of the network you may pay a much higher portion of the bill or not even covered at all unless it is an emergency situation.
2. Will I be able to see the same doctor or visit the same hospital?
Just as in the question above, if your favorite doctor or hospital is not in the Medicare Advantage network, then you will have to make a choice on whether the plan is worth it. On the other hand a Medicare Supplement plan along with Original Medicare will not restrict you to a network, as long as the doctor or facility accepts Medicare then they will accept your Medicare Supplement as well.
3. Is there a co pay-and if so, how much?
Currently the Medicare Supplement plans do not have a copay option, however some of the plans to require you to take care of your Part B deductible. Depending on the plan, this might still be a good option depending on what your monthly premium is. There are some supplement plans that take care of both your Part A & B deductible for you.
Medicare Advantage programs typically have a co-pay, deductible and an out of pocket maximum that you are responsible for each year. Be careful, these plans also change each year as well, so your co-pays and deductibles could increase from year to year.
4. Is there an out of pocket maximum?
Medicare Advantage plans do have an out of pocket maximum, which is the portion you are required to pay above and beyond your deductibles and co-insurance. Medicare Supplement plans typically have a deductible you have to meet if there is one and that is it, once you meet your deductible the plan takes care of the rest.
5. What happens if I travel to Florida or outside of my normal area -am I still covered?
With Medicare Supplement plans, the only requirement is that the provider accepts medicare, then your benefits will take care of the rest up to your plan limits. With a Medicare Advantage plan, you may only be covered in emergency situations or if there happens to be coverage you are typically exposed for much much more of the expenses incurred. Make sure you look at your plan benefits summary to see what your true financial exposure is.
6. Does it cover prescriptions? Glasses? Dental?
Medicare Supplement plans do not cover prescriptions glasses or dental, you will have to obtain a separate policy for these coverages. Medicare advantage programs are not required to offer all of these benefits but you may find some plans that incorporate some of these benefits within your plan.
There are some Medicare Advantage plans that do have prescription coverage included, however the included prescription plan may not be the best option for you. Make sure you look at all options before you choose a plan.
7. What does the coverage cost, and will my rates go up?
Typically the Medicare Advantage have a lower monthly premium when compared to a Medicare Supplement program, however your potential total expenses each year may be 2x, 3x, maybe even 5 times the amount you would spend on a Medicare Supplement plan. Don't just look at the monthly, also factor in your doctors co-pays, deductibles, and out of pocket expenses you would be responsible for during the year.
As for rates going up, just as with any other type of insurance program, rates do change from time to time because they have to compensate for their actual expenses. How much do Medicare Supplement policies cost? More information on premiums can be found here.
Medicare Advantage programs on the other hand also have one other factor you may want to consider, the current administration has made many statements and started to take action towards reducing the funding for the Medicare Advantage programs, because of the fact that it costs Medicare more than Original Medicare benefits. Which as an agent concerns me as to what will happen to the benefits of those programs over the long haul.
8. As my agent, how much commission will you make?
Each company sets a commission amount that they are willing to pay an agent or advisor to recommend their product. The companies pay the agents directly so you should never have to pay an agent for their services. The other thought process is that you are paying that agent for their services by being their client, so are they thinking about more than what they are going to make for each sale. Medicare Advantage commissions are approved by Medicare and released by the private companies, depending on the situation there may be more of a financial incentive for an agent to place you in on product instead of the product that is best for you. Do not be afraid to ask your potential agent how they will be compensated for that product they recommend, compared to other potential products.
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