"An empty man is full of himself." -- Edward Abbey

Sunday, October 18, 2020

Part 2: Review Your Supplemental Plan

     I read last week that our Social Security increase for next year will be 1.3%. Will that be enough to even cover the increase in our health-insurance premiums?

     Last week I decided to review our medical insurance, because open enrollment is about to start. And I thought maybe I could find a way to save a little money. My wife and I have the same supplemental Medicare plans. Plan N. But we have them with different companies, and it turns out I pay $190 a month, while she's only paying $120 per month 

     That didn't seem right to me, so I decided to look into it. I also wanted to see if Plan N is still the best option for me. I checked several websites and found that the cost of the premium depends on the insurance company, as well as where you live (but B and I live in the same house!), your age, your gender, your marital status, and the way you answer some key health questions.

     I found out that men pay a higher premium than women. Is that fair? It seems to me that women go to the doctor more often than men, so they should pay a higher premium. But maybe men have more expensive problems like heart attacks and strokes.

     And that brings up the fact that men don't live as long, either. According to the Social Security life expectancy table, the average life expectancy of a female, at birth, is fully five years longer than it is for a male. Isn't that the ultimate sex discrimination? Even if a guy like me makes it to age 70 (by avoiding dangerous jobs, the military and risky male behavior) his life expectancy still falls more than two years short of the average woman.

     Anyway, I really couldn't get any specifics on the websites, so I called my Supplemental carrier, which is United Health Care through AARP. Yes, there was a phone tree, but before long a friendly young woman answered the call, and she seemed fairly knowledgeable.

     First, we went over the various plans. I have original Medicare Supplemental Plan, not a Medicare Advantage plan. It's slightly more expensive. But I don't have to stay in network. I like having the option of going to any doctor I want -- especially if I end up getting some complicated disease that my local doctors don't know too much about.

     There were less expensive plans, and one that was more expensive. Plan F. The less expensive plans didn't cover enough and made me feel insecure. Plan F pays for more deductibles, as well as "excess charges above Medicare approved amounts." But Plan F is another $80-some a month. I decided it wasn't worth it. I'll stick with Plan N.

     Then I asked the United Health Care woman about the cost. Was I eligible for any discounts? I mentioned that my wife has Plan N with another carrier and pays much less than I do. She took a minute to check for me, but then came back and told me: No, you've got the lowest rate.

     So I said: I'm married now. I wasn't when I first signed up for the plan. Do you offer any marital discount that could save me some money?

     No, she said. If my wife and I were on the same plan we'd each get a 5% discount. But just being married doesn't qualify for the discount when my wife has her insurance from a different company.

     The young woman went on to explain that I already have one discount, one that I got when I first signed up. But the discount decreases every year. I started out at age 65 with a 39% discount. But every year since then the discount has gone down by 3%.

     I thought about that for a second. In other words, I asked, in addition to whatever usual price increases are involved, the insurance company tacks on an extra 3% every year just because I get older?

     She laughed. Well, I guess that's another way to put it.

     B is four years younger than I am. So if her insurance company works the same way, that accounts for 12% of the price difference between her policy and mine. Add in the male surcharge, and probably a few other hidden fees, and -- bottom line, I'm just keep my same Supplemental Plan.

    Together, B and I pay almost $1000 a month for medical insurance, when you count Medicare, Plan B, Plan D, plus a relatively modest dental plan. But I think it's worth it, when you consider how expensive medical care can be. But clearly, anyone who suggests that Medicare for All is the same as free medical care doesn't know what they're talking about.

      Anyway, I guess the only real strategy to save money is to keep away from the doctor. So I'll eat my vegetables, get some exercise, avoid too much stress, get plenty of sleep, wear my mask and keep my distance. And the hardest part . . . try not to do anything stupid!


Fred said...

I am still on private insurance. My costs are $900/mo, for me only. I am not complaining. Payroll deductions, retiree premiums & the trust fund only cover about half of Medicare costs. The rest comes out of the general fund. Medicare is one heck of a good deal. Right now all Medicare recipients are heavily subsidized by the taxpayers and everyone on private insurance. The hospitals and doctors would not survive if everyone paid Medicare rates for services and procedures. Healthcare providers make up the difference by shifting costs to private insurance plans. If we ever decide to have serious discussions about our healthcare system we can look forward to some serious questions about the massive discount retirees are receiving.

Olga said...

I was thinking about investigating alternative supplemental plans but My eyes glaze over every time I go to look at various plans. I pay $228 and have no dental or vision benefits (which are the two main doctors I see on a regular basis). I think I will force myself to look harder. I am healthy but I do realize that can easily be a temporary condition.

Miss Merry said...

We are still on private insurance, too, through my husband's former union. We pay almost $1000 a month together, but have no dental, vision or well-care. We also have a big deductible. This means we pay for every flu shot or update for prescriptions. We do not get checkups and go to Urgent Care for medical needs since the cost is much less. It does cover Major Medical. I fell and broke my humorous in March and my portion of the $42,000 medical bill was only a little over 2,000. We are hoping to get a Part D that includes vision and dental for what we are not paying.

DUTA said...

The most sensible thing to do is written in your last paragraph - keep away from doctors.

ApacheDug said...

I’m not sure I understand where Fred is coming from, in regards to seniors getting sizeable discounts on their health insurance thru Medicare; based on what I’ve seen in Tom’s Part 1 & Part 2 here (and the comments), people are paying a lot more money for their Advantage or Supplemental than I was expecting to (when I go on Medicare in a few years).
I have a silver plan thru Obamacare, and while my options are limited, and no Dental or Vision, in the last couple years I underwent several kidney surgeries that cost me a total of 3K out of pocket. I was really expecting to pay more.

PS. On an unrelated subject, Tom I always enjoy the quotes you post on the top of your blog.

Tom said...

Fred definitely has a point, in that basic Medicare (which pays most of the bills) is subsidized. I've read that Medicare premiums cover about 25% of the actual cost. But I believe the Supplemental plans are not subsidized, so it all adds up. I also share Olga's reaction: my eyes also glaze over. Doug, thanks for the compliment on the quotes ... yeah, they're fun, and sometimes enlightening!

Priscilla said...

We've been on UnitedHealth Care's Medicare Advantage for 3 years now. So far, so good. We're in San Diego, a large city with a lot of good medical & hospital choices in plans to choose from.
Always look forward to reading your blog, Tom. Thanks for them.

Kay said...

All this is so confusing. Sigh. We don't have a choice anyway since we are connected to the military plan.

Lynn said...

I have had a bias against the AARP programs since I first enrolled in a Medicare Supplemental plan 7 years ago. At that time I discovered that Plan G was the same as Plan F except for a modest annual deductible in Plan G. (Stick with me - I know all this talk is boring...) For me through Aetna at the time, monthly premiums plus deductible was cheaper than total monthly premiums with Plan F. AARP offered no Plan G. Period. Since that time Plan F is no longer available for new enrollees. It was explained to me that the small deductible made some enrollees more responsible when seeking medical care. It was also pointed out that though rates tend to go up annually, the Plan G rates tend to increase more slowly. That has certainly been my experience. I started at $122/mo in 2013 and am currently paying $135 with no vision or dental. I'm happy with that.

I see the United Health/AARP program as a greedy system that doesn't really have customer's needs in mind.

Rian said...

Tom, we also have regular Medicare and a Supplement. All our medical insurance for DH and myself also cost about the same as yours. The supplements go up every year and we do some comparisons, but in general Medicare covers 80% and the supplement covers the other 20%. We are happy to have Medicare and can't imagine what people would do without it. It would be nice if regular Medicare would cover dental and eye care... but we too want to pick and choose our own doctors.

gigi-hawaii said...

I pay zero monthly premium for Humana HMO Medicare Advantage. Zero co-pay for my visits with my PCP. $40 for specialists. It's a great deal.

Happy said...
This comment has been removed by the author.
Alex said...

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Janis @ RetirementallyChallenged said...

I will start Medicare in early January and am starting to go over all my options. All the confusion makes me yearn for some sort of universal healthcare plan. I'll probably end up, like you, with Original Medicare and a supplement plan. Either way, it should end up cheaper than what we are paying now.

Kathy @ SMART Living 365.com said...

Hi Tom! I'm not sure if our example in California applies exactly to you, but I'm guessing it might give you some ideas if nothing else. My husband Thom is about a year and a half older than I am. When he turned 65 we went with plan F because we heard so many good things about it AND we also went with AARP also because others told us it was great and the agent we used agreed.

But when I turned 65 this last May I decided to talk to a different agent just to compare. I'm so glad I did. He basically explained that all the plans within a certain group are exactly the same. That means that if you pick F or G or N it is the exact same plan benefits with every company that offers it in your state. The ONLY difference is the price. That's right. One company can charge a different price than another company offering the same plan. So because F is no longer offered to new enrollees, my new agent explained that G is basically the same as F with an annual deduction of approx. $190. But the premiums are quite a bit lower. He also told me that AARP is more expensive (at least in California) and he recommended Blue Cross of CA which is about $50/month cheaper. That's right $50/month for the same plan!!!

I explained that my husband had already signed up for plan F with United (AARP) and this new agent said, well he can switch. And remember, this was in May 2020. So in May Thom fills out a new application for plan G, switches to Blue Cross of CA (where we get a couples discount) and now we are both on Plan G because I'm a bit younger I pay $125 and he is paying $135. The new agent also said that AARP is notorious for raising rates every years while Blue Cross is more stable and if they do raise them, don't raise them as much.

So I learned two things. If you go with Medicare supplemental insurance, the plans themselves all cover the exact same services. So like I said, plan G, Plan N and all the others are the exact services, the only difference is the company and the price that they decide to charge. Oh, and the reputation of the company. You want to stay with a good company but AARP has a built in advertising campaign to help bring in business so that's why they are so popular.

The second thing I learned is that you can sometimes switch in the middle of the year! I was under the impression that you had to wait until open enrollment but that was clearly wrong in our case. Maybe because Thom supposedly downgraded from F to G, all he had to do was fill out a VERY basic health application and that was it. Of course he has no preexisting conditions so that might matter too. But he was able to switch over in May when I started as well. And because we are both with the same company we get a family discount. Now 6 months into the service we haven't noticed ANY difference between the two companies.

It is very confusing and if you don't ask the right questions or get an agent that either isn't telling the whole truth or maybe doesn't even know, you won't get all the answers. Like I said, I can't guarantee you will save money but I suggest you ask your agent what other companies are offering N in your state and get some quotes and go from there.... ~Kathy

Tom said...

Kathy -- Thanks for all the info.! Maybe I'd better revisit this. Janis -- Yep. it's confusing alright, and a universal healthcare plan for all its benefits would probably be even more confusing.

Linda Myers said...

Until a couple of years ago both my husband and I had Kaiser in Washington State. When we started spending more than three months a year in Arizona I had to switch away, because Kaiser didn't provide coverage in Arizona except for urgent and emergency care, and when I was diagnosed with asthma I had to pay out of pocket in Arizona. Then I did Medicare Advantage. It was a little more expensive but covered me in both Washington and Arizona. But there was a network I had to stay within. Last year I switched to Medicare supplement. $214 a month, but I could choose any doctor I wanted.

Now Kaiser in Washington has a Snowbirds plan for people who live in Phoenix or Tucson. It's a Medicare Advantage, again, but it's $28 a month. That's too big a difference in premium to pass up. I was happy with Kaiser for nearly 30 years, so I suspect I will continue to be.

Otherwise, I'd still pay the extra for Medicare supplement. I like the freedom to choose. But I don't think every company would provide that coverage for a person who lives six months of the year in Arizona and the other six months in Washington.

It's pretty exhausting, all this research!

Rob said...

Long time reader, first time commenting. I am a little surprised nobody has suggested using a broker to help with decisions. As I am approaching 65 next year, I have learnt about boomerbenefits, which is large broker licensed in many states. They have a Medicare Q&A page and many videos on Facebook that are very helpful. From all the comments, it is appears they do a good job of serving customers and helping them through the maze. I am considering using them next March when my 3-month window opens. It costs nothing extra to use a broker-a little known fact is that broker costs are included insurance premiums (that is all insurance) so if you dont use them you are paying for them anyway. Another approach is trip your state SHIP which has counselors for Medicare choices who are certified-it is federally funded. Again it is free and supposedly helpful. Rob

Janette said...

$1000 a month? Wow! I am not prepared for that.
Like Kay, I have few choices because I am in the military plan...and now I am very grateful for that. Considering that health insurance was a main reason "we" chose to stay until retirement (12 moves later), it was a good choice. Mostly "socialized" medicine, I had no choices when my arm was broken and I needed OT afterward.
My husband has the VA as a back up, vision included.
Our dental plan is about $50 a month.
I'll need a supplement when I turn 65. I'll start researching next year.

Tom said...

Rob, Good advice! My wife used a broker when she signed up. For some reason I didn't. I just went with AARP and never looked back ... until now, and now I'm reconsidering my plan.


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Anonymous said...

Just a thought here - one thing that I did not see in any of the comments was costs of prescriptions. Most (if not all) Medicare advantage plans have a separate plan to cover prescriptions. When I did my first AARP Medicare plan I found out that one of my prescriptions cost me about $2000 per year (roughly $495 a quarter). After much researching (and a very long spreadsheet), went on my wife's plan as she had access to a plan through her retirement plan. Cost of my monthly premium doubled, but our overall cost dropped substantially due to the drug costs going from $495 for 90 days to $30 for 90 days.

Critical for any analysis of a Medicare plan.


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I’m 74 and had the UHC advantage plan. Started out at $6/mn and last year they want $55. I went to Humana for $0/mn with additional amount of dental and vision I didn’t get from UHC.

It pays to compare plans on the Medicare website.

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