Medicare Advantage plans have a secret life. The carrier won’t tell you. Neither will the agent. If you knew these secrets you might change your mind about signing up for one. Consider this. Why does if Medicare Advantage plans are so great, why does Medicare give you an escape clause? Why do some agents that sell you on the idea of an Advantage plan tell you to throw away your red, white and blue Medicare card? Why do agents push Medicare Advantage plans so much? Is there something you need to know that they aren’t telling? Do these Advantage plans really have a secret life? And how can they push these Free Medicare Plans? What’s the catch? Why is turning 65 so difficult when it comes to Medicare?
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- Turning 65 and signing up for Medicare. How?
- How good are the free Medicare plans?
- Why do most agents push $0 premium Advantage plans?
- How do I get out of the Advantage plan when I realize I made a mistake?
- Why can’t I keep my doctor?
Medicare Advantage plans secret life
Wanda is turning 65 in a few weeks and is totally confused. Should she stay on her husband’s group insurance plan or go in Medicare? Original Medicare or a Medicare Advantage plan? And what’s up with this free Medicare plan a lot of her friends have?
Wanda was referred to me by a dear friend. The two of them had lunch earlier in the day and Wanda told Emily (our mutual friend) that she was turning 65 in a few days and totally confused.
Emily mentioned my name and then emailed me with a copy to Wanda. I called Wanda shortly after responding to the email.
Wanda’s husband works for a big company in Atlanta. They have a very good group health plan through his employer. The plan covers Wanda, her husband and their youngest child. The company pays all but $600/month for health insurance, vision and dental coverage.
Wanda has not signed up for Medicare.
After a short phone conversation I told Wanda what she needed to do.
- Go online today and sign up for Medicare Part A only.
- Keep the group plan, at least for now.
- Do not sign up (yet) for Medicare Part B, Part D or a supplement plan.
- Throw away all the literature that has been coming in for the last few months.
- Stop talking to your friends.
- Forget about the free Medicare plans agents are pushing
- Call me when your situation changes and you are ready to go on Medicare Part B
That’s it. No sales pitch. No arm twisting. Just an honest appraisal of the situation and advice.
But what about the secret life of Medicare plans?
Why do your friends sign up for a “free” Medicare plan?
Well, it’s pretty simple. They signed up for a “free” plan because somebody talked them into it.
If someone tells you something is free, don’t you get suspicious? Have you ever received anything of value that was truly free? Isn’t there always a catch?
Here is the first catch.
Medicare does not allow an agent to tell you their Advantage plan is free. If they do say that, they are violating the CMS marketing rules.
$0 premium Medicare plans are not free.
- You still have to pay your Medicare Part B premium.
- You are not allowed to use your red, white and blue Medicare card.
- Every time you see a doctor, have lab work, a scan, are admitted to the hospital you have to pay.
- If you want to keep your out of pocket costs to a minimum you must use THEIR doctors and hospitals.
- Your out of pocket costs could easily exceed $500 per month under an Advantage plan.
- And if these plans are so great, why does Medicare allow you to dis-enroll?
One Other Thing in the Secret Life of Advantage Plans.
Medicare does not allow agents to tell you about ALL the plans in your area, only the ones they can sell and earn a commission.
The agent can legally only show you one carrier at a time. If you want information on another carrier Medicare rules say they must wait 48 hours before telling you about the other plan. Apparently the folks at Medicare think you are not smart enough to consider more than one plan at a time.
How silly is that?
So why do agents and carriers push Advantage plans?
They are profitable.
An agent that sells you an Advantage plan makes twice as much commission as they would by offering you a Medicare supplement plan. That alone is pretty good incentive but to make it even better they are paid their full years commission the month after your coverage goes into effect.
You sign up in October. Your coverage goes into effect in January. In February your agent collects $400.
Even on that $0 premium plan.
No Premium? How Can That Be?
As if that isn’t enough, some agents will tell you how great the Advantage plan is because you only have to pay $250 per day for the first 7 days you are in the hospital.
Then they will tell you that you need a plan to cover that contingency and will proceed to sell you an extra plan for only $38 per month.
The agent pockets 60% of your monthly premium as their compensation. That’s another $274 in commission over the next 12 months.
Next they might ask if cancer runs in your family, or if you know anyone that had cancer.
The good news is your $0 premium plan pays 80% of the cost of your chemotherapy treatment.
The bad new is, you pay the remaining 20%. The worse news is, some chemotherapy treatments run in excess of $3,000 each.
Medicare pays $2400. You pay $600.
For each treatment.
You really should consider a cancer plan to cover that out of pocket cost. For only $40 per month you can have a plan that covers the costs of chemo and pays you a flat $1,000 for your initial diagnosis.
The agent pockets 60% of that premium as well.
Now your $0 premium plan is costing you $78 per month but at least you have your out of pocket costs for a hospital stay covered as well as your chemotherapy.
And the agent made $962.
You should have called me.
For about the same monthly premium you pay nothing for a hospital stay and your chemo is only $147.
Not per treatment but for the entire year!
And you no longer need to pay for a hospital inpatient plan or a cancer plan.
How sweet is that?
Your Medicare Escape Clause
If your Medicare Advantage plan is so great, why does Medicare give you an escape provision?
That’s right. If you enroll in a Medicare Advantage plan and later discover you don’t like it you can quit the plan (Medicare calls it dis-enrolling) and go back to original Medicare. It’s called a Trial Right.
You also have an annual dis-enrollment period that runs from January 1 through February 14.
All these ways to QUIT a Medicare Advantage plan. Is it any wonder why it is called the secret life of Advantage plans?
Of course if your agent told you to throw away your red, white and blue Medicare card you will need to get Medicare to send you a new one.
Don’t expect the agent that sold you the Advantage plan, and the hospital plan and the cancer plan to tell you that you can always change to original Medicare if you don’t like the Advantage. Your Trial Right is just another part of the secret life of Advantage plans.
As long as we are talking about secrets, here are some things you need to know.
- Your Trial Right period doesn’t last forever
- Your Trial Right may entitle you to purchase ANY Medigap plan.
- Or you may be limited to only certain plans pre-selected by Medicare
- Unless you exercise your trial right correctly you may have to go without drug coverage until the next open enrollment
- Your annual dis-enrollment period comes with some barbs.
When you first turn 65, if you reject original Medicare for an Advantage plan that may be the only time you could enroll in a Medicare supplement plan without restriction.
Did you ever wonder how the insurance company can offer you coverage and not charge a premium but still pay the agent over $400 for enrolling you?
It’s a secret.
Managed care has been part of the fabric of health insurance for 30 years now but too often managed care becomes mangled care. When an insurance company bureaucrat that knows nothing about you or your medical condition decides on your care the outcome is mangled care.
When you reject original Medicare the government pays the insurance carrier a monthly fee to cover some of your expenses. The less THEY pay for your care the more money they get to keep.
When you are diagnosed with cancer ….
- THEY get to pick your doctor
- THEY pick your hospital
- THEY decide which treatment is best for you based on the lowest cost to THEM
- THEY pay 80% of your chemotherapy (the same amount Medicare pays) and you pay the remaining 20%
Original Medicare does not have mangled care. With original Medicare and your red, white and blue card
- YOU pick your doctor
- YOU pick your hospital
- YOU and your doctor decide which treatment is best for you
Original Medicare pays 80% of the cost of your chemo but with your supplement plan your share is $0 if you have plan F or $183 for the entire year if you have plan G.
One other thing about Advantage plans.
Depending on where you live there may be anywhere from 3 to a dozen Advantage plans available.
- But your agent can only tell you about the plans he or she is approved to sell.
- If you want to find out about ALL the plans you have to talk to more agents
- Each agents can only tell you about the plans they are approved to sell
- Your agent is not allowed to compare one plan vs. the other
Agents will never tell you this (but I will), you can find out about ALL the plans in your area by calling Medicare. That’s part of the secret life of Medicare Advantage plans. Agents can’t tell you about all the plans in your area.
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I will answer all your questions. Offer advice and let you decide which plan meets your needs and budget.
No secret life.
Give us a call. We want to help.
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