Changing From Advantage To Medigap


Medicare’s Annual Election Period starts this month.  It runs from October 15 to December 7 this year.

During this time, those with Medicare may not only change their Advantage and Medicare elections, they are allowed to disenroll from Advantage and return to Original Medicare.

A couple of weeks ago, I was asked, “Would I be better off leaving my Advantage  plan and returning to Original Medicare?

That is a hard question to answer.  Regardless of how simplistic politicians and the press make it sound, some people are better off with Advantage and some are better served by Original Medicare.  The answer requires you to review your health-care needs.

There are several good things about Advantage plans.

  • Advantage plan premiums are typically lower than Medigap.
  • Advantage plans have a limit on how much you would pay each year.
  • Many Advantage plans have benefits that are not in Original Medicare.
  • Advantage plans are administered by private health insurance companies and not the government.

However, there are also some bad things about Advantage plans.

  • Most Advantage plans are geographically limited.  That means that you are only able to get non-emergency treatment within your area.
  • Most Advantage plans use a specific hospital or list of doctors.  If you go get non-emergency treatment from a non-participating hospital or doctor, it will not pay.

I have worked with many people who have focused on the good things about Advantage and ignored the bad things until it is too late.

Advantage plans can be an excellent option to Original Medicare for those people who take the time to understand their plan.  It can, just as easily, become a nightmare to those who don’t take the time to understand how to use their policy.

At The Insurance Barn, we offer both Advantage and Medigap plans.  We do not have a biased towards either Advantage or Original Medicare.  The most important thing is that you choose the best Medicare option for your needs.

In the next few weeks you will be able to cancel your Advantage plan and return to Original Medicare.  For some people, that will be a good move.  However, for others, that may be the equivalent of “jumping out of the frying pan and into the fire.”

MEDICARE D

Original Medicare does not cover prescription drugs.  Many people get their prescription drug coverage through their Medicare Advantage plans.  Although you will automatically be enrolled in Medicare parts A & B when you cancel your Advantage plan, you will not automatically be enrolled in Medicare D.

It will be up to you to select and enroll in a stand-alone Medicare D plan for your prescription drugs.  The good news is that if you elect a Medicare D plan right away, enrollment in the popular insurance program is guaranteed. If you fail to choose a Medicare D plan within the period of time that Medicare allows, you must wait until the next Annual Enrollment Period to join a plan.

Not only do you have to wait, when you are able to enroll in a Medicare D plan, Medicare will charge you a penalty for the rest of your life for each month that you could have been in the Medicare D program but were not.

MEDIGAP

One of the most striking benefits to Advantage is that it is required to have a limit on the amount you must pay for health-care each year.  That benefit is normally called a Maximum Out-of-Pocket, MOOP or OOP.

Unfortunately, Medicare B has no such limit.  Under Original Medicare, you are required to pay 20% of the Medicare approved charges from your doctor and any “Excess Fees” that he may charge.

By way of example, assume that a person on Medicare is diagnosed with cancer and requires $100,000 of out-patient health-care.  If they are covered with just Original Medicare, their portion of the medical bills is $20,000.  They will have to pay their doctors $20,000 or risk being the target of debt collectors.

There are 10 different Medigap plans available in most states.  If they have the most popular Medigap plan, plan F, their liability can be as low as $0.  All they have to do is pay their premium.

Unfortunately, Medigap coverage is not guaranteed for all people who cancel their Advantage plan to return to Original Medicare.  It is only guaranteed in one of the following cases provided you apply for Medigap within 63 days.

  • Your Advantage plan was canceled by your insurance company.
  • You had a Medigap previously.  You canceled it to get an Advantage plan.  You have had it for less than one year and want to return to Original Medicare.
  • You elected Advantage when you were first eligible for Medicare and want to return to Original Medicare within 1 year.
  • You were misled into buying Advantage or your insurance company failed to follow the rules.

If you disenroll from Advantage to return to Original Medicare for any other reason, or wait longer than 63 days to apply for Medigap, you must medically qualify.  A person who is still in decent health needn’t worry.  However, a person who is being treated for a health condition should do some further investigation before dropping their Advantage plan simply because they are mad.

“SHOULD I DISENROLL FROM ADVANTAGE?”

The Advantage program is not inherently evil.  For some people, it is a god-send.  For others, it is a snare of Satan.  Only you can decide which it is in your life.

The best advice that I can give you is to not allow others to make your decision for you.  One friend may be willing to live with the restrictions in their Advantage plan.  Another friend may not.  You need to decide which is better for you.

The only thing that I will say is to remind you that all Advantage plans are not the same.  Before you elect to disenroll from the Advantage system, do some comparison shopping.  You may be able to find another Advantage plan with a different insurance company that better meets your health-care needs.

Advertisements