In today’s retirement world, living on a fixed income during periods of rising inflation and corporate profit taking can be downright challenging.  Medicare Advantage plans have taken the nation by storm, fueled from the constant television ads and barrage of phone calls at all hours of the day from overseas call centers skirting around Medicare communication guidelines.

Depending on your geography these Medicare Advantage plans can include fitness benefits (i.e. SilverSneakers), dental, vision, hearing and prescription coverage.  All of this for no monthly premium?

How is all of this possible, and what’s the catch?

About half of American retirees today are on a Medicare Advantage plan as their choice of coverage.  Depending on the county you live in, there might be more than 50 different plans to choose from.

How in the world do you know which is the right one for you when first enrolling or checking to confirm you have the right one based on your specific needs? The options are absolutely overwhelming.

Medicare Advantage plans are required to have an out-of-pocket maximum.  If someone were to have a really bad year being in and out of the hospital multiple times in a year with ambulance rides and surgeries, they might be nearing that maximum.

That cap is a significant benefit that brings peace and can allow Medicare members to sleep better at night.  Those that only have Original Medicare do not have this luxury as they have no out-of-pocket maximum and only have the absolute minimum protection.

So how does all of this work? If you pay $0 premium, how do you get all of this Medicare coverage?  Medicare Advantage plans are paid on what is called capitation.  The insurance companies receive a fixed amount up front to take care of an individual over a certain period of time.

For the most part, the amount of monthly premium you are willing to pay is a signal to how much risk you are willing to take on.  The lower the monthly premium, the higher the financial risk in out-of-pocket maximums, copayments, coinsurance and/or prescription costs.

Certain benefits such as a dental benefit might be lower or certain dental services not offered with $0 plans, but this will depend on your specific geography.

Insurance companies that offer Medicare plans will offer an annual checkup or wellness visit.  If you do get one, it’s in your best interest to have it performed by your trusted primary care physician.

Know that the insurance company is incentivized through these and similar appointments.  A health care provider may find a health concern or issue for which they can bill the insurance company more money for taking care of you because you might now be a higher risk from an insurance standpoint.

The goal of the insurance company is to keep you as healthy as possible and capture every last dollar from Medicare (funded by taxpayers) to optimize their profit. Some insurance companies are pushy about annual visits, as it’s always best to get the care you need and catch diagnoses early.

As the cost of living increases while on a fixed income, Medicare Advantage plans play a critical role.  We spoke with one person this week that is on a Medicare Supplement paying the following each month:

• $164.90 for the monthly Part B premium (usually deducted from Social Security)
• $380.00 per month for the Medicare Supplement premium
• $7.00 per month for the prescription drug plan, plus the cost of prescriptions

This combines to a total of at least $550 per month in premiums! Most of the people that reach out to us to provide Medicare guidance can’t afford shelling out $550 or $1,100 per month as a couple.

For those that can afford this and the annual rising cost of the Medicare Supplement plans, more power to them!

The reality is that most people can’t afford a large monthly premium like this during their retirement years.  It’s challenging enough to buy some gas for the car and weekly groceries.

For those that can afford a little bit of premium for a Medicare Advantage plan, you’ll likely be removing some critical risks such as a per day cost at the hospital versus a per stay cost.  Again, the options entirely depend on what’s offered in your area.

Know your health, your family’s health history (e.g., if you have a family history of cancer), and the level of risk that you’re willing to take on with a Medicare Advantage plan.  Do you need more dental work completed, or do you have an expensive upcoming surgery?

Many people that we work with absolutely love the Medicare Advantage plans and the critical coverage that these plans provide that couldn’t be afforded otherwise.

For those that meet certain income and asset limitations, they might qualify for the Low Income Subsidy program (LIS) through Social Security that helps limit cost for prescriptions. Another assistance program, Medicaid or Medical Assistance, can help pay for some or all of the Medicare Part B premium for those that meet those income and asset requirements as well.

We have been able to help ease financial burdens of others by helping them understand and apply for these and other programs offered in their area. It puts a smile on their face, thereby putting a smile on our faces as well.

As an aside, there are also $0 premium Medicare Advantage plans that are tailored to veterans or those who don’t have or need prescription drug coverage.  These plans tend to offer better dental coverage in addition to what’s called a Part B giveback.

A credit of a certain amount, for example $100, is put towards the monthly Medicare Part B premium, which increases the Social Security benefit amount. Veterans love these plans as they complement what they already have with their VA benefits.

Medicare is extremely complex and confusing!  Reach out to us today to see how we can be of help analyzing your situation and providing guidance.  We work with those who are first enrolling to Medicare and those that have been on Medicare for decades to ensure they have the right coverage for their situation.

info@superiorfinancialgrp.com
www.retirementbenefitpros.com

Photo by by Mikhail Nilov