Medicare and Major Medical Question

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Topic Author
jdjd2
Posts: 30
Joined: Thu Feb 14, 2013 10:47 am

Medicare and Major Medical Question

Post by jdjd2 »

Later this year, we will sign up for Medicare Part B. I've been researching various health plan alternatives from my former employer, and my wife's soon to be former employer. We will either go with a Medicare Supplement plan from AARP United Health Care (UHC), or an Anthem Medicomp plan from my wife's current employer. In either case we will also get a Humana Walmart Rx Part D plan.

The Medicomp plan looks attractive for one major reason - it includes a $1M/person Major Medical benefit that covers what the Medicomp Comprehensive benefits do not cover. The Medicomp plan looks a lot like a Medigap Plan F, i.e. no deductibles, or co-pays or co-insurance to pay.

However, this comes with an increase in cost. Using our 2014 medical costs as a basis for comparison, AARP UHC Plan K would cost us ~$1K/year for both, Plan F ~$2.8K/year for both, and Medicomp ~$4.7K/year for both. These costs factor in the premium cost for the policy, the Plan D cost, our actuals for 2014, and specific cost reductions from my former employer or my wife's health plan dependent on which we take. These costs include the Part D premium, but not the Part B premium.

Assuming we both live for another 25 years, the Medicomp plan would cost us ~$92K ($46K/person) more over Plan K, or $46K ($23K/person), or $46K ($23K/person) more over Plan F. On a yearly basis, this is $3,680 (over Plan K) or $1,864 (over Plan F) for both of us.

Looking at it from a yearly basis, or from a 25 year basis, this would seem to be a low cost for the $1M Major Medical benefit for each of us.

Questions are:

- Is this a no brainer, i.e. a good deal?

- If I decided to take an AARP UHC plan and separately buy a Major Medical plan, what carriers have such a plan?

- If someone reading this has a separate major medical policy, who is the carrier and what is its yearly cost?

thanks!
Topic Author
jdjd2
Posts: 30
Joined: Thu Feb 14, 2013 10:47 am

Re: Medicare and Major Medical Question

Post by jdjd2 »

After a google hour search, I've found little. Seems like most articles or carriers associate Medigap with Major Medical. I'm looking for possible Major Medical policies in addition to medigap.

I did find USAA might have a plan; I'll call them later today to see if this is really a Major Medical plan, or a Medigap plan.

Back to my searching ....
swong6
Posts: 16
Joined: Fri Nov 21, 2014 9:08 am

Re: Medicare and Major Medical Question

Post by swong6 »

jdjd2,
FOLLOW THE MONEY! Like yourself I retired last year and finally enrolled in the Walmart/Humana Part D drug plan. Since I live in NYC I enrolled in a high deductible Plan F instead of the regular Plan F offered by AARP/UnitedHealthCare. Reasoning was I am relatively healthy and am NOT on any medications whatsoever. I knew when Medicare picked me up last year I had to get a part B and D otherwise there would be penalties incurred if and when I eventually applied for pat D. Here in NYC the only high deductible Plan F offered was through First United American which I enrolled. For me it was a no-brainer... I pay roughly $63/month for my Plan F and roughly $15.70/month for my Walmart Part D which is as cheap as they come. There will come a time when my health degrades but until then this was what I have for coverage. Almost half year has past and other than a lack of dental insurance (ugh!), and the thought of paying $2300 before my high deductible plan kicks in it's how I limit outflows of money
Topic Author
jdjd2
Posts: 30
Joined: Thu Feb 14, 2013 10:47 am

Re: Medicare and Major Medical Question

Post by jdjd2 »

FOLLOW THE MONEY!
Yes, but ...

While there are ~19 Medigap crriers in my state there are only 4 that I can take from my former employer and still get this $1,080/person. None of the 4 have a high deductible Plan F.

If i followed the money, I would go with Plan K for $67.50/person/month. My former employer gives us $1,080/person to defer the cost of our Medigap policy. The $1,080 would not only cover this cost, but also some of my Part B costs. Additionally, AARP UNC allows one to switch between plans with no new application, basically like a Guaranteed Issue.

However, the added Major Medical benefit of $1M/person looks attractive. But is it worth the added cost of my wife's plan that has it? Or stated another way, is $3,680/year more over Plan K, or $1,864/year more over Plan F for both of us, worth the cost for the potential future need for this $1M/person?
kaneohe
Posts: 6786
Joined: Mon Sep 22, 2008 12:38 pm

Re: Medicare and Major Medical Question

Post by kaneohe »

I am trying to understand what a major medical policy will cover that a good medigap policy won't.
Topic Author
jdjd2
Posts: 30
Joined: Thu Feb 14, 2013 10:47 am

Re: Medicare and Major Medical Question

Post by jdjd2 »

I am trying to understand what a major medical policy will cover that a good medigap policy won't.
Today, we talked with a retirement specialist for the plan with the $1M Major Medical. She noted that it is rarely needed. Examples might include, an eye exam refraction which is not covered by Medicare Part B, nor the supplement. Or a 2nd ambulance ride to get to a rehab center. Medicare will cover the 1st to the hospital, but (in her real example), the $800 ride to the rehab center would not be covered by Medicare. As she noted, it would take a lot of such examples to even make a dent in thre $1M. So paying these possibly few costs out of pocket would probably be cheaper than the added differnce in cost for this plan. If we never planned to tracvel/live abroad, then I would skip this plan and save the dollars.

Where it could be of value is if we take extended trips, e.g. 6 - 9 months, abroad. Here we are not relocating, just staying for a much longer period of time than a normal travel abroad vacation. I expect we would do this a few times over the next 5 - 10 years. Then Medicare does not cover us out of the country. Normal care like gyn visits, etc. would not be covered. But any emergency care, urgent care, upset stomach, etc. would be covered. Major Medical would cover this.

So how likely is it that this would happen? And how likely would it be that we could not fly home for care in an emergency? All good questions. but this is probably a more likely use of the Major Medical.

If it were not for the fast that my former employer subsidizes our Plan F ($1,080/person), then it would be an easy decision since Plan F and this plan are almost equivalent in price. Of course, I could take Plan K which is even less expensive, and switch to Plan F as needed uner AARP UHC.

My wife and I also recalled that we have no LTC. I'm not big on buying LTC, even with a life insurance policy. So I am taking a risk here.

The risk in not taking the plan with the Major Medical is much the same. It is just that for possibly as little as $1K.year/person we could have this benefit. LTC, I believe, would be much greater in cost, not to mention all the small print of what is/is not covered.

So I'm still debating this.

I'm not looking for someone to make up my mind, rather just your thoughts so I can make a more informed decision. Once made, that is it. No going back.

Anyone else have some input?

thanks
mur44
Posts: 718
Joined: Tue Feb 27, 2007 8:30 am

Re: Medicare and Major Medical Question

Post by mur44 »

Medicare beneficiaries rarely buy 'major medical'
insurance. Please note that Medicare would cover
ambulance expense indirectly (hospital will transport
to skilled nursing and thus included in their bill
provided one stayed as in-patient for 3 days or more).

Boglehead rule of thumb is not to buy insurance for
expenses that you can cover yourself.

For free and unbiased advice, please contact your
local SHIP (State Health Insurance Assistance Program):

http://www.shiptacenter.org/

Disclosure: I am a Certified Volunteer Medicare Counselor from NJ
swong6
Posts: 16
Joined: Fri Nov 21, 2014 9:08 am

Re: Medicare and Major Medical Question

Post by swong6 »

jdjd2,
Let me provide you with what I did when I lost my company medical once I reached age 65 when Medicare picked me up. Because I am extremely healthy at age 65 (normal ailments not illnesses such as just a hernia and kidney stones typical for old people) I wanted the best coverage as a Medicare recipient. Cadillac plans for me here in NYC was solely the Plan F sold via AARP however monthly premiums were roughly $261/month (3100/year when you do the math). Instead I went with the "only" high deductible plan F which was sold by First United American for $61/month ($732/year). Difference in yearly cost is $3100 minus $732 = $2400. If I stay health (again, nothing is ever certain) I can bank this $2400 however if bad luck befalls me a one night stay in any NYC hospital will exceed this $2400. Nothing is ever guaranteed in life but savings money should be everyone's objective.
There will come a time when my health fails but consciously spending money wisely is very important. It's real easy to spend but at our age it's now difficult to earn. Example: I purchased our home right after getting married in 1979. Did all the major work myself but I find at the age of 65 I can no longer nor wish to climb ladders, repair a flat roof, etc so when repairs are needed I contract out. Earn your money when you are young, invest and save wisely, and spend when needed. Your situation is probably NOT identical to mine however you get the point.....FOLLOW THE MONEY
dolphinsaremammals
Posts: 2094
Joined: Tue Jul 22, 2014 4:18 pm

Re: Medicare and Major Medical Question

Post by dolphinsaremammals »

jdjd2 wrote: Today, we talked with a retirement specialist for the plan with the $1M Major Medical. She noted that it is rarely needed. Examples might include, an eye exam refraction which is not covered by Medicare Part B, nor the supplement.
Eye prescription exams cost $35 where I live. It's the glasses that are expensive.

I am wondering what medical care normally costs out of the country. If one is in a country with a national health service, are foreigners able to use that? Is it expensive? I have the idea US medical charges are very high compared to other industrialized nations. I seem to recall anecdotes from traveling friends to the effect that they got good care for peanuts.
toofache32
Posts: 2349
Joined: Sun Mar 04, 2012 5:30 pm

Re: Medicare and Major Medical Question

Post by toofache32 »

jdjd2 wrote:Later this year, we will sign up for Medicare Part B. I've been researching various health plan alternatives from my former employer, and my wife's soon to be former employer. We will either go with a Medicare Supplement plan from AARP United Health Care (UHC), or an Anthem Medicomp plan from my wife's current employer. In either case we will also get a Humana Walmart Rx Part D plan.
There is a plan in my area marketed under United Healthcare and marketed by AARP and administered by a 3rd party called Secure Horizons. I have not had a good experience with them and dropped them.
dolphinsaremammals
Posts: 2094
Joined: Tue Jul 22, 2014 4:18 pm

Re: Medicare and Major Medical Question

Post by dolphinsaremammals »

toofache32 wrote:
jdjd2 wrote:Later this year, we will sign up for Medicare Part B. I've been researching various health plan alternatives from my former employer, and my wife's soon to be former employer. We will either go with a Medicare Supplement plan from AARP United Health Care (UHC), or an Anthem Medicomp plan from my wife's current employer. In either case we will also get a Humana Walmart Rx Part D plan.
There is a plan in my area marketed under United Healthcare and marketed by AARP and administered by a 3rd party called Secure Horizons. I have not had a good experience with them and dropped them.
I think those are different plans.

I have not sussed out why plans with some companies in common are so different in effect. For example, UHC ran my last employer's health insurance and they were TERRIBLE, out to deny care whenever possible; on the other hand, I have had AARP Medigap administered by UHC for several years, and I have nothing but good things to say about it, it's night and day different.
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