Need for Medicare supplemental plan?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
barefootjan
Posts: 365
Joined: Mon Feb 19, 2007 6:45 pm
Location: New England

Need for Medicare supplemental plan?

Post by barefootjan » Fri Mar 16, 2018 11:05 am

This article is about 5 years old but it really stunned me. Is this true? Can anyone here either verify or dispute the author's conclusion?
If you’re on Medicare or about to receive Medicare you might be wondering: “should I also get supplemental health insurance?” The truth is, if you get supplemental insurance for free (for example, from your former employer), then sure. Otherwise, if you have Medicare and buy a supplemental policy with your own money, you are effectively giving an insurance company your money so that they can keep it.
This definitely sounds like something a Boglehead would know!

https://www.huffingtonpost.com/david-be ... 01861.html

Chris K Jones
Posts: 50
Joined: Sat Jan 20, 2018 6:54 pm

Re: Need for Medicare supplemental plan?

Post by Chris K Jones » Fri Mar 16, 2018 11:26 am

Thanks for posting this. Not sure what I believe. You would think that the government would keep some sort of statistics about how much supplemental policies pay. Or Consumer Reports? I wonder how necessary these policies are.

racy
Posts: 188
Joined: Sun Mar 30, 2008 7:38 am
Location: Nebraska

Re: Need for Medicare supplemental plan?

Post by racy » Fri Mar 16, 2018 11:27 am

I hate buying insurance (and never extended warranties), but we do buy Medicare Plan G since we do travel outside the US. So, I'm covered if the tour bus backs over me or if I if a fall down & get a concussion going down the ramp of a Viking river cruise boat.

Carl53
Posts: 1536
Joined: Sun Mar 07, 2010 8:26 pm

Re: Need for Medicare supplemental plan?

Post by Carl53 » Fri Mar 16, 2018 11:30 am

I was thinking about this as I have just signed up for Medicare and Supplemental. I went with the supplemental G for about $106 despite being quite healthy but do have a couple of doctor visits per year and use some medical supplies on a semi-regular basis, because of the threat that you might not be able to get coverage later should you decide to or have to pay a much higher premium. I will monitor costs of my medicare coverage for a while and possibly reconsider the supplemental vs risk at a later time. Past history would indicate that potential future expenses might be broken bones or skin cancer removal, or breathing aids down the road.

User avatar
dm200
Posts: 15718
Joined: Mon Feb 26, 2007 2:21 pm
Location: Washington DC area

Re: Need for Medicare supplemental plan?

Post by dm200 » Fri Mar 16, 2018 11:49 am

DW and I each have a Kaiser Medicare plan (medicare cost in this area - much like medicare advantage) and cannot purchase a supplement.

For those on Original medicare, it is my opinion that the biggest risk of going without a supplement is not (for most) the portion of costs not paid by Original medicare - but the limits of Original medicare when you have to pay 100% unless you have a supplement.

While most (but not all) medicare Advantage (and medicare cost) plans have annual out of pocket maximums of several thousand dollars (ours is $6,000), since the premiums are generally low (ours is $30/month) you can offset the out of pocket annual risk to a great degree by not paying many hundreds of dollars for a supplement as well as part D premiums (drug coverage is part of our plan at $30/month)

earlyout
Posts: 1342
Joined: Tue Feb 20, 2007 5:24 pm

Re: Need for Medicare supplemental plan?

Post by earlyout » Fri Mar 16, 2018 11:58 am

Isn't it obvious that supplemental health insurance has to be losing proposition for the average individual? (Unless you need it of course.)

Supplemental insurance is a commercial product and the insurance companies would not sell it unless they could make a profit. I can't self insure for a catastrophic illness that would leave me with 20% of some very large bills after Medicare paid it's 80%. I also like to have health insurance when I am outside the US. Supplemental insurance provides peace of mind I would not get with just Medicare.

BBBob
Posts: 83
Joined: Tue Aug 11, 2015 12:25 pm

Re: Need for Medicare supplemental plan?

Post by BBBob » Fri Mar 16, 2018 12:00 pm

Consider this:
https://www.senior65.com/medicare/artic ... gap-plan-f

"Worst" case: I have Supplemental for the same reason I have homeowner insurance; I'll probably net a loss over the decades, but I sleep well at night.

barefootjan
Posts: 365
Joined: Mon Feb 19, 2007 6:45 pm
Location: New England

Re: Need for Medicare supplemental plan?

Post by barefootjan » Fri Mar 16, 2018 12:07 pm

I just want to add that this guy David Beck seems fairly invested in this topic. He has a whole blog devoted to it. This next article is also dated, but here he expands on his issue with supplemental plans: http://truecostofhealthcare.org/medicar ... insurance/

I went to the Medicare.gov site to see what they say now, in 2018. Here's the link https://www.medicare.gov/supplement-oth ... digap.html

I think my husband has the high deductible F plan. It's not real expensive, but with no maximum OOP, I'm not really sure what benefit he gets, aside from not being asked medical questions if he went off supplemental insurance but later wanted to get back on?

We're relatively young and already overwhelmed when it comes to making some of these choices. I can't imagine what it's going to be like trying to keep up with this stuff if we make it into our 70s or 80s.

Spirit Rider
Posts: 7604
Joined: Fri Mar 02, 2007 2:39 pm

Re: Need for Medicare supplemental plan?

Post by Spirit Rider » Fri Mar 16, 2018 12:08 pm

nariobuy insurance to manage risk. A common mistake that people make when comparing insurance to being self-insured is to compare insurance costs vs. likely needs.

That is absolutely the wrong comparison. You should compare insurance costs to the worst case scenario. People tend to only compare the consequence of the likely 20# co-insurance on Part B office visits.

When they should compare the astronomical costs from Part B out patient co-pays (look up "under observation"), massive hospitalization and skilled nursing care co-pays.

I have known several people with $50K - $100K+ such stays. Luckily most had Medicare Supplement plans and paid little to nothing, but I know one person who lost the majority of there already modest retirement savings because they refused to pay for a supplement plan, even a high deductible Plan F.

User avatar
midareff
Posts: 5427
Joined: Mon Nov 29, 2010 10:43 am
Location: Biscayne Bay, South Florida

Re: Need for Medicare supplemental plan?

Post by midareff » Fri Mar 16, 2018 12:15 pm

racy wrote:
Fri Mar 16, 2018 11:27 am
I hate buying insurance (and never extended warranties), but we do buy Medicare Plan G since we do travel outside the US. So, I'm covered if the tour bus backs over me or if I if a fall down & get a concussion going down the ramp of a Viking river cruise boat.
Is that an AARP United plan?

barefootjan
Posts: 365
Joined: Mon Feb 19, 2007 6:45 pm
Location: New England

Re: Need for Medicare supplemental plan?

Post by barefootjan » Fri Mar 16, 2018 12:19 pm

Spirit Rider wrote:
Fri Mar 16, 2018 12:08 pm
A common mistake that people make when comparing insurance to being self-insured is to compare insurance costs vs. likely needs.

That is absolutely the wrong comparison. You should compare insurance costs to the worst case scenario.
:oops: Thank you so much for this! I'm copying it to a sticky note that I can leave on my computer monitor. :D

User avatar
FrugalInvestor
Posts: 4652
Joined: Fri Nov 07, 2008 12:20 am

Re: Need for Medicare supplemental plan?

Post by FrugalInvestor » Fri Mar 16, 2018 12:39 pm

On the average what the article states may be true but in the case of a serious health condition it may not. I don't know if my experience will be average and I want to insure against a health catastrophe.

I also know that as I age I will likely become less proficient at handling my finances. For that reason I will eventually purchase a SPIA to go along with my Social Security (I have no pension) and have already simplified my portfolio about as far as possible. My supplement plan (G) will prevent me and my wife from having to deal with a lot of medical billing paperwork at a particularly stressful time because everything with the exception of my annual deductible will likely be covered.

Dr. Belk makes some excellent points. I read his articles prior to going on Medicare and they made me think. But in the end it came down to more than just dollars and cents for me.
IGNORE the noise! | Our life is frittered away by detail... simplify, simplify. - Henry David Thoreau

btenny
Posts: 4396
Joined: Sun Oct 07, 2007 6:47 pm

Re: Need for Medicare supplemental plan?

Post by btenny » Fri Mar 16, 2018 12:46 pm

I have high deductable plan f that costs $42 per month. It limits my maximum out of pocket to $2K per year. I have had it for six years. It paid a little one year when I had to have a surgery that cost about $10K but has paid nothing otherwise. But if I had big bills like a $100K for a long hospital stay it would help a lot. It also covers some out of US travel stuff. I also have a air evacuate policy to cover that risk for $80ish per year.

So some suppliments are OK.

Good Luck

User avatar
dm200
Posts: 15718
Joined: Mon Feb 26, 2007 2:21 pm
Location: Washington DC area

Re: Need for Medicare supplemental plan?

Post by dm200 » Fri Mar 16, 2018 2:27 pm

Am I correct that the Medicare Supplement plans are insurance company offerings that are "self supporting"? In other words, each plan and/or each insurance company must set premiums and benefits (within the Medicare rules) such that the premium income must cover benefits paid AND the operating costs of the insurance company (including allowable profit)?

Good Listener
Posts: 497
Joined: Wed Dec 30, 2015 5:24 pm

Re: Need for Medicare supplemental plan?

Post by Good Listener » Fri Mar 16, 2018 4:02 pm

I have Plan F which covers everything Medicare doesn't pay, including the deductible. It's not worth the difference over G dollarwise but I enjoy not having any bills. I think it would be a horrible mistake to not have a supplement plan that covers the 20% Medicare doesn't pay. A very horrible mistake. Because if you get cancer or a stroke or heart attack, bills can be hundreds of thousands of dollars.

delamer
Posts: 4184
Joined: Tue Feb 08, 2011 6:13 pm

Re: Need for Medicare supplemental plan?

Post by delamer » Fri Mar 16, 2018 4:06 pm

barefootjan wrote:
Fri Mar 16, 2018 12:19 pm
Spirit Rider wrote:
Fri Mar 16, 2018 12:08 pm
A common mistake that people make when comparing insurance to being self-insured is to compare insurance costs vs. likely needs.

That is absolutely the wrong comparison. You should compare insurance costs to the worst case scenario.
:oops: Thank you so much for this! I'm copying it to a sticky note that I can leave on my computer monitor. :D

We have owned our house for 20 years and paid roughly $20,000 in homeowner’s insurance premiums. We’ve never made a claim.

I am very happy with that situation. Because I know if the house burns to the ground (happened to some acquaintances), we will get most of the several hundred thousand needed to replace it from State Farm.

That is what insurance is for — to guard against catastrophic expense. But in the meantime, you hope there never is one.

jebmke
Posts: 7631
Joined: Thu Apr 05, 2007 2:44 pm

Re: Need for Medicare supplemental plan?

Post by jebmke » Fri Mar 16, 2018 4:33 pm

delamer wrote:
Fri Mar 16, 2018 4:06 pm
That is what insurance is for — to guard against catastrophic expense.
Right, think about life insurance. Your preference would be to not collect any benefits. You are betting you will die and hoping they win.
When you discover that you are riding a dead horse, the best strategy is to dismount.

mouses
Posts: 3013
Joined: Sat Oct 24, 2015 12:24 am

Re: Need for Medicare supplemental plan?

Post by mouses » Fri Mar 16, 2018 5:09 pm

I haven't read all the replies, but I have had regular Medicare and Medigap Plan F for years. Plan F has saved me a bundle. Of course, I have a lot of health stuff that is chronic, so your mileage may differ.

invst65
Posts: 549
Joined: Thu Nov 27, 2014 11:04 am

Re: Need for Medicare supplemental plan?

Post by invst65 » Fri Mar 16, 2018 5:15 pm

racy wrote:
Fri Mar 16, 2018 11:27 am
I hate buying insurance (and never extended warranties), but we do buy Medicare Plan G since we do travel outside the US. So, I'm covered if the tour bus backs over me or if I if a fall down & get a concussion going down the ramp of a Viking river cruise boat.
First time I've ever heard of Plan "G". Does it only cover you when travelling for short periods or is it good if you live for an extended period outside the U.S. as we plan to do in the future when my wife joins me in retirement.

jebmke
Posts: 7631
Joined: Thu Apr 05, 2007 2:44 pm

Re: Need for Medicare supplemental plan?

Post by jebmke » Fri Mar 16, 2018 5:42 pm

invst65 wrote:
Fri Mar 16, 2018 5:15 pm
First time I've ever heard of Plan "G".
G is basically F with a $183 deductible. At some point, F plans will no longer be sold to new enrollees.
When you discover that you are riding a dead horse, the best strategy is to dismount.

User avatar
Artsdoctor
Posts: 3220
Joined: Thu Jun 28, 2012 3:09 pm
Location: Los Angeles, CA

Re: Need for Medicare supplemental plan?

Post by Artsdoctor » Fri Mar 16, 2018 6:34 pm

It is true that supplemental plans have high premiums.

I will leave it to the Bogleheads above to discuss the pros and cons of whether or not it's worth it or not.

One of the things you may not be aware of, however, is that your access to healthcare may be diminished if you don't have a supplement. Of course, you can be incredibly affluent and self-insure, but when you're calling for an appointment, you're going to most likely be asked what your insurance is; if you have Medicare, you're going to be asked about a supplement. Depending on the part of the country you're in, and depending on which way the Medicare winds are blowing at the time, you may have a much longer wait for that appointment if you don't have a supplement.

Medicare has become much more difficult to deal with, from a physician's perspective. The rates are certainly not keeping up with inflation and that 80% of negotiated rate isn't going to be all that helpful without the 20% payment that a supplement guarantees.

User avatar
FrugalInvestor
Posts: 4652
Joined: Fri Nov 07, 2008 12:20 am

Re: Need for Medicare supplemental plan?

Post by FrugalInvestor » Fri Mar 16, 2018 11:43 pm

jebmke wrote:
Fri Mar 16, 2018 5:42 pm
invst65 wrote:
Fri Mar 16, 2018 5:15 pm
First time I've ever heard of Plan "G".
G is basically F with a $183 deductible. At some point, F plans will no longer be sold to new enrollees.
As far as I know Plan G is exactly the same as Plan F except that F pays the part B deductible (currently $183) and G does not. A $183 per year in premiums difference between the two plans is the breakeven point. More than a $183 difference and G is the better deal. Less and F is the better deal. When I purchased the difference was somewhere around $260, so I chose G.

Plan F will no longer be sold to those becoming eligible for Medicare after December 31, 2019. This means that the insured pool for plan F with no new enrollees will begin to age relatively faster than the insured pool for plan G which is the closest substitute for F. This suggests to me that premiums for plan F are likely to increase at a faster rate than for plan G (assuming that rates are based on claims experience which are highly dependent upon age).
IGNORE the noise! | Our life is frittered away by detail... simplify, simplify. - Henry David Thoreau

User avatar
BolderBoy
Posts: 3863
Joined: Wed Apr 07, 2010 12:16 pm
Location: Colorado

Re: Need for Medicare supplemental plan?

Post by BolderBoy » Sat Mar 17, 2018 9:48 am

barefootjan wrote:
Fri Mar 16, 2018 11:05 am
This definitely sounds like something a Boglehead would know!

https://www.huffingtonpost.com/david-be ... 01861.html
The author cherry-picked specific items to make his point. If I get to cherry-pick the ones I want, the 20% costs after Medicare pays their 80% would amount to $50k/yr. As a BH, cherry picking dates to show the returns I want is considered bad form. Likewise here.

Remember that as one ages, one's accumulated [maybe minor] healthcare problems begin to express themselves evermore & as a bonus, you get to pick up more health problems along the way. Also, from the providers' side with Medicare, the name of the game is to maximize billable amounts so the maximum amount of revenue can be harvested. All possible stones are turned over, especially if you are hospitalized.

Lastly would be the issue of passing pre-existing underwriting. If you opt to skip a supplement for a few years and self-insure, what happens when you develop some health issue that is very costly and want a supplement then? Can the supplement provider deny you coverage for the obvious reason?

Buy the supplement from the outset. The downside could wipe you out.
"Never underestimate one's capacity to overestimate one's abilities" - The Dunning-Kruger Effect

User avatar
dm200
Posts: 15718
Joined: Mon Feb 26, 2007 2:21 pm
Location: Washington DC area

Re: Need for Medicare supplemental plan?

Post by dm200 » Sat Mar 17, 2018 10:04 am

Artsdoctor wrote:
Fri Mar 16, 2018 6:34 pm
It is true that supplemental plans have high premiums.
I will leave it to the Bogleheads above to discuss the pros and cons of whether or not it's worth it or not.
One of the things you may not be aware of, however, is that your access to healthcare may be diminished if you don't have a supplement. Of course, you can be incredibly affluent and self-insure, but when you're calling for an appointment, you're going to most likely be asked what your insurance is; if you have Medicare, you're going to be asked about a supplement. Depending on the part of the country you're in, and depending on which way the Medicare winds are blowing at the time, you may have a much longer wait for that appointment if you don't have a supplement.
Medicare has become much more difficult to deal with, from a physician's perspective. The rates are certainly not keeping up with inflation and that 80% of negotiated rate isn't going to be all that helpful without the 20% payment that a supplement guarantees.
Wow .. Good to know ... I wonder how common this is?

In this area, according to what many friends/acquaintences tell me (as well as a sign at our previous Primary Care Physician) - a great many Primary care Physicians will not accept new medicare patients - although they will continue to see existing patients who go on medicare.

My wife and I went on the Kaiser Medicare plan - so that is/was not an issue. Medicare Advantage (and the similar Medicare Cost) plans are heaily advertised and promoted in this area. With either MA or MC plans, you have the benefit of the availability (in different ways on different plans) of many physicians (including primary care and specialists).

jebmke
Posts: 7631
Joined: Thu Apr 05, 2007 2:44 pm

Re: Need for Medicare supplemental plan?

Post by jebmke » Sat Mar 17, 2018 10:12 am

dm200 wrote:
Sat Mar 17, 2018 10:04 am
n this area, according to what many friends/acquaintences tell me (as well as a sign at our previous Primary Care Physician) - a great many Primary care Physicians will not accept new medicare patients - although they will continue to see existing patients who go on medicare.
Not just primary care.

I think a prudent planner in some geographies would build in an assumption that some percentage of the health care expense will come outside the sphere of Medicare -- ie. there will be out of pocket expense for using providers who do not accept Medicare. It is a wild guess as to what that percentage might be. It might be that when one does a retirement budget that there is a general contingency of unknown expenses that will absorb things like this.
When you discover that you are riding a dead horse, the best strategy is to dismount.

User avatar
dm200
Posts: 15718
Joined: Mon Feb 26, 2007 2:21 pm
Location: Washington DC area

Re: Need for Medicare supplemental plan?

Post by dm200 » Sat Mar 17, 2018 10:56 am

jebmke wrote:
Sat Mar 17, 2018 10:12 am
dm200 wrote:
Sat Mar 17, 2018 10:04 am
n this area, according to what many friends/acquaintences tell me (as well as a sign at our previous Primary Care Physician) - a great many Primary care Physicians will not accept new medicare patients - although they will continue to see existing patients who go on medicare.
Not just primary care.
I think a prudent planner in some geographies would build in an assumption that some percentage of the health care expense will come outside the sphere of Medicare -- ie. there will be out of pocket expense for using providers who do not accept Medicare. It is a wild guess as to what that percentage might be. It might be that when one does a retirement budget that there is a general contingency of unknown expenses that will absorb things like this.
We (DW and I) do not have the problem (on Kaiser) - but some others on "Original Medicare" tell me that this problem (accepting medicare) is not as much of a problem with specialists.

michaeljc70
Posts: 2627
Joined: Thu Oct 15, 2015 3:53 pm

Re: Need for Medicare supplemental plan?

Post by michaeljc70 » Sat Mar 17, 2018 10:59 am

My 90 year old Grandma complains all the time. The conversation goes something like this:

Grandma: They keep raising this supplement. It is crazy expensive and it doesn't cover barely anything
Me: Then cancel it
Grandma: I have to have it

In her case, she doesn't really have the resources to cover a big bill from a major hospital stay or surgery. But she can barely afford the supplement.....


Of course, overall the insurance companies have to make a profit. But all insurance is like that and it mitigates risk.

User avatar
dm200
Posts: 15718
Joined: Mon Feb 26, 2007 2:21 pm
Location: Washington DC area

Re: Need for Medicare supplemental plan?

Post by dm200 » Sat Mar 17, 2018 11:11 am

It appears that Medicare Advantage (MA) and the similar Medicare Cost (MC) plans do continue to grow as the preference for those on Medicare. My guess is that the availability of Physicians that take Medicare as well as the increasing costs of the Supplements may also play a role.

A few years ago, on this forum, there were a lot of "gloom and doom" predictions about MA plans.

The other, possible, factor might be that MA plans could be in the forefront of promoting "lifestyle" changes to reduce health problems that do not exist with Original medicare and supplements

User avatar
daytona084
Posts: 803
Joined: Mon Feb 01, 2010 10:47 pm

Re: Need for Medicare supplemental plan?

Post by daytona084 » Sat Mar 17, 2018 11:14 am

As others have commented, the logic in the original article is severely flawed. This is insurance, not a "health plan" we are talking about. One does not buy a medicare supplement policy, or any other insurance policy, hoping it turns out to be a "good deal". (For example, I don't think I have ever had a year in which my homeowners or auto policy has paid out more than the premiums. Does that mean it was a bad decision?)

All insurance is supposed to be to guard against a catastrophic loss. How many times have you seen articles mentioning the possibility of HUGE medical bills for a major illness, surgery, hospital stay, etc. Medicare pays 80%. Guess what, 20% of a HUGE number is still a HUGE number.

Same thinking applies to Part D prescription coverage. Some drugs have unbelievably large costs, especially the new ones. Without part D coverage, you pay 100%.

User avatar
FrugalInvestor
Posts: 4652
Joined: Fri Nov 07, 2008 12:20 am

Re: Need for Medicare supplemental plan?

Post by FrugalInvestor » Sat Mar 17, 2018 11:21 am

jebmke wrote:
Sat Mar 17, 2018 10:12 am
dm200 wrote:
Sat Mar 17, 2018 10:04 am
n this area, according to what many friends/acquaintences tell me (as well as a sign at our previous Primary Care Physician) - a great many Primary care Physicians will not accept new medicare patients - although they will continue to see existing patients who go on medicare.
Not just primary care.

I think a prudent planner in some geographies would build in an assumption that some percentage of the health care expense will come outside the sphere of Medicare -- ie. there will be out of pocket expense for using providers who do not accept Medicare. It is a wild guess as to what that percentage might be. It might be that when one does a retirement budget that there is a general contingency of unknown expenses that will absorb things like this.
Another nuance is the distinction between providers that accept Medicare assignment and those that don't. Accepting Medicare assignment means the provider accepts the Medicare approved amount for the service and is reimbursed directly from Medicare. A provider that does not accept assignment may still accept Medicare but can charge an additional amount (excess charges) over and above the Medicare approved amount (this can be complicated - see here https://www.medicare.gov/your-medicare- ... nment.html). Only plans F & G cover excess charges (but a few states do not allow them). What this all means is that having plan F or G in a state allowing excess charges (most states) may open up more options for treatment that will be paid by your Medicare + supplement.

I have plan G and recently went through some extensive treatment at a nationally recognized medical center that does not accept assignment and that bills excess charges on some services. I was very pleased going in to know that these charges would be covered especially not knowing in advance what they might be. The billings and payment from both Medicare and my supplement plan have been very smooth sailing.

One additional convolution has been the Medicare 2% sequestration amount that comes into play for providers not accepting Medicare assignment (Google 'Medicare sequestration' for confusing explanations). The end result for me has been that my Medicare + G supplement has paid all of Part A and B charges with the exception of a portion of the part B charges for which I've owed the 2% to the provider and the $183 annual part B deductible. This has so far amounted to a few hundred dollars on the many thousands billed.

FYI....if I had a Medicare Advantage Plan rather than traditional Medicare + supplement I would not have been accepted to this particular medical center for treatment.
Last edited by FrugalInvestor on Sat Mar 17, 2018 11:44 am, edited 3 times in total.
IGNORE the noise! | Our life is frittered away by detail... simplify, simplify. - Henry David Thoreau

User avatar
dm200
Posts: 15718
Joined: Mon Feb 26, 2007 2:21 pm
Location: Washington DC area

Re: Need for Medicare supplemental plan?

Post by dm200 » Sat Mar 17, 2018 11:23 am

daytona084 wrote:
Sat Mar 17, 2018 11:14 am
As others have commented, the logic in the original article is severely flawed. This is insurance, not a "health plan" we are talking about. One does not buy a medicare supplement policy, or any other insurance policy, hoping it turns out to be a "good deal". (For example, I don't think I have ever had a year in which my homeowners or auto policy has paid out more than the premiums. Does that mean it was a bad decision?)
All insurance is supposed to be to guard against a catastrophic loss. How many times have you seen articles mentioning the possibility of HUGE medical bills for a major illness, surgery, hospital stay, etc. Medicare pays 80%. Guess what, 20% of a HUGE number is still a HUGE number.
Same thinking applies to Part D prescription coverage. Some drugs have unbelievably large costs, especially the new ones. Without part D coverage, you pay 100%.
Yes - I agree that such insurance should primarily guard against a catastrophic loss.

However, from another post here, it seems that having such a policy might enhance the ability to be seen by certain providers. I wonder, also, but do not know if such policies can help verify the validity/accuracy of the charges from providers?

User avatar
dm200
Posts: 15718
Joined: Mon Feb 26, 2007 2:21 pm
Location: Washington DC area

Re: Need for Medicare supplemental plan?

Post by dm200 » Sat Mar 17, 2018 11:27 am

FYI....if I had a Medicare Advantage Plan rather than traditional Medicare + supplement I would not have been accepted to this particular medical center for treatment.
Yes - very true. Some plans (such as Kaiser) require to be seen/treated at their centers by their physicians. In this area, Kaiser does not have its own hospitals, but has arrangements with some and not with others.

Other type MA plans, such as Humana in this area, have a network of Physicians (in their own offices/facilities) as well as arrangements with facilities (not sure of details).

S&L1940
Posts: 1552
Joined: Fri Nov 02, 2007 11:19 pm
Location: South Florida

Re: Need for Medicare supplemental plan?

Post by S&L1940 » Sat Mar 17, 2018 11:38 am

Good Listener wrote:
Fri Mar 16, 2018 4:02 pm
I have Plan F which covers everything Medicare doesn't pay, including the deductible. It's not worth the difference over G dollarwise but I enjoy not having any bills. I think it would be a horrible mistake to not have a supplement plan that covers the 20% Medicare doesn't pay. A very horrible mistake. Because if you get cancer or a stroke or heart attack, bills can be hundreds of thousands of dollars.
Plan F here wife and I
There is nothing like leaving a hospital or a doc' office with everything (or nearly everything) covered
And both of us have sadly had that experience more than once

The nearly everything bit is when hospitals try to hit you for charges "not covered by Medicare"; the latest routine when they are pumping for extra profit. We always contest the charges and have worked them down to zero or close to it

I am old enough to remember when my kids were born, they sent you down to the billing office before they let you have your baby.
Don't it always seem to go * That you don't know what you've got * Till it's gone

jebmke
Posts: 7631
Joined: Thu Apr 05, 2007 2:44 pm

Re: Need for Medicare supplemental plan?

Post by jebmke » Sat Mar 17, 2018 11:40 am

dm200 wrote:
Sat Mar 17, 2018 11:27 am
Yes - very true. Some plans (such as Kaiser) require to be seen/treated at their centers by their physicians. In this area, Kaiser does not have its own hospitals, but has arrangements with some and not with others.

Other type MA plans, such as Humana in this area, have a network of Physicians (in their own offices/facilities) as well as arrangements with facilities (not sure of details).
This is an important point. When approaching Medicare age, one needs to look carefully at various offerings and the market dynamics (health care providers) in the geography. MA works very well for many people in many areas. My sister has access to and uses a MA plan that has no restrictions. It works quite well for her and is cost effective. In my area, MA doesn't even exist.
When you discover that you are riding a dead horse, the best strategy is to dismount.

pshonore
Posts: 6237
Joined: Sun Jun 28, 2009 2:21 pm

Re: Need for Medicare supplemental plan?

Post by pshonore » Sat Mar 17, 2018 12:06 pm

dm200 wrote:
Sat Mar 17, 2018 10:04 am
Artsdoctor wrote:
Fri Mar 16, 2018 6:34 pm
It is true that supplemental plans have high premiums.
I will leave it to the Bogleheads above to discuss the pros and cons of whether or not it's worth it or not.
One of the things you may not be aware of, however, is that your access to healthcare may be diminished if you don't have a supplement. Of course, you can be incredibly affluent and self-insure, but when you're calling for an appointment, you're going to most likely be asked what your insurance is; if you have Medicare, you're going to be asked about a supplement. Depending on the part of the country you're in, and depending on which way the Medicare winds are blowing at the time, you may have a much longer wait for that appointment if you don't have a supplement.
Medicare has become much more difficult to deal with, from a physician's perspective. The rates are certainly not keeping up with inflation and that 80% of negotiated rate isn't going to be all that helpful without the 20% payment that a supplement guarantees.
Wow .. Good to know ... I wonder how common this is?

In this area, according to what many friends/acquaintences tell me (as well as a sign at our previous Primary Care Physician) - a great many Primary care Physicians will not accept new medicare patients - although they will continue to see existing patients who go on medicare.

My wife and I went on the Kaiser Medicare plan - so that is/was not an issue. Medicare Advantage (and the similar Medicare Cost) plans are heaily advertised and promoted in this area. With either MA or MC plans, you have the benefit of the availability (in different ways on different plans) of many physicians (including primary care and specialists)
Gotta say I've never been asked if I have a supplement, although a knowledgeable individual could probably tell from looking at my insurance cards. However I doubt most can tell if I have a hi-deductible F plan, a G plan or whatever. And if I have an Advantage plan, I don't think the co-pays and deductibles are obvious as well. Asking the average Senior what Letter plan they have would get a blank stare most of the time (although obviously not so on this forum

User avatar
dm200
Posts: 15718
Joined: Mon Feb 26, 2007 2:21 pm
Location: Washington DC area

Re: Need for Medicare supplemental plan?

Post by dm200 » Sat Mar 17, 2018 12:13 pm

jebmke wrote:
Sat Mar 17, 2018 11:40 am
dm200 wrote:
Sat Mar 17, 2018 11:27 am
Yes - very true. Some plans (such as Kaiser) require to be seen/treated at their centers by their physicians. In this area, Kaiser does not have its own hospitals, but has arrangements with some and not with others.
Other type MA plans, such as Humana in this area, have a network of Physicians (in their own offices/facilities) as well as arrangements with facilities (not sure of details).
This is an important point. When approaching Medicare age, one needs to look carefully at various offerings and the market dynamics (health care providers) in the geography. MA works very well for many people in many areas. My sister has access to and uses a MA plan that has no restrictions. It works quite well for her and is cost effective. In my area, MA doesn't even exist.
Huge differences in MA (or MC) by locality and area. Even the same providers (such as Humana and Kaiser) may have big differences from one area to another (even in the same state)

User avatar
HueyLD
Posts: 5646
Joined: Mon Jan 14, 2008 10:30 am

Re: Need for Medicare supplemental plan?

Post by HueyLD » Sat Mar 17, 2018 12:14 pm

Not eligible for Medicare, but I have heard many stories on the disadvantages of Medicare Advantage plans from Tax-Aide clients.

In my area, insurance companies seem to get in and out of the area more often than desired. And the MA customers usually have to change their doctors and hospitals with each switch to another MA plan and that appears to be a real pain for a lot of older people.

Fortunately, they are allowed to go back to the traditional Medicare + Medigap without medical underwriting when their MA insurance provider moves out of the area.

I don’t think I want to be forced to deal with too many changes in choices of healthcare providers when I am old and confused. So, it will be traditional + supplement for me when the time comes.

User avatar
dodecahedron
Posts: 3527
Joined: Tue Nov 12, 2013 12:28 pm

Re: Need for Medicare supplemental plan?

Post by dodecahedron » Sat Mar 17, 2018 12:26 pm

pshonore wrote:
Sat Mar 17, 2018 12:06 pm
Gotta say I've never been asked if I have a supplement, although a knowledgeable individual could probably tell from looking at my insurance cards. However I doubt most can tell if I have a hi-deductible F plan, a G plan or whatever. And if I have an Advantage plan, I don't think the co-pays and deductibles are obvious as well. Asking the average Senior what Letter plan they have would get a blank stare most of the time (although obviously not so on this forum
Good point. The big HMOs in this area offer both Advantage Plans and Supplemental Medigap plans. At least one of the Advantage plans from an HMO (which I am considering) is a PPO/POS that says they will cover services from any provider who accepts Medicare, not just physicians in their network.

It is a high deductible plan which deposits a certain amount into a Medical Savings Account (MSA) for me each year.

My state (NY) will allow me to switch to a Medigap (without underwriting) later in life, which I may eventually do, just to simplify my financial life. (Distributions from an MSA must be reported and reconciled against qualifying medical expenses on my 1040 each year, just as HSA distributions are also reported.)

The MSA high deductible plan seems to make sense for my current situation and one of my friends has had it for several years and is happy with it--says she has never been turned down by any provider and she has had a variety of medical adventures while on it. It does not require gatekeepers or referrals the way most Advantage plans do.

It is unclear how much longer the MSA plan will be available since it doesn't seem to be very popular and I have to wonder if the provider will keep offering it indefinitely, but any leftover funds in the MSA will be available to me even after the underlying insurance plan is no longer offered.
Last edited by dodecahedron on Sat Mar 17, 2018 12:29 pm, edited 1 time in total.

User avatar
dm200
Posts: 15718
Joined: Mon Feb 26, 2007 2:21 pm
Location: Washington DC area

Re: Need for Medicare supplemental plan?

Post by dm200 » Sat Mar 17, 2018 12:27 pm

HueyLD wrote:
Sat Mar 17, 2018 12:14 pm
Not eligible for Medicare, but I have heard many stories on the disadvantages of Medicare Advantage plans from Tax-Aide clients.
In my area, insurance companies seem to get in and out of the area more often than desired. And the MA customers usually have to change their doctors and hospitals with each switch to another MA plan and that appears to be a real pain for a lot of older people.
Fortunately, they are allowed to go back to the traditional Medicare + Medigap without medical underwriting when their MA insurance provider moves out of the area.
I don’t think I want to be forced to deal with too many changes in choices of healthcare providers when I am old and confused. So, it will be traditional + supplement for me when the time comes.
The issue you cite may be quite locality driven. In this area both Kaiser and Humana are big players and have stability. Of course, with plans like Humana, you never know for certain whether a particular Physician will or will not remail in the network. A different sort of thing with Kaiser - a particular Physician there might choose to leave. I know many Kaiser Physicians who stay with Kaiser their whole medical career - or nearly so. With both providers, in this area, though, there are never problems that there are no physicians (primary or specialty) available as needed/required.

Especially with Kaiser (my experience) - I see a potential benefit if/when I am "old and/or confused" because Kaiser will have or find the folks I need.

While I like all of my (and my wife's) Physicians - keeping any of them is not a big deal to me (or my wife), since there are a lot of equally good ones there. In that "system" it is not as big a deal to 'adjust" to someone else because they all operate in the same "system".

vested1
Posts: 1378
Joined: Wed Jan 04, 2012 4:20 pm

Re: Need for Medicare supplemental plan?

Post by vested1 » Sat Mar 17, 2018 12:34 pm

It's extremely important to call your current or previous employer's insurance provider to ask how they handle transition to Medicare. In most cases that insurance becomes secondary, or is cancelled/exhorbitant when Medicare age is reached. In some cases the employer provided insurance is better than Medicare supplemental plans and also covers prescriptions. The employer won't necessarily volunteer this information because doing so results in additional insurance cost to them.

Such was the case with my wife's insurance, which transitions to secondary at age 65. My retiree insurance was very expensive through my previous employer, even more so when I added my wife. By simply calling her insurance company and asking, I found that her insurance was superior to authorized Medicare supplemental plans, covered all prescriptions, and covered us both beyond age 65 indefinitely. This information was not in the brochures we were sent when it came time to renew the insurance when I transitioned to Medicare. Using her insurance for prescriptions eliminates the Part D penalty of not signing up soon after Medicare begins. If her insurance ever gets too expensive we can transition to Part D with no penalty.

Her premiums go up slightly every year, but this year we only pay $191 a month to her insurance to cover us both. Last year it was $177 a month. I cancelled the insurance from my previous employer. Now we only have Medicare parts A and B, as well as my wife's insurance, which covers everything it used to before Medicare except vision and dental, which we will self insure. She takes a very expensive medication, which from my recent research would have a yearly co-pay using the best plan I could find for Medicare part D of around $4,500, not including the cost of the insurance.

In fact, she is on a program with the drug manufacturer which makes that medication cost only $10 every 3 months. The manufacturer for that drug told us she would no longer able to participate in that program after she started Medicare. I made further calls and it was determined that they were wrong, and that she can remain on the program due to her insurance. Not so if she was on Part D.

A few short calls may save you a ton of $$$.

User avatar
HueyLD
Posts: 5646
Joined: Mon Jan 14, 2008 10:30 am

Re: Need for Medicare supplemental plan?

Post by HueyLD » Sat Mar 17, 2018 12:39 pm

Yes, the healthcare system is VERY LOCATION SPECIFIC and that’s why I posted my comments above.

Simply because one person has a very good experience with Kaiser in his location doesn’t mean much to another person in a different location. In my area, Kaiser doesn’t exist!

I think it is best to ask others in the same area of insurance related questions.

User avatar
dm200
Posts: 15718
Joined: Mon Feb 26, 2007 2:21 pm
Location: Washington DC area

Re: Need for Medicare supplemental plan?

Post by dm200 » Sat Mar 17, 2018 12:56 pm

Another spin on Medicare plans (County and school retirees in this area) that I recently learned of is that some employers that do continue health insurance benefits for retirees - make arrangements to "force" (or, perhaps "encourage") all retirees into a high benefit (and moderate monthly cost) Medicare Advantage plan. I believe such employers (county and school system) negotiate with insurance companies to get economies of scale by selecting one plan. Such plans (from the one I became aware of from an acquaintance) seem to be of the most "net" benefit to those with large medical costs - since they seem to cover almost everything with little or no copays, deductibles annually, etc. Those who are very healthy and have few expenses are, to a degree, paying a bit more than if not so covered.

User avatar
dual
Posts: 481
Joined: Mon Feb 26, 2007 7:02 pm

Re: Need for Medicare supplemental plan?

Post by dual » Sat Mar 17, 2018 12:59 pm

My approach is to insure for events that may make a financial difference so I carry Plan F high deductible. I have had it for about 5 years now without making a claim. In that time, the savings in premiums over say the regular Plan F will pay for the deductible for two years and then some. I can fund the deductible from my savings indefinitely.

22twain
Posts: 1297
Joined: Thu May 10, 2012 5:42 pm

Re: Need for Medicare supplemental plan?

Post by 22twain » Sat Mar 17, 2018 1:00 pm

FrugalInvestor wrote:
Fri Mar 16, 2018 11:43 pm
Plan F will no longer be sold to those becoming eligible for Medicare after December 31, 2019. This means that the insured pool for plan F with no new enrollees will begin to age relatively faster than the insured pool for plan G which is the closest substitute for F. This suggests to me that premiums for plan F are likely to increase at a faster rate than for plan G (assuming that rates are based on claims experience which are highly dependent upon age).
I need to sign up for Medicare by the end of this year, and I'm leaning towards plan G for exactly this reason. My wife is on plan F, but she signed up before the plan F "sunset" was enacted, so there was no way it could have been a factor in her decision.

User avatar
dm200
Posts: 15718
Joined: Mon Feb 26, 2007 2:21 pm
Location: Washington DC area

Re: Need for Medicare supplemental plan?

Post by dm200 » Sat Mar 17, 2018 1:44 pm

HueyLD wrote:
Sat Mar 17, 2018 12:39 pm
Yes, the healthcare system is VERY LOCATION SPECIFIC and that’s why I posted my comments above.
Simply because one person has a very good experience with Kaiser in his location doesn’t mean much to another person in a different location. In my area, Kaiser doesn’t exist!
I think it is best to ask others in the same area of insurance related questions.
I don't know about other areas of the country - but in this area (Washington DC) there used to be several other HMOs much like Kaiser. For reasons I don't understand, Kaiser in this area has thrived - while the other, similar, HMOs have gone away.

Spirit Rider
Posts: 7604
Joined: Fri Mar 02, 2007 2:39 pm

Re: Need for Medicare supplemental plan?

Post by Spirit Rider » Sat Mar 17, 2018 1:53 pm

Plans C, F and F high deductible will be grandfathered to existing policy holders on 12/31/2019. No new such plans can be sold effective 1/1/2020.

Plan G high deductible will be available 1/1/2020, but it is not known if it will be available earlier. Also, it is not known if current Plan G or Plan F high deductible policy holders will be able to change to Plan G high deductible policies without medical underwriting.

User avatar
munemaker
Posts: 2752
Joined: Sat Jan 18, 2014 6:14 pm

Re: Need for Medicare supplemental plan?

Post by munemaker » Sat Mar 17, 2018 1:53 pm

barefootjan wrote:
Fri Mar 16, 2018 11:05 am
...if you have Medicare and buy a supplemental policy with your own money, you are effectively giving an insurance company your money so that they can keep it.
Well, kind of. They keep your money, pool it with others, use it to pay your claims and hope to have some left over to make a profit.

User avatar
dm200
Posts: 15718
Joined: Mon Feb 26, 2007 2:21 pm
Location: Washington DC area

Re: Need for Medicare supplemental plan?

Post by dm200 » Sat Mar 17, 2018 1:55 pm

munemaker wrote:
Sat Mar 17, 2018 1:53 pm
barefootjan wrote:
Fri Mar 16, 2018 11:05 am
...if you have Medicare and buy a supplemental policy with your own money, you are effectively giving an insurance company your money so that they can keep it.
Well, kind of. They keep your money, pool it with others, use it to pay your claims and hope to have some left over to make a profit.
No - the insurance company pays out most of its premiums received for benefits

User avatar
munemaker
Posts: 2752
Joined: Sat Jan 18, 2014 6:14 pm

Re: Need for Medicare supplemental plan?

Post by munemaker » Sat Mar 17, 2018 2:09 pm

Curious why most on this thread prefer a supplemental plan to an advantage plan?

User avatar
munemaker
Posts: 2752
Joined: Sat Jan 18, 2014 6:14 pm

Re: Need for Medicare supplemental plan?

Post by munemaker » Sat Mar 17, 2018 2:19 pm

dm200 wrote:
Sat Mar 17, 2018 1:55 pm
munemaker wrote:
Sat Mar 17, 2018 1:53 pm
barefootjan wrote:
Fri Mar 16, 2018 11:05 am
...if you have Medicare and buy a supplemental policy with your own money, you are effectively giving an insurance company your money so that they can keep it.
Well, kind of. They keep your money, pool it with others, use it to pay your claims and hope to have some left over to make a profit.
No - the insurance company pays out most of its premiums received for benefits
Isn't that what I said (claims = benefits)?

Post Reply