Medicare Advantage Reigns. So Who Still Buys Medigap? (from Center for Retirement Research, Boston College)

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dodecahedron
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Re: Medicare Advantage Reigns. So Who Still Buys Medigap? (from Center for Retirement Research, Boston College)

Post by dodecahedron »

Big Dog wrote: Tue Jul 09, 2024 9:37 pm
dodecahedron wrote: Tue Jul 09, 2024 2:24 pm
ehh wrote: Tue Jul 09, 2024 12:17 pm
dodecahedron wrote: Tue Jul 09, 2024 10:44 am Interestingly, in NY, minimal or no premium difference between F-HD vs G-HD at this time.
The Part B deductible counts toward both F-HD maximum annual out-of-pocket and toward G-HD maximum annual out-of-pocket. Hence, the coverage under G-HD is identical to the coverage under F-HD.
Indeed, essentially identical, though one could possibly construct a hypothetical if unlikely scenario where large Part A bills arrive in the first part of the year (for hospitalization followed by a few months in SNF/rehab) but delays in billing from Part B providers result in Part B bills that arrive after previously billed Part A expenses exceeded the HD.)

Although this is unlikely, it seems some care providers may strategically delay billing patients on high deductible plans in hopes the patients will have satisfied the deductible from other bills before theirs arrives.

I have been quite shocked at delays in billing in the past, including one bill from an assistant anesthesiologist that arrived over a year after the procedure. (This was back when I had a very high deductible ACA Bronze policy.)
Not sure I understand your scenario, as the Date of Service controls. Even if a doc doesn't bill you for a year, that bill goes back to the prior year deductible.
No cross-calendar year deductible issues required to make my hypothetical scenario work.

Here is my hypothetical scenario: hospital and SNF both bill promptly for a hospitalization in early 2024 followed by rehab in inpatient SNF. Medicare Part A promptly pays their contractual share and issues an EOB showing patient has incurred $2800 in out of pocket deductible plus Part A coinsurance on the SNF. Medigap HD policy then covers the rest of these bills and this will be true whether it's F-HD or G-HD.

In July 2024, the docs involved in this hospitalization episode finally issue their bills for services during that same period. Medicare Part B covers all but the $240 deductible plus 20% coinsurance of the remainder of these provider bills. Plan F-HD will cover both the $240 deductible and the 20% coinsurance, while Plan G-HD will only cover the 20% coinsurance, leaving the patient to pay the $240 Part B deductible, even though they have already met the overall $2800 Medigap threshhold.
Northern Flicker
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Re: Medicare Advantage Reigns. So Who Still Buys Medigap? (from Center for Retirement Research, Boston College)

Post by Northern Flicker »

Interestingly, Medicare Advantage has the highest gross margin for the insurers of all 4 major classes of health insurance.

https://www.kff.org/medicare/issue-brie ... rformance/

https://www.kff.org/medicare/press-rele ... r-markets/
smitcat
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Re: Medicare Advantage Reigns. So Who Still Buys Medigap? (from Center for Retirement Research, Boston College)

Post by smitcat »

michaeljc70 wrote: Tue Jul 09, 2024 2:16 pm
smitcat wrote: Tue Jul 09, 2024 11:54 am
michaeljc70 wrote: Tue Jul 09, 2024 7:40 am The article echoes what I've long heard. Turn the question on its head...why do so many people get MA? I believe it is the same reason why so many take SS early. Financial. MA offers a lot of perks and is generally cheaper.
Looking at only SS and the MA choice from a financial viewpoint .....
- I would expect mostly healthy folks to delay SS and elect MA
- I would expect less healthy folks to take early SS and elect Medigap
If you have no savings and you can't keep working you have to take SS. If you are in bad shape and cannot afford the Medigap premiums you take MA. Of course, I'm talking about tens of millions of people and probably almost no Bogleheads.

My father is mid 70s. When he started Medicare his Medigap was like $150 a month. Now is it like $600 per month. In my state you cannot change easily (underwriting). So, how many retirees can spend $7200 a year just on the supplement? Combine that with the $2100 part B and you are approaching $10k a year not counting any out of pocket! My grandma used to get that in SS for a year (3 years ago). Keep in mind the average SS is under $23k a year. Most people don't have a lot of savings.
I was just noting that from a strictly financial veiwpoint that would likely be the pattern.
Many folks do not go out and purchase anr medical insurance unless/until they are retired. For those that have been buying medical insurance for years the choices and prices are much less of a surprise.
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Svensk Anga
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Re: Medicare Advantage Reigns. So Who Still Buys Medigap? (from Center for Retirement Research, Boston College)

Post by Svensk Anga »

neilpilot wrote: Tue Jul 09, 2024 9:16 pm
tunafish wrote: Tue Jul 09, 2024 8:11 pm
I am 5-6 years older than your dad, and I pay ha;f as much as he does for Medigap Plan F. Why is that...
The rate increase for a Medigap policy depends on the policy’s rate structure. It will be one of these 3:

Community-rated: The insurer charges all people who have the same type of policy the same premium. ...
Issue-age-rated: The younger you are, the lower your premium is. ...
Attained-age-rated: With this structure, your premium may be relatively low at first, but increases every year.
Issue age rated prices the plan as of the age you start the policy and it goes up only with medical cost inflation. Premiums do not go up due to your advancing age. It may not look as attractive at 65 as an attained age policy, but it will be better at 85. If you elect issue age, you want to have a plan you can hold for life in order to minimize the risk of price escalation.

I find G-HD with issue age pricing from a stable insurer a decent deal if you subscribe to the theory that one should insure only risks that they cannot afford to pay for on their own.
InMyDreams
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Re: Medicare Advantage Reigns. So Who Still Buys Medigap? (from Center for Retirement Research, Boston College)

Post by InMyDreams »

UHC/AARP in my area offers a "issue age" premium with a "discount" on the price. As you age, the "discount" decreases by 3% until you're paying the full premium (happens at age 80, I think). I think a lot of people don't realize the nuance when they sign up for it.

I've looked at premiums in Washington state, and, if I understand correctly, everyone on an insurer's plan, regardless of age, pays the same premium. So if I paid a UHC Plan G premium right now in WA, I'd pay more than I do right now where I live, but when I'm 80, I'd pay significantly less. Can anyone confirm that?
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yankees60
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Re: Medicare Advantage Reigns. So Who Still Buys Medigap? (from Center for Retirement Research, Boston College)

Post by yankees60 »

Northern Flicker wrote: Tue Jul 09, 2024 10:02 pm
michaeljc70 wrote: Tue Jul 09, 2024 6:22 pm
Northern Flicker wrote: Tue Jul 09, 2024 5:40 pm
michaeljc70 wrote: Tue Jul 09, 2024 7:40 am The article echoes what I've long heard. Turn the question on its head...why do so many people get MA? I believe it is the same reason why so many take SS early. Financial. MA offers a lot of perks and is generally cheaper.
MA isn't necessarily cheaper. That depends on health outcomes. The financial comparison of G, G-HD, and MA is analogous to a comparison of gold, silver, and bronze plans on individual exchanges.

If we leave aside drug plans differences between Medigap and MA other than cost, G medigap is all fixed cost with no variable cost, MA (most plans) is all variable cost, and G-HD is a mix of fixed and variable cost.

My MIL pays a $30/mo. premium for her MA plan to add out-of-network coverage. Some MA plans have some premiums (fixed cost).
$30 sounds like a good deal.
She doesn't use the out-of-network care option, as they have a strong network. It is a little more expensive than $30/mo. because the (in-network) OOP Max is $200-300 higher as well. A significant benefit is limiting the liability if taken to an out-of-network ER, and a hospital stay becomes rated as an out-of-network, non-emergency hospitalization.

I don't know how much of a risk that is with many MA plans. The OOP Max for out-of-network and in-network care combined for my MIL's plan is around $10K, only slightly higher than the in-network OOP max for a bronze plan on the ACA exchange. (In-network OOP Max is under $5K, I forget the number). OON doctor visits have low copays also ($35-50), and specialty care does not require a referral from a PCP. This is another example of what I consider to be a very good MA plan.

For me, the major motivation specifically for Medigap would be not having to worry about hospital networks.
8 plus years on being on both Medicare and the same Medigap plan. Do not know what the out of pocket maximum is but during that time I have yet to pay Anything for anything. Also have yet to encounter anything that does not accept Medicare.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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cheese_breath
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Re: Medicare Advantage Reigns. So Who Still Buys Medigap? (from Center for Retirement Research, Boston College)

Post by cheese_breath »

Medigap subscriber here.

In the almost four years from DW's stroke until COVID took her she had been patient at five different hospitals and three nursing homes, and I never had to worry if they were 'in network'.
The surest way to know the future is when it becomes the past.
diy60
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Re: Medicare Advantage Reigns. So Who Still Buys Medigap? (from Center for Retirement Research, Boston College)

Post by diy60 »

Svensk Anga wrote: Wed Jul 10, 2024 7:34 am
neilpilot wrote: Tue Jul 09, 2024 9:16 pm
tunafish wrote: Tue Jul 09, 2024 8:11 pm
I am 5-6 years older than your dad, and I pay ha;f as much as he does for Medigap Plan F. Why is that...
The rate increase for a Medigap policy depends on the policy’s rate structure. It will be one of these 3:

Community-rated: The insurer charges all people who have the same type of policy the same premium. ...
Issue-age-rated: The younger you are, the lower your premium is. ...
Attained-age-rated: With this structure, your premium may be relatively low at first, but increases every year.
Issue age rated prices the plan as of the age you start the policy and it goes up only with medical cost inflation. Premiums do not go up due to your advancing age. It may not look as attractive at 65 as an attained age policy, but it will be better at 85. If you elect issue age, you want to have a plan you can hold for life in order to minimize the risk of price escalation.

I find G-HD with issue age pricing from a stable insurer a decent deal if you subscribe to the theory that one should insure only risks that they cannot afford to pay for on their own.
Keep in mind the availability of which type of pricing is available (community rated, issue-age, attained-age) is State specific. In my State of approximately 50 Medigap policies, there are no issue-age policies available and only 1 community-rated policy available.
diy60
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Re: Medicare Advantage Reigns. So Who Still Buys Medigap? (from Center for Retirement Research, Boston College)

Post by diy60 »

Northern Flicker wrote: Tue Jul 09, 2024 1:57 pmThat is not a reason to pick MA at 65. If you prefer Medigap, pick Medigap.
Maybe so for rich Boglehead-land, but in my circle of acquaintances most barely make ends meet and definitely cannot afford Medigap policies.
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Re: Medicare Advantage Reigns. So Who Still Buys Medigap? (from Center for Retirement Research, Boston College)

Post by Northern Flicker »

yankees60 wrote: Wed Jul 10, 2024 1:11 pm
Northern Flicker wrote: Tue Jul 09, 2024 10:02 pm
michaeljc70 wrote: Tue Jul 09, 2024 6:22 pm
Northern Flicker wrote: Tue Jul 09, 2024 5:40 pm
michaeljc70 wrote: Tue Jul 09, 2024 7:40 am The article echoes what I've long heard. Turn the question on its head...why do so many people get MA? I believe it is the same reason why so many take SS early. Financial. MA offers a lot of perks and is generally cheaper.
MA isn't necessarily cheaper. That depends on health outcomes. The financial comparison of G, G-HD, and MA is analogous to a comparison of gold, silver, and bronze plans on individual exchanges.

If we leave aside drug plans differences between Medigap and MA other than cost, G medigap is all fixed cost with no variable cost, MA (most plans) is all variable cost, and G-HD is a mix of fixed and variable cost.

My MIL pays a $30/mo. premium for her MA plan to add out-of-network coverage. Some MA plans have some premiums (fixed cost).
$30 sounds like a good deal.
She doesn't use the out-of-network care option, as they have a strong network. It is a little more expensive than $30/mo. because the (in-network) OOP Max is $200-300 higher as well. A significant benefit is limiting the liability if taken to an out-of-network ER, and a hospital stay becomes rated as an out-of-network, non-emergency hospitalization.

I don't know how much of a risk that is with many MA plans. The OOP Max for out-of-network and in-network care combined for my MIL's plan is around $10K, only slightly higher than the in-network OOP max for a bronze plan on the ACA exchange. (In-network OOP Max is under $5K, I forget the number). OON doctor visits have low copays also ($35-50), and specialty care does not require a referral from a PCP. This is another example of what I consider to be a very good MA plan.

For me, the major motivation specifically for Medigap would be not having to worry about hospital networks.
8 plus years on being on both Medicare and the same Medigap plan. Do not know what the out of pocket maximum is but during that time I have yet to pay Anything for anything. Also have yet to encounter anything that does not accept Medicare.
Presumably you have F medigap which is all fixed cost. Out of pocket minimum = out of pocket maximum = annual premium. It takes alot of care to hit the out of pocket max on MA. Hospital based care has copays, so it usually takes expensive outpatient care and procedures such chemo or several hospitalizations for MA to cost as much or more than a Medigap plan.
delamer
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Re: Medicare Advantage Reigns. So Who Still Buys Medigap? (from Center for Retirement Research, Boston College)

Post by delamer »

celia wrote: Sat Jul 06, 2024 4:11 pm From the article:
Medigap buyers on average use $12,200 in medical care annually – $2,300 more than everyone else on Medicare . . .

Since Medigap buyers spend more, a logical supposition is that they are less healthy. But the researchers found that they are actually healthier than other retirees. Their incidence of diabetes and of cardiovascular disease are lower. They even spend more on healthcare than comparable retirees with the same health profiles. . . .

So, the question remains: why do Medigap buyers spend $2,300 more on healthcare? The researchers argue that since the various characteristics of the retirees themselves cannot explain this additional spending, . . .
Don't forget that these groups are self-selecting in that each person gets to decide which group to join. And the lower income folks don't really have a choice if they can't afford the Medigap premiums.

The answer why Medigap participants tend to spend more likely has to do with having more wealth and education than the average American. Just as Bogleheads aren't representative of the entire country, the same is probably true for Medigap participants. Besides usually having more income, some geographic areas don't have both options, as someone mentioned above.
The researchers conclude that moral hazard “may lead these individuals to demand more [care] than those without Medigap.”
I wouldn't say they "demand" more care but probably "expect" more. And doctors themselves will likely choose Medigap for themselves, when they retire. (How about a study of what retired doctors choose?)
In other words, Medigap buyers are essentially getting more but paying less out-of-pocket for doctor’s appointments, medical care, and tests.
I didn't read the article but this sounds contradictory to the beginning of the first quote. But I also count premiums as part of our health care costs.
I read the article, but not the study. The use of “out-of-pocket” has aiways bothered in this context.

Simplistically, any dollar directly out of my bank account is a cost to me. Whether it goes to a co-pay, a deductible, or an insurance premium, it is still a health care cost.

To say Medigap buyers are paying less “out-of-pocket” and ignore the premium cost that they are incurring does not pass the snift test.

Presumably they choose more robust insurance because they want to use it?
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
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yankees60
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Re: Medicare Advantage Reigns. So Who Still Buys Medigap? (from Center for Retirement Research, Boston College)

Post by yankees60 »

delamer wrote: Wed Jul 10, 2024 3:49 pm
celia wrote: Sat Jul 06, 2024 4:11 pm From the article:
Medigap buyers on average use $12,200 in medical care annually – $2,300 more than everyone else on Medicare . . .

Since Medigap buyers spend more, a logical supposition is that they are less healthy. But the researchers found that they are actually healthier than other retirees. Their incidence of diabetes and of cardiovascular disease are lower. They even spend more on healthcare than comparable retirees with the same health profiles. . . .

So, the question remains: why do Medigap buyers spend $2,300 more on healthcare? The researchers argue that since the various characteristics of the retirees themselves cannot explain this additional spending, . . .
Don't forget that these groups are self-selecting in that each person gets to decide which group to join. And the lower income folks don't really have a choice if they can't afford the Medigap premiums.

The answer why Medigap participants tend to spend more likely has to do with having more wealth and education than the average American. Just as Bogleheads aren't representative of the entire country, the same is probably true for Medigap participants. Besides usually having more income, some geographic areas don't have both options, as someone mentioned above.
The researchers conclude that moral hazard “may lead these individuals to demand more [care] than those without Medigap.”
I wouldn't say they "demand" more care but probably "expect" more. And doctors themselves will likely choose Medigap for themselves, when they retire. (How about a study of what retired doctors choose?)
In other words, Medigap buyers are essentially getting more but paying less out-of-pocket for doctor’s appointments, medical care, and tests.
I didn't read the article but this sounds contradictory to the beginning of the first quote. But I also count premiums as part of our health care costs.
I read the article, but not the study. The use of “out-of-pocket” has aiways bothered in this context.

Simplistically, any dollar directly out of my bank account is a cost to me. Whether it goes to a co-pay, a deductible, or an insurance premium, it is still a health care cost.

To say Medigap buyers are paying less “out-of-pocket” and ignore the premium cost that they are incurring does not pass the snift test.

Presumably they choose more robust insurance because they want to use it?
I chose it not because I wanted to use it but to totally eliminate any financial aspects to any Potential Medical choices / decisions.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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cheese_breath
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Re: Medicare Advantage Reigns. So Who Still Buys Medigap? (from Center for Retirement Research, Boston College)

Post by cheese_breath »

delamer wrote: Wed Jul 10, 2024 3:49 pm ... Presumably they choose more robust insurance because they want to use it?
Not because they want to use it. But if they have to use it, they want the best.
The surest way to know the future is when it becomes the past.
delamer
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Re: Medicare Advantage Reigns. So Who Still Buys Medigap? (from Center for Retirement Research, Boston College)

Post by delamer »

cheese_breath wrote: Wed Jul 10, 2024 4:04 pm
delamer wrote: Wed Jul 10, 2024 3:49 pm ... Presumably they choose more robust insurance because they want to use it?
Not because they want to use it. But if they have to use it, they want the best.
Yes, your phrasing is better than mine.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
delamer
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Re: Medicare Advantage Reigns. So Who Still Buys Medigap? (from Center for Retirement Research, Boston College)

Post by delamer »

yankees60 wrote: Wed Jul 10, 2024 3:59 pm
delamer wrote: Wed Jul 10, 2024 3:49 pm
celia wrote: Sat Jul 06, 2024 4:11 pm From the article:
Medigap buyers on average use $12,200 in medical care annually – $2,300 more than everyone else on Medicare . . .

Since Medigap buyers spend more, a logical supposition is that they are less healthy. But the researchers found that they are actually healthier than other retirees. Their incidence of diabetes and of cardiovascular disease are lower. They even spend more on healthcare than comparable retirees with the same health profiles. . . .

So, the question remains: why do Medigap buyers spend $2,300 more on healthcare? The researchers argue that since the various characteristics of the retirees themselves cannot explain this additional spending, . . .
Don't forget that these groups are self-selecting in that each person gets to decide which group to join. And the lower income folks don't really have a choice if they can't afford the Medigap premiums.

The answer why Medigap participants tend to spend more likely has to do with having more wealth and education than the average American. Just as Bogleheads aren't representative of the entire country, the same is probably true for Medigap participants. Besides usually having more income, some geographic areas don't have both options, as someone mentioned above.
The researchers conclude that moral hazard “may lead these individuals to demand more [care] than those without Medigap.”
I wouldn't say they "demand" more care but probably "expect" more. And doctors themselves will likely choose Medigap for themselves, when they retire. (How about a study of what retired doctors choose?)
In other words, Medigap buyers are essentially getting more but paying less out-of-pocket for doctor’s appointments, medical care, and tests.
I didn't read the article but this sounds contradictory to the beginning of the first quote. But I also count premiums as part of our health care costs.
I read the article, but not the study. The use of “out-of-pocket” has aiways bothered in this context.

Simplistically, any dollar directly out of my bank account is a cost to me. Whether it goes to a co-pay, a deductible, or an insurance premium, it is still a health care cost.

To say Medigap buyers are paying less “out-of-pocket” and ignore the premium cost that they are incurring does not pass the snift test.

Presumably they choose more robust insurance because they want to use it?
I chose it not because I wanted to use it but to totally eliminate any financial aspects to any Potential Medical choices / decisions.
Also better phrasing than mine.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
Northern Flicker
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Re: Medicare Advantage Reigns. So Who Still Buys Medigap? (from Center for Retirement Research, Boston College)

Post by Northern Flicker »

diy60 wrote: Wed Jul 10, 2024 2:46 pm
Northern Flicker wrote: Tue Jul 09, 2024 1:57 pmThat is not a reason to pick MA at 65. If you prefer Medigap, pick Medigap.
Maybe so for rich Boglehead-land, but in my circle of acquaintances most barely make ends meet and definitely cannot afford Medigap policies.
My point was that if you want Medigap at age 65 at its cost at age 65, then the fact that it may cost much more at say age 75 is not a reason to pick MA at age 65.
diy60
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Re: Medicare Advantage Reigns. So Who Still Buys Medigap? (from Center for Retirement Research, Boston College)

Post by diy60 »

Northern Flicker wrote: Wed Jul 10, 2024 4:58 pm
diy60 wrote: Wed Jul 10, 2024 2:46 pm
Northern Flicker wrote: Tue Jul 09, 2024 1:57 pmThat is not a reason to pick MA at 65. If you prefer Medigap, pick Medigap.
Maybe so for rich Boglehead-land, but in my circle of acquaintances most barely make ends meet and definitely cannot afford Medigap policies.
My point was that if you want Medigap at age 65 at its cost at age 65, then the fact that it may cost much more at say age 75 is not a reason to pick MA at age 65.
Thanks for clarifying. I agree with your point.
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