Seniors and other Medicare beneficiaries could mistakenly find themselves paying more for their healthcare by comparing Advantage plan premiums with Medigap without looking at total costs.
2021 Medicare Advantage enrollments could be up by as much as 5.5 percent over 2020, the direct result of the increasing cost of Medigap insurance. But, if you are in the market for a Medicare plan, you might want to look at the rising out-of-pocket limits on Medicare Advantage plans before you make your final decision. The annual out-of-pocket cap on Medicare Advantage plans increased by $850 in 2021, which has the potential to put millions of seniors at risk of high medical bills they can't pay. A recent report by MedicareWire found that as many as half of all 2021 Medicare Advantage plan enrollees will be in a plan with an out-of-pocket maximum of $7,550.
More information can be found at https://medicarewire.com/medigap/are-medicare-supplement-plans-worth-it/
Rising Medicare Advantage enrollments has a lot to do with decreasing monthly premiums, making Medicare Advantage plans appear to cost less than Medicare supplements. Since 2017, the average premium on private health plans has dropped by more than 34 percent, and 2021 plans have the lowest premiums since 2007.
With Medicare supplement insurance rates climbing, many Original Medicare beneficiaries are comparing the monthly cost of coverage with HMO and PPO plans because the private health insurance option appears to cost less. Unfortunately, many seniors will get into financial trouble by switching to Medicare Advantage. What most people don't take into account is that many healthcare costs, especially hospitalization, can cost a lot more with Medicare Advantage.
To help Medicare beneficiaries understand their true costs in Medicare and the type of insurance that will work best for them, MedicareWire.com offers a free rate analysis and coverage service. The service helps seniors and people with disabilities find a plan and insurance carrier with the lowest-cost plan available in their area that will meet their needs.
Kaiser Family Foundation research also shows that Medicare Advantage plans can be quite costly for some people, particularly those with chronic health conditions. What Kaiser reported is that about 50 percent of beneficiaries enrolled in Medicare Advantage would have higher healthcare costs than those with Original Medicare for a 5-day hospital stay.
Medicare supplements, which pay some of the gaps in Original Medicare, including deductibles, copays, and coinsurance, are the premium option for seniors. Unlike HMO and PPO plans, there are few restrictions with Original Medicare and a supplement. But, the Centers for Medicare and Medicaid Services' official literature, the "Medicare & You" handbook, tends to favor Medicare Advantage plans by over-selling annual limits, appeal rights, and statements that downplay Medicare Advantage issues.
People frequently want to know if Medicare supplement plans are worth the cost. Unfortunately, you can't predict when you will get critically ill or have a serious accident. But you can predict your healthcare costs with Original Medicare and a Medigap policy. So, yes, they are worth it.
For healthy seniors, who rarely use healthcare services, Medicare Advantage offers excellent cost savings. But, when you come down with a chronic illness that requires regular care, including periods of hospitalization and skilled nursing for recovery, the bills stack up very fast. Many people simply are not prepared for the costs.
Many Medicare Advantage plans lure people in with extra benefits, like prescription drug coverage, dental, vision, and hearing, and they appear to lower to have costs. But, when you dig deeper you quickly discover that most plans with zero-dollar premiums have high out-of-pocket limits, high copays, and the additional benefits have strict limits. Most dental coverage, as an example, is limited to $500 per year and does not cover all services.
All Medicare Advantage plans are required to publish a "Summary of Benefits" document that explains in reasonable detail what a plan offers and the costs members pay for all services. Unfortunately, it's nearly impossible to find the plan benefit documents for many plans. MedicareWire has taken steps to make it easier to get this information with their own downloadable PDF files, that include plan cost details.
One of the reasons it is so difficult to compare the cost of Medicare Advantage plans with Original Medicare and supplemental insurance is that it is impossible to put Medicare Advantage coverage into a chart as you can with Medigap plans. A comparison program is needed to assist people in making the best choice based on their personal health and financial situation.
