Editor’s note: This article was solicited by the Editorial staff from independent broker Paul Davis because of his expertise on Medicare supplemental insurance coverage.
Come on, I published an article like this a year ago. You still haven’t gotten around to checking rates on your Medicare supplement plans? What have you been doing with your spare time during the pandemic? (My tongue is planted firmly in cheek).
I know that shopping Medicare supplement plans is kind of like deciding which dental procedure to have done. The majority of people I talk to (who are not my clients) are paying at least $1,000 more annually than they should.
If you watch TV, it’s difficult to avoid commercials for Medicare Advantage HMO plans that have zero monthly premium.
Those plans have improved dramatically over the past decade and include many extra benefits like vision, hearing and dental. There are even some plans that offer to “give back” a portion of your Medicare Part B premium. Those plans are great for people who are comfortable with an HMO model and whose doctors are in the network.
Occasionally we get calls from people wanting to get off their Medicare Advantage HMO plans. Most of them are shocked and upset when we tell them that they can’t readily change from a Medicare Advantage HMO to a Medicare supplement plan. Generally, they must wait until an open enrollment period (Oct. 15 to Dec. 7), and they will have to answer health history questions to make that change.
So, we encourage people to choose wisely, and think long term when selecting a plan to augment Medicare.
But this article is mostly for those people who want to have freedom of choice and do not mind paying a monthly premium for a Medicare Supplement (also known as a Medigap) plan. The federal government has standardized these plans since the early 1990s.
Plan J or Plan G?
If you’re on Plan J, which has not been sold since 2010, you are on the richest standardized Medicare supplement plan that ever existed. Plan J has an at-home recovery benefit that does not exist on current plans. But how much extra are you paying for that benefit, and is it worth it?
We left a number of clients on this plan for years because the pricing had stayed competitive. But this year, for almost everyone we’ve shopped, we’ve seen a convincing reason to change.
Plan J has two distinctive attributes. Plan J has an at-home recovery benefit of $40 per day for up to 40 days a year, after discharge from a hospital and for every day you receive home healthcare. While that may sound good, I have never had a client make use of that benefit. Plan J has no deductibles.
The new recommended Plan G has a $203 deductible for Medicare Part B (which covers services from doctors and other healthcare providers) and no at-home recovery benefits.
After reviewing these plan and premium differences, 90 percent of our clients are opting to make the change.
‘Birthday rule,’ consider strategies when moving
In California, we have a “birthday rule” which guarantees the right of existing Medicare supplement plan subscribers to change to any carrier’s similar or lesser Medicare supplement plan within 60 days of their birthday — with no health questions.
Several other states have similar guarantees. But most states will not let you change plans unless you can prove you are still in good health.
When clients tell me they are moving out of California, we will strategically put them on plans that will be better for them in the long run in the new state they are moving to. Due to this migration, we are now licensed in 18 states.
‘Richest’ plans available, shopping Part D
Plan F has been the richest plan since 2010. Plan F is still available to those who became eligible for Medicare before Jan. 1, 2020. But, if your 65th birthday is after that date, the richest plan you can enroll in is Plan G.
The only difference between Plans F and G is that with G you are responsible for the Part B deductible. That deductible is $203 this year and will index up yearly.
Over the past few years, we have seen more companies emerge with Plan G offerings and have also seen companies lower their rates on Plan G.
Plan G is the competitive battleground for carriers wanting to capture baby boomers. We are moving hundreds of clients each year for meaningful savings. We suggest to everyone that this is something they should be looking into. Go to pdinsure.com/Medicare-supplement-price for a reality check on Los Angeles County prices.
My office has a mechanism in place where we offer to re-shop all of our clients’ Part D prescription drug plans during the Annual Election Period (Oct. 15 to Dec. 7). We also re-shop all of our California clients’ Medicare supplement plans around their birthday every year. I know of no other agent or agency doing that proactively.
We are paid a commission when we place a client with a particular company. But we have no loyalties to any carrier. We regularly change clients to plans that pay us less in compensation (sometimes no compensation) because it is in their best interest.
Paul Davis of Paul Davis Insurance Services is an independent insurance agent licensed for more than 37 years, with an exclusive focus on Medicare plans for more than 10 years. CA license 0669770, 0M47932. More information at pdinsure.com or contact Davis at 818-888-0880 or via email paul@pdinsure.com.
