Optimize your Medicare coverage

RB: Thanks for joining us, Ari. Enrolling in Medicare can be difficult to navigate and, as a result, not everyone chooses the coverage they need. The good news is that you wrote a book about enrolling in Medicare, It’s Not That Complicated, so let’s make it easier for people who want to make changes to their coverage. First, who should consider reviewing their coverage?

AP: You should review your coverage regardless of whether you think you need to. Prescription plans can change from year to year, so we recommend you review your Part D (prescription plan) coverage annually. Part D plans frequently change drug pricing and new drugs can receive coverage while certain prescriptions are dropped, so it’s worth comparison shopping your drug plan each year.

It’s as easy as the three P’s

RB: Let’s talk about clients who have opted for traditional Medicare and have Medigap coverage offered by private insurers to cover what Medicare does not. Do you have to review your Medigap? And what if you have Medicare Advantage (an alternative to traditional Medicare offered by private insurers)?

AP: First, consider the three P's when determining whether you have the coverage you need: providers (your doctors), prescriptions (which we just covered) and priorities, such as: Is the plan’s cost most important to you? Or do you need to have international coverage? Are you looking to increase coverage with certain health care needs?

Apply these three P's when you review your Medigap or your Advantage plan. Like Part D plans, Medicare Advantage plans can change their coverage and pricing annually, so review your Advantage plan annually, if you opted for one. You may get a better deal and/or you may need a different provider network.

RB: Do you need to review your Medigap coverage annually?

AP: No. I have a saying, “Marry your Medigap. Date your drug plan.” Consider reviewing your Medigap plan every three to four years to make sure that what you’re paying is in line with your budget, expectations and health care needs, based on the three P's – providers, prescriptions and priorities. Your Medigap coverage may be fine, in which case, it’s a relatively happy marriage.

However, if you have never reviewed your Medigap policy to make sure it’s optimized based on the three P's, then you should do so in October. Sometimes clients can save a lot over time by changing Medigap plans.

Switching plans and saving money

RB: Give me an example of how a client could save money by changing Medigap coverage without changing quality of coverage.

AP: Most people with Medigap coverage have one of three plan letter types – plans F, G or N – so those are the ones I will discuss. When switching Medigap plans, you typically don’t have to worry about the first P, providers, because with Medigap plans, any doctor that accepts Medicare is “in network.” (Advantage plans have their own provider networks, like HMOs.)

However, there are differences in cost. Plan F and Plan G offer among the most comprehensive Medicare coverage. But Plan F can be much more expensive than Plan G, even though the only difference is that Plan G does not cover the Part B annual deductible. There may be substantial savings in premiums over time if it makes sense for you to switch to Plan G.

When you’re in less-than-perfect health

RB: Why doesn’t everyone just switch to Plan G?

AP: There’s a catch. In 46 states, if you are switching Medigap plans, an insurer can reject you based on health conditions, such as chronic complications with diabetes. There are insurers that have more lenient underwriting standards, but they also may cost more. This means there is a wide range of costs even within the same plan letter types, and that leads to potential opportunity.

Any plan within the same letter type, such as G, will offer the exact same hospital and medical coverage, by law, regardless of price. So, if you’re already in Plan G, it’s worth reviewing it to see if you are getting the best priced plan.

RB: Could there be a scenario where Medicare does not cover your chronic condition?

AP: Medicare keeps a list of 21 chronic conditions, including some conditions you would expect, like Alzheimer’s, cancer and diabetes, as well as some that may be a surprise, including asthma, high cholesterol and high blood pressure.

If you have a chronic condition, it will not affect your original Medicare coverage – Medicare can cover 80% of your medically necessary outpatient expenses (after you meet the deductible). But it may affect your decision to choose an Advantage or Medigap plan. Advantage plans will not reject anyone based on health conditions, but remember with Advantage, your provider must be in your network, including your specialists, like cardiologists, surgeons, etc.

RB: Are there scenarios in which someone with Medigap would switch from Plan N?

AP: Plan N has a lower premium than G or F, and your coverage may be just fine given your needs, but each Medigap plan has its pros and cons. With N, you carry more upfront costs, like copays, as you would in a high-deductible health plan. You also are on the hook for excess charges that providers can add beyond Medicare rates. In many states, providers can add up to 15% on top of Medicare-approved rates. For some people, the risk of having to pay excess charges isn’t worth the lower premiums of Plan N.

RB: If you try to switch to plans and get rejected, is there a penalty?

AP: No, there are no penalties, and really, no risk to seeing if you can switch plans. It’s worth going through the process just to see if you can get coverage that better suits your health care needs and at a better price.

Ready to review your Medicare? Here’s how.

RB: What information do you need to bring to the consultation with Chapter when revisiting your Medicare coverage?

AP: Most of our meetings are done virtually, such as through Zoom, and to prepare, just remember the three P's. Bring your list of providers, your prescriptions and know your top priorities for coverage, such as cost, quality of care and choice. It would be helpful to know your general health history in the past two to three years, such as any chronic conditions. The meeting itself may last just 30 minutes, during which time our system will generate the top three or so plans based on your needs.

RB: Can they meet before AEP starts? Is there a best time to meet?

AP: Good question. I wouldn't recommend holding a review before the start of AEP as the new pricing on all of the plans is not released until around the beginning of AEP (Oct. 15). But the sooner the better after that, so try to get the review done with us before Thanksgiving within the AEP window (which ends Dec. 7). There is absolutely no obligation to switch plans, but this way, you will have done your due diligence. And, for Edelman Financial Engines clients, there is no cost to use our services.

RB: Thanks, Ari. Any of our clients who want to review their Medicare coverage during AEP can reach out to their planner, who can send them information on how to arrange a meeting with a Chapter consultant. It can be an easy process. Considering we’re talking about your health, it’s worth doing.

Chapter Advisory LLC (“Chapter”) is not a client, agent, representative or affiliate of Edelman Financial Engines ("EFE"). There is no compensation for this relationship and therefore has no conflict of interest. Insurance agency services are provided by Chapter, a licensed health insurance agency. In California, Chapter does business as Chapter Insurance Services (Lic. No. 6003691). Chapter and its affiliates are not connected with or endorsed by any government entity or the federal Medicare program. The products or services described are not provided by EFE or any of its affiliated companies. EFE, its affiliated companies, and your financial services professional are not affiliated with Chapter or its affiliated companies; and make no representations or warranties about the suitability of the products and services offered.