The Northern Light sat down with Cascadia Insurance owner Aaron Abraham to discuss recent changes to Medicare before the open enrollment period starts Tuesday, October 15.
The enrollment period allows Medicare recipients to make changes to their health or prescription drug plans through December 7, with those changes going into effect January 1, 2025.
About 67.5 million people in the U.S. are signed up for Medicare, nearly 90 percent of whom are 65 years or older, according to the U.S. Centers for Medicare and Medicaid Services. Medicare is also available to some people younger than 65 who have a disability.
Abraham, a Bellingham-based licensed insurance agent who has specialized in Medicare policies for 17 years, talks about the biggest misconceptions, changes to the Medicare Advantage plans, and what he recommends for people enrolling this fall.
The responses were edited for brevity and clarity.
A: One big one that I think has mostly been dispelled now is we used to get a lot of folks asking how much Medicare is going to cover for themselves or a loved one if they go into a nursing home. There is a nursing home benefit or recovery, but not for chronic care.
The other misconception is between Medicare Advantage and Medicare supplements. They are two very different types of coverage, and carriers with the same name offer both types of coverage, so there’s a lot of confusion. It’s up to the consumer to decide which works better for them.
A Medicare supplement, as the name implies, supplements original Medicare. Medicare covers 80 percent of approved charges, but there are still copays and deductibles. The supplement fills in the gaps, which is why it’s known as the Medigap policy. You can essentially have nearly 100 percent coverage. There’s still the Part B deductible which this year was $240. Someone can have 100 percent coverage after that deductible, so they would never pay any Medicare-approved bill at all. The supplement is a prepaid system where you pay a higher premium than the Medicare Advantage plan but you have almost full coverage.
A Medicare Advantage plan is the privatized version of Medicare where you select a private insurance company to administer the benefits for you, typically in a copay structure. It’s what I refer to as the pay-as-you-go system. You have a very low premium or no premium, but then you have copays when you go to the doctor, and it’s billed to a private company, not to Medicare.
A: There are about 1.5 million people in Washington signed up for Medicare, about half of those are on Medicare Advantage plans. Those plans change each year.
On October 1, Advantage Plan members should have received their annual notice of change letters and some folks got letters stating their plan is no longer going to be in the area as of December 31. Unfortunately, this is an absolutely massive service area reduction. Approximately one in six folks on the Medicare Advantage plan are losing their coverage and have an enrollment window right now to choose another plan.
The positive side is that normally to get on one of those Medicare supplement plans, the so-called prepaid plans, typically you have to go through underwriting where you answer health questions and can be denied coverage. If someone loses a plan because of the service area reduction, they are guaranteed eligible and can move to a Medicare supplement plan regardless of their health conditions.
In essence, someone could be going through cancer treatments and if they are losing their Medicare Advantage plan, they could enroll in the Medicare supplement that would pick up those costs in full, minus a small deductible, starting January 1.
A: This year we are seeing a general erosion of benefits to the Medicare Advantage plans. So not only are some plans leaving, but other plans have added a medical deductible where it didn’t exist or increased copays.
I think a lot of the service area reduction and erosion of benefits on the Medicare Advantage side, the privatized side, is due to the reimbursement rate from Medicare. Each plan is given a star rating out of five stars and the reimbursement is determined by those star ratings. The general reimbursement rate from Medicare has been reduced too.
A: This is an easy one. I wish more people knew they could seek out agents like myself for no-cost assistance specializing in the complexities of Medicare, and yet, a majority of clients do not have an agent working for them. We are unbiased in trying to find a plan that fits their needs and experts in navigating the complexities of a government-run healthcare system.
Comments
No comments on this item Please log in to comment by clicking here