Posts Tagged "policies"
November 22, 2022
Tis the Season to Shop for Medicare Options
Americans are fighting back against soaring food prices by shopping at discount grocers, buying lower-cost store brands, or giving up their favorite gourmet items.
Yet Medicare beneficiaries usually don’t shop around for a less expensive insurance policy or a higher quality one. It’s also advisable for retirees to review their current plans to make sure they still include the right doctors or prescription drugs for treating any new medical conditions. Open enrollment for Medicare Advantage and Part D plans started Oct. 15 and ends Dec. 7.
Over their lifetimes, retirees will spend an average $67,000 out-of-pocket for medical care – and that does not include the monthly premiums. The least healthy retirees will pay twice that much.
Yet only three in 10 people surveyed in 2019 by the Kaiser Family Foundation said they compared their existing Medicare insurance policies with the new policies that came on the market during open enrollment for 2020. Three groups who would probably benefit most had the lowest rates of shopping around: low-income and minority retirees and people over 85.
Given retirees’ reluctance to comparison shop, it should not be a surprise that the vast majority stay put and don’t change their policies. The share of people who do change a plan bounces around from year to year but not by much, Kaiser found. …Learn More
June 29, 2021
Enrollment Trends in Medicare Options
Most retirees manage to get by on less than they earned as workers. Yet they devote a much larger percentage of their income to medical care than working people.
To limit their annual spending on care, retirees usually buy some type of insurance policy to help pay the bills Medicare does not cover. But a big shift is under way: the Medigap and employer plans that once dominated are now in decline. Only about a third of retirees have one of these two supplementary arrangements, down from two-thirds in 2002.
Retirees are instead swarming into Medicare Advantage plans – HMOs run by insurance companies – which doubled enrollment in the past decade to become the most popular form of coverage. A small minority of retirees go without any policy at all, so the only premium they pay is for Medicare Part B’s physician coverage. (The Part A hospital coverage has no premium.) At the same time, the vast majority of retirees today enjoy prescription drug coverage, either through a stand-alone Part D plan or as part of an employer or Advantage plan.
Helen Levy at the University of Michigan digs into what the market changes mean for retirees’ bottom line in recent research funded by the U.S. Social Security Administration.
With fewer employers offering retiree health insurance, new Medicare beneficiaries focus on the tradeoffs between Medigap and Advantage policies. A big reason the Advantage plans have taken off is lower premiums, which are, on average, substantially below the premiums on Medigap plans. Advantage plans’ other appeal is that they frequently cover extra services like dentists and eyeglasses.
Both Advantage and Medigap plans can still leave beneficiaries with high out-of-pocket spending. The federal limit on Advantage plans’ deductibles and copays increased this year to $7,550 per year, though insurers are permitted to reduce this cap. Many Medigap plans do not have out-of-pocket maximums at all. However, these plans tend to give more protection from large medical bills overall.
Just as important to retirees as paying the bills is the risk of being socked with inordinately high spending on hospital and physician care in a bad year. Levy defines this unpredictability as retirees having to shell out more than 10 percent of income out of their pockets, excluding all premiums.
Under this standard, about 23 percent of the retirees in the study with Advantage plans spent more than 10 percent of their income for care – versus 17 percent of Medigap buyers. About 28 percent of those without any coverage outside of Medicare exceeded the 10-percent threshold. …Learn More