Nov. 15, 2023 – Are you new to Medicare? Navigating Medicare health insurance products sold in Wisconsin can be a confusing and overwhelming experience. There are a lot of choices – and you probably haven’t thought much about it unless you’ve helped an older family member navigate health care.
As a Medicare insurance consumer, you should first understand how Medicare works and then explore the insurance options you can choose from.
About Medicare
In very simple terms, Medicare has three major components:
Medicare Part A, which covers hospital services and does not have a premium for most people;
Medicare Part B, which covers outpatient services such as doctor visits, and has an income-based premium (most people will pay $174.70/month in 2024); and
Medicare part D, which covers prescription drugs. Medicare Part D plans usually have a premium and are purchased through private health insurance companies.
In addition to the Part B premium, there are out-of-pocket expenses not covered by Medicare. There are deductibles and co-pays for Part A, and there is a deductible and co-insurance for Part B.
Covering What Medicare Doesn’t
Out-of-pocket expenses not covered by Medicare can be significant and fluctuate year-to-year based on health care use. For most people, it is not advisable to go without insurance to cover these out-of-pocket expenses.
There are two paths you can choose from when deciding insurance for out-of-pocket expenses Medicare doesn’t cover:
a Medicare supplement plan, also called a Medigap policy, with an individual Part D plan for prescription drugs; or
a Medicare Advantage plan, which covers both medical care and prescription drugs.
Medicare Supplement Insurance: Individuals who are eligible for Medicare can enroll in the Medicare program to receive their Part A and Part B coverage (Original Medicare) and purchase a separate Medicare supplement insurance policy to cover the out-of-pocket expenses Medicare doesn’t cover.
There are more than 40 different insurance carriers that offer Medicare supplement policies in Wisconsin. Medicare supplement policies have state-mandated benefits, so this is one of the rare times you get to compare apples to apples.
Some Medicare supplement policies do have additional benefits, but in the materially important ways, they all allow you to go to any doctor or hospital in the U.S. that accepts Medicare.
Medicare Advantage plans are Medicare-approved and obtained from private health insurance companies. These plans offer an alternative to Medicare Parts A and B (Original Medicare) for health care and prescription drug coverage.
These “bundled” plans include Part A, Part B, and usually Part D, as well as coverage for out-of-pocket expenses Medicare doesn’t cover. All of these services are paid by the Medicare Advantage coverage and not by Original Medicare.
Medicare Advantage plans include health maintenance organizations, preferred provider organizations, private fee-for-service plans, special needs plans, and medical savings account plans. In many cases, you can only use doctors who are in the plan’s network, and you may need to get approval from your plan before it covers certain drugs or services.
How to Choose the Medicare Options that are Best for You
How do you choose from all these Medicare options? Each of these insurance products are quite different from each other. If you are looking for a simple way to differentiate them, look at cost and provider choice.
It’s best to pick a plan you can afford that allows you access to the doctors and other health care professionals that you use now and want to continue to use in the future.
Here are a few tips:
Tip 1: Be a savvy consumer. Be leery of the ads you see on tv. For example, some offer to add money to your Social Security check – they are probably talking about the premium for Medicare Part B, and most people don’t qualify for this federal program.
All Medicare beneficiaries in Wisconsin must pay the Medicare part B premium unless they meet the federal government’s low-income requirements.
In 2023, an individual must have an annual income less than $19,683, and a couple must have an annual income under $26,616 to be exempt from paying the premium for Medicare Part B. These annual totals include any Social Security benefits received.
Tip #2: Focus on overall cost (but don’t let that be your only deciding factor). You should consider both the premiums you will pay for insurance as well as your expected out-of-pocket costs based on the coverage options provided.
Medicare Supplement plans along with Original Medicare usually have a higher monthly premium than Medicare Advantage plans. However, the overall cost may be higher for a Medicare Advantage plan depending on your circumstances, such as if you will be using out-of-network providers.
If you can’t qualify under another insurance companies’ health underwriting requirements to change plans and you still want the features of a Medicare supplement policy, you keep what you have. Often people can change supplements, and I recommend exploring the option first before you give up a supplement and move to an Advantage plan based solely on the total annual premium cost.
Once you select your coverage option, it is worth reviewing your options from time to time to be sure you are getting the best value for your money.
Tip #3: Assess provider access to your doctors and hospitals. With a Medicare supplement, you can go to any doctor or hospital in U.S. that takes Medicare. If you buy the richest policy option available to people going on Medicare after 2020, your medical costs will not exceed the Part B deductible each year.
In 2024, the Part B annual deductible is $240. Often when people are new to Medicare, the annual cost of a Medicare supplement plan is less than the out-of-pocket maximum on an Advantage plan. Of course, if you are healthy and thus have no health care expenses, you may not benefit from the insurance. However, if you become unhealthy, you have the greatest doctor choice and fixed costs on a Medicare supplement policy.
It is important to consider a Medicare supplement policy when you first are eligible for Medicare because you may not have another opportunity to purchase one. People who have certain serious health conditions, who are already on Medicare and have a Medicare Advantage plan, may not qualify medically to buy a Medicare supplement policy, especially if they are outside of their initial enrollment period (the six months after they turn 65 or come off employer-based insurance).
Medicare Advantage plans are an appealing choice if the doctors and other health care professionals you wish to use are included in the plan’s provider network. Many people also like the additional benefits some Medicare Advantage plans offer.
Tip #4: Use online comparison tools. Medicare Open Enrollment can be a confusing time of year for people on Medicare, because there are so many Medicare-related health insurance plan choices available for sale in Wisconsin.
When you use the online comparison tools created by Medicare, you will be able as a Medicare beneficiary to see your options for Medicare Part D and Medicare Advantage all in one place.
Start your research at medicare.gov. On this website, you can look at plans specific to your needs – click on “Find Plans.”
To explore Medicare Part D prescription drug plans, enter your ZIP code, click “Continue,” then click on “Medicare drug plan” and then “Find Plans.”
If you choose “I don’t get help from any of these programs” and then “next,” click on “Yes” to see drug costs and enter the prescription drugs you need, then chose “Done Adding Drugs.”
You then select the pharmacy you want to use and click “Done” in the lower right corner. You will then be given a list of the Part D prescription drug plans available in your area that is priced best for the prescription drugs you take.
A Medicare Part D prescription drug plan is a very counter-intuitive consumer product because the monthly premium price of the insurance does not imply the actual value to you. More than half of my clients will buy plans that have a monthly premium of less than $10/month in 2024, and most take prescription medications.
To find a list of available Advantage Plans in your area, visit medicare.gov and choose “Find Plans.” Enter your ZIP code, choose “Continue,” then “Medicare Advantage Plan,” and “Find Plans.”
If you choose “I don’t get help from any of these programs” and then “next,” click on “Yes” to see drug costs and enter the prescription drugs you need, then chose “Done Adding Drugs.”
You then select the pharmacy you want to use and click “Done” in the lower right corner. You will then be shown the list of available Advantage Plans in your area, starting with the least expensive plan based on your medications and premium cost.
Tip #5: Don’t enroll in a plan based on premium cost alone. You will want to verify that the plan’s provider network includes the doctors and other health care professionals you see or may want to see in the future.
A word of caution: Be careful about plans that suggest you can go to any doctor. Plans may allow you to go to any doctor, but if the doctor you want to see doesn’t accept the terms and conditions of the Medicare Advantage plan, the doctor or hospital will not allow you to go to them.
If your provider is out of network, you should not go to them unless you first obtain advance approval to do so from your Medicare Advantage plan and the provider.
If you go to an out-of-network provider without first obtaining approval from the provider and the plan, the cost of that doctor's visit and associated related costs of that visit may not be covered by your plan and you'll then have to pay out of your own pocket.
One Last Tip: Work with a Trusted Advisor
There are so many different policies to choose from. In Wisconsin, there are at least 40 different insurance companies that sell Medicare supplements. There are at least 21 different Medicare prescription drug plans, and at least 35 different Medicare Advantage plans.
I recommend that you choose your plan based on how the plan accommodates your provider preferences and prescription medication costs. Everyone has different needs – even spouses can use different plans, and that makes sense.
I suggest you contact an experienced insurance agent licensed to sell Medicare supplement plans and Medicare Advantage plans in Wisconsin. They will talk with you about your health care insurance needs and answer all your questions about your Medicare-related health insurance options. Agents who sell Medicare Supplement plans, Part D prescription drug plans, and Medicare Advantage plans can let you know your available options.
In choosing your plans, focus on how you want to receive your health care services. A Medicare Advantage plan that includes some dental care services is a nice additional benefit, but don't miss the forest for the trees by focusing just on that feature.
Open enrollment is a busy time for most agents, so be prepared to make an appointment either by phone or in person.
Worried about cost? If you buy a policy through an agent, you shouldn't have to pay the agent a consultation fee directly, because agents are compensated in the form of commission paid to them by the health insurance company which is issuing the plan.
Additionally, you should never feel obligated to enroll in a plan at your meeting with the agent. Explore your options and then determine which plan is best for you.
