Medicare: What You Need to Know to Properly Utilize Your Coverage

By: Cynthia Sender


Given that Medicare open enrollment began on October 15th and continues through December 7th, it is timely to provide a summary of what this benefit means for seniors. There are financial implications with the choices involved, and what you see is not always what you get. You’ve probably noticed an uptick in commercials and mailers describing the major Medicare Supplemental insurers’ plan options. What I am referencing is insurance coverage for the 20% of care that is not automatically covered by Medicare. When you turn 65, in most cases you are required to enroll in Medicare, which covers 80% of your medical care (Parts A and B). You are responsible for choosing a plan to cover the remaining 20%, along with prescription drug coverage.

I sat down with my trusted colleague, Brian VandeHei, an Independent Medicare Advocate, to learn more about the nuances of the plans, and how to effectively find the right plan for you. As a licensed insurance agent with expertise, training and credentials in the over-65 insurance market, Brian represents the Medicare HMO and PPO Supplemental insurance plans. Each of the major insurance companies offer both an HMO and PPO plan — United Healthcare, Anthem Blue Cross, Blue Shield, and Health Net, among others. These major insurers’ premiums are typically priced within of a variance of $5.00 to $10.00 per month for similar coverage. It is important to base your decision regarding a plan on your specific utilization of services, and your annual expenditures on medical office visits, and prescription drugs.

Often, the HMO plans offer the appropriate coverage, and enrolling in a PPO plan doesn’t provide a distinct advantage. If all of your physicians are contracted with a medical group that is covered by an HMO, and the drugs you are prescribed are covered, you will save approximately $200.00 per month by opting for the HMO. The main reason to choose a PPO is that you are able to receive care “out-of-network” without any extra fees; for example, receiving care at City of Hope or UCLA would be out-of-network if you live in Orange County, CA. If you are looking for care in Orange County, look at the HMO options, and specifically the physician groups contracted within the HMO plan, and you may find that many of your physicians are part of the network in this contract. A PPO plan would be overkill, and a significant waste of money. Regarding prescription drug coverage, Part D if you are enrolled in a PPO, you are required to purchase a Drug Plan for an additional $30.00 per month, along with the copays at the pharmacy. If you are enrolled in an HMO, Part D coverage is included, and you are responsible only for copays at the pharmacy.

There are two key reasons why one would look into changing their plan during open enrollment: 1) either one’s primary care physician or a specialist no longer accepts the existing plan, or 2) the medication prescribed is too expensive or not covered at all. The drug formularies (the list of generic and brand name prescription drugs) are not equal among plans. Many Seniors spend up to $2,000.00 per year on medications. It is important to check the plan’s formularies before selecting a plan. In addition, avoid being “sold” a plan from a captive agent working for only one insurance carrier without looking at other options. These agents won’t be able to truly offer you a comparison of plans, as they are familiar only with the one they represent.

Another Medicare Advantage option (HMO) in Southern California and parts of Northern California is SCAN. SCAN is an HMO contracted by Medicare. It is unique because it is a non-profit entity. Medicare contracts with SCAN to provide coverage at $0 out-of-pocket to the member. The plan is incentivized by Medicare and their 5-Star rating system. When members with more complex health issues are kept healthy, out of the hospital, and safe —the plan earns high marks from Medicare. The funds paid to SCAN per member increase with proper chronic disease management. As a result, the plan continues to add benefits and upgrade services for its members. It is a win-win! Acupuncture and chiropractic services were recently added benefits. SCAN has some amazing plans for those living with specific chronic conditions: CHF (congestive heart failure) and diabetes are two examples. SCAN is recognized for their exceptional management of chronic diseases.

Another important factor to compare is the copay for a skilled nursing facility stay. Check how many days are covered before the cost increases. There is a big variance between plans. Compare SCAN vs. other carriers. For non-routine benefits, i.e. for access to more specialists, Health Net offers a comprehensive PPO plan. Another benefit to focus on is hospitalization coverage. Kaiser’s copay is $280.00 per day to day 7. That is a significantly higher cost than SCAN’s hospital benefits. For the record, Brian does not offer Kaiser Supplemental Insurance plans. They are strictly available through Kaiser’s in-house sales representatives. Beware of and compare the out-of-pocket costs with Kaiser’s plans.

This information is intended to be an overview. For specific plan details, please reach out to Brian VandeHei at (920) 366-0086. Brian has helped many of my clients, as well as my own parents. They were very grateful for his expertise. His advice is free of charge, and his motivation is to educate seniors regarding their options.

Open enrollment continues until December 7, 2018 for coverage beginning on January 1, 2019. Take the time to evaluate this opportunity and make a sound decision.