There are some major changes ahead for Medicare supplement and Medicare Advantage plans. Under the Affordable Patient Protection and Affordable Care Act, hundreds of billions in scheduled cuts to Medicare Advantage subsidies are scheduled to take effect in 2013. However, the Department of Health and Human Services recently announced that it will be $8.3 billion in 2013 to Medicare Advantage plans as a bonus to help offset the cuts in funding. GOA auditors suspect that the administration is trying to delay the cuts in coverage until after the election. This is because the annual election period for the 2013 plans start October 15th, right before the election, and that’s when people find out what their plan will look like for next year. So the bottom line for Medicare Advantage plan participants is that 2013 may not look too different from 2012, but by 2014 we’re likely to see some drastic increases in premiums that you pay for the plan. How does this make healthcare more affordable for Americans?
As for Medicare Supplement plans, there has not been a lot of news about what’s coming, but what we do know is not good. The President has promised a 15% excise tax on Medicare supplement plans C, F and G. This will take effect in 2017, along with a surcharge for your Medicare Part B premium for people who buy these plans. The aim of this strategy is to discourage people from buying the first dollar coverage plans. People who have these plans pay very little or nothing when they go see a doctor or are hospitalized. The fear is that people on these plans use healthcare more often since it doesn’t cost them anything. So they’re going to start taxing you more heavily if you buy those plans. Again I ask, how does this make healthcare more affordable for our seniors? I guess the idea is to make people use it less, and pay more for it, and then we save money on it…hmmm. Something just doesn’t seem right about that.
Plan F has long been one of the most popular plans as it covers all of the out-of-pocket costs on Medicare-approved services. However, in recent years there has been a big increase in people buying the new Plan N, which rolled out in June 2010. Plan N requires that the patient pays the Part B deductible ($140 per year in 2012) and a $20 copay for physician office visits. Plan N is quite a bit less expensive than Plan F, so it’s worth looking at. Another good option is Plan G, which is almost the same as Plan F. The only difference is that you have to pay the Part B deductible each year (which is only $140 this year). In some states Plan G is as much as $30 cheaper per month than Plan F. You save $360 in premiums for the year, pay the $140 deductible, and pocket the $220 savings. Often, Plan G will take slightly lower price increases than Plan F, so that is good for the long term as well. Plan G is currently still on the list of plans that will get the tax surcharge in 2017, but that could change.
One nice thing about Medicare Supplement plans is you can change plans at any time, as long as you can answer all the health questions OK. For more information on Medicare Supplment plans, and premium pricing CLICK HERE.