Ask Kim
Ditch These Medicare-Supplement Plans
Plans H, I and J aren't such good deals any more. You'll get better coverage at a better price from Medicare Advantage of Medicare Part D.
By Kimberly Lankford, Contributing Editor, Kiplinger's Personal Finance
May 19, 2008
I have heard that Medicare Advantage plans will be phased out in the next few years. If that's the case, is it prudent to switch from the Medicare-supplement Plan J that I now have to a Medicare Advantage plan?
Actually, the discussion has not been about phasing out Medicare Advantage. Congress has been talking about lowering the generous subsidies the government pays to private insurers that provide Medicare Advantage plans, but so far nothing has changed. If Congress does end up lowering the subsidies, the prices for Medicare Advantage plans could rise. If that happens, though, you could always switch back to traditional Medicare and get supplemental coverage through a medigap policy.
One thing is for sure: You'll want to bail out of your particular Medicare-supplement (medigap) plan as soon as you're allowed to switch. When the Medicare prescription-drug benefit was introduced in 2006, Medicare-supplement companies stopped selling new policies that provided coverage for prescription drugs (Plans H, I and J). People who already had these plans could keep them. However, the premiums are higher than for government-subsidized Medicare Part D or Medicare Advantage, and the coverage isn't as good.
You can switch into another medigap policy and get your drug coverage through Part D, or you can get all of your medical and drug coverage through a private Medicare Advantage plan. The premiums for medigap plus Part D tend to be higher than they are for Medicare Advantage, but you'll usually have fewer out-of-pocket costs and more flexibility to use whatever doctors you choose.
For help deciding which plan is right for you, see What Does That Medicare Plan Really Offer? for more information about Medicare Advantage plans and Medicare Drug Plan Premiums to Rise for information about Part D prescription-drug plans. Also see our Financial Toolkit for tips on buying a medigap policy.
For more information about the specific Medicare Part D plans available in your area -- including premiums as well as an out-of-pocket cost calculator -- see the Medicare Prescription Drug Plan Finder; for details on Medicare Advantage plans, see the Medicare Options Compare Tool.
Reader Comments (3)
Posted by: Danielle Scheffler at 11/28/2009 09:38:20 PM
"If that happens, though, you could always switch back to traditional Medicare and get supplemental coverage through a medigap policy." Wow! Be very careful about advising people that they can just ALWAYS switch back to traditional medicare and jump on a medigap policy! Unless they are in guaranteed issue enrollment health plays a MAJOR factor in whether people can even get a medigap policy!!!! Six months before 65 and six months after you can get any medigap plan you wish with no health underwriting. If you are losing credible employer coverage. Or, as has happened to many people this year, if your Medicare Advantage plan disenrolls you because they are terminating coverage. Then you have the magical golden ticket called "guaranteed issue" which equals no health underwriting for any medigap plan you wish to have. In one more instance if you were enrolled in a medigap policy then switched to an Advantage Plan you have 12 months to go back onto traditional medicare and choose a another medigap and you are still considered "guaranteed issue" at that point as well. ANYONE who doesn't have end-stage renal disease can get a Medicare Advantage Plan. But not EVERYONE can get a medigap policy. People should seriously consider this when deciding to give up their medicare supplment because YOU CAN NOT ALWAYS GO BACK!
Posted by: Gary Isgrigg at 02/26/2010 05:55:29 AM
Which Medigap plan is the best one for the money? If you could give me what you think are the top five best companies then I could go from there. I might even subscribe to the Kiplinger Letter. Thanks...
Posted by: Jim Nolker at 03/14/2010 09:18:28 AM
Advising people to bail out of traditional Medicare & a Medicare Supplement and go to Advantage plan because of lower initial premiums is irresponsible. The RX portion of Advantage plan coverage is usually the best reason NOT to chose an Advantage plan. Also, if people think they can always switch back to Medicare and get a supplement they're probably in for a rude awakening.