Costs to Consider Before Leaving the Medicare Advantage Plan Completely

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For some Medicare beneficiaries, an Advantage plan ends up not being suitable.

If you’re in this situation and are considering dropping your plan to return to basic health insurance — Part A (hospital coverage) and Part B (outpatient services) — there are some things to consider before you do. not.

While you generally have the freedom to go to any doctor or other provider you choose instead of only seeing those in a plan’s network, the switch would likely incur new costs.

“It is important to compare [coverage options] not only on a provider and drug basis, but also on your overall financial situation,” said Elizabeth Gavino, Founder of Lewin & Gavino and Independent Broker and Managing General Agent for Health Insurance Plans.

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During Medicare’s annual open enrollment period, which began October 15 and ends December 7, you can make changes to your coverage. Here’s what to consider if you want to ditch an Advantage plan altogether.

Basic health insurance has its own costs

From the 61st to the 90th day, coinsurance will be $400 per day in 2023. For lifetime reserve days, the charge will be $800 per day.

As for Part B, the standard premium next year is $164.90 (although higher-income beneficiaries pay more). The deductible will be $226 and you will then typically pay 20% of the cost of the services.

“That could include expensive things like outpatient surgery, diagnostic tests, ambulance rides, chemotherapy and dialysis,” said Danielle Roberts, co-founder of insurance company Boomer Benefits.

There is also no maximum outlay with basic health insurance. However, you may be able to get a Medigap policy, which would cover some of the cost sharing.

Getting a Medigap plan is not a given

Be aware, however, that you may need to go through medical underwriting to be approved for this type of supplement.

Medigap plans, which are also sold by private insurance companies, help cover the cost-sharing aspects of Parts A and B, including copayments and coinsurance. The policies are standardized — plans of the same name offer identical benefits no matter which insurer sells them — but premiums vary by plan, insurer and location.

These plans also come with their own set of enrollment rules.

When you first enroll in Part B, you have six months to purchase a Medigap policy without an insurance company looking at your medical history and deciding whether or not to insure you. After that, unless you meet a special exception or live in a state with no enrollment restrictions, you usually have to go through medical underwriting.

There is no guarantee that the underwriter will approve you for the Medigap policy.

Danielle Robert

Co-founder of Boomer Benefits

“There is no guarantee that the underwriter will approve you for the Medigap policy,” Roberts said.

This means it may be wise to avoid dropping your Advantage plan until you know you would be able to get the Medigap policy.

There is one exception: if you had a Medigap policy but left it to try an Advantage plan for the first time, you have one year to change your mind. This 12-month trial period allows you to drop an Advantage plan and revert to the Medigap plan you were previously enrolled in.

Also be aware that while Medigap plans help cover the costs of Parts A and B, they do not provide any coverage for Part D.

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