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Consider These Costs Before Switching from Medicare Advantage to Original Medical During AEP

The Medicare Annual Enrollment Period is open now through December 7. During that time, kupuna have the option to switch from Original Medicare to a Medicare Advantage (MA) plan, switch from one Medicare Advantage plan to another, or to drop Medicare Advantage in favor of Original Medicare. If you are thinking about switching from a MA plan to Original Medicare, we encourage you to consider this list of costs before making a final decision.

Consider These Costs Before Switching from Medicare Advantage to Original Medical During Annual Enrollment Period

There are many reasons that a growing number of Medicare beneficiaries are choosing Medicare Advantage plans, one of them being the potential cost savings. Here are some costs to consider before switching from a MA plan to traditional Medicare:

1. Out-of-pocket maximum

While both MA and traditional Medicare have copays and deductibles, Medicare Advantage plans cap out-of-pocket expenses with an annual out-of-pocket maximum. On traditional Medicare, beneficiaries can end up with thousands of dollars in bills above what they would have paid with a Medicare Advantage plan if they have expensive procedures or extensive hospital stays in a given year. In 2023, the MA out-of-pocket cap will be $8,300.

2. Additional services

While Medicare is designed to cover most basic healthcare services, it does not cover hearing, dental, or vision services. For seniors who are used to full coverage employer plans, this can come as a real shock to the wallet. Suddenly the cost of a dental cleaning, hearing test, or eye exam are not covered and will need to be paid out-of-pocket.

Note: Many seniors who choose traditional Medicare opt to add a Medigap plan to cover some of the costs that basic Medicare does not cover, such as coinsurance and copays. It is important to understand that Medigap plans do not pay for services not covered by Medicare, including hearing, dental, and vision.

3. Part D late enrollment penalty

Most Medicare Advantage plans include prescription drug coverage, making them more of a one-stop-shop for health insurance. Kupuna on traditional Medicare must purchase a standalone Part D plan if they want prescription drug coverage and can end up paying a Part D late enrollment penalty if they fail to enroll in prescription drug coverage when they were first eligible.

4. Qualifying for a Medigap plan is not a guarantee

If seniors don’t take advantage of their Initial Enrollment Period to enroll in a Medigap plan, the private insurance companies that offer Medigap plans are allowed to make applicants go through a medical underwriting process where they review your health history and decide whether to insure you, delay coverage, deny coverage for a pre-existing condition, or charge a higher premium because of your health status.

Unless your Medicare Advantage plan is terminating coverage, you will not have guaranteed-issue rights to a Medigap policy if you decide to switch back to Original Medicare. The only other exception is if you had a Medigap policy previously but dropped it to try an Advantage Plan for the first time. In this case, seniors get a 12-month trial period where you can cancel your MA plan and return to the Medigap plan they were previously enrolled in.

If you are debating switching Medicare plans during fall open enrollment, it’s not too late to contact a Medicare agent with any questions. Ultimately, you should enroll in the plan(s) that best fit your needs, whether that be a Medicare Advantage plan, or traditional Medicare with supplemental insurance.

Our independent insurance agents are dedicated to assisting people on Medicare and those who are ready to transition from employer coverage to personal retirement coverage. We help kupuna understand their benefits options and apply for additional coverage, as needed. We are the only insurance agency in Hawaii contracted with EVERY Medicare Advantage plan, which means we are able to offer unbiased advice; all at no cost to our clients.

At PBC, our clients are our number one priority and we look forward to getting to know you and your needs. Call us today at (808) 738-4500 to see how we may be of assistance.


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