Medicare policy descriptions you should know

What is a Cost Plan ? Minnesota is the final hold out in the United States that still provides Cost plans.  This is the last year you can get a Cost plan in Minnesota.  Almost all the Medicare plans in the US are Advantage plans. 


In Minnesota there are more than 400,000 cost plan members. A cost plan allows you to have a separate Health Plan and Part-D Medication plan with one or different companies or a combination of both plans from one company.  


What is a Part D Plan ? In 2019 you can still select a stand-alone Part D medication plan but only if you have just a Supplemental plan such as Blue Cross Senior Gold.  


If you have two separate plans, understand that both insurance companies will contact you by phone (telemarketers) suggesting that you select their Advantage plan for 2019. All Advantage plans are not created equally, so call me first to explain the differences.


Additionally, if you change plans by calling the insurance company, attending an insurance sponsored seminar or answering a out-of-state telemarketer sales call, then you will not have me as your dedicated agent. The only way to have a dedicated agent that works for you, is to call me and review all the plans – not just one! 


What is an Advantage Plan ? Advantage plans are the norm in the United States. An Advantage plan is one which has both Health and Part-D with one company. 


Generally, Advantage plans are lower in cost compared to Cost plans.  They can have higher co-pays, deductibles and maximum-out-of-pocket limits.  Depending on the plan type, networks can be different based on geographical location. 


In many cases, lower priced Advantage plans have original Medicare cost sharing. In other words, depending on the plan, you may pay 20% of the total cost of health care.  So be careful about selecting an Advantage plan. The low up front monthly premium may cost you less, but the co-pays could cost more.


What is a Supplemental Plan ? A Supplemental plan off-sets the cost of original Medicare (Part-A and Part-B). Each state regulates the benefits offered. Depending on the state, you can have Portability, that allows you to keep your plan and benefits even if you move out of state. Supplemental polices do not include Part D medications. 


Those who have purchased these plans, let’s say over 10-years ago, no longer need the portability benefit and are paying more than twice the rate for a policy.  


A Supplemental plan can only be issued the first time you are eligible for Medicare without medical underwriting.  You can apply for a Supplemental after you have had  a Medicare policy but you will have to undergo a full medical review, unless you have a Guarantee Issue when your Cost plan goes away.


Medicare policy descriptions you should know about can be confusing. But now you know what they are so you can be a  smarter consumer when it comes to Medicare policies.