Should we dump our Medicare supplement and invest the money to cover future co-pays instead?

Should we dump our Medicare supplement and invest the money to cover future co-pays instead?
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#1

I have read a blog on the Huffington Post by Dr. David Belk advising Medicare supplements may not be useful for everyone.

My husband and I are on Medicare with a Blue Shield of California supplement. Dear husband is 73-years-old and I am the oh-so-much younger 67. We pay $4,700/year in premiums, are both healthy and have no recurring 'scrips. I did have a total knee replacement in 2012. While looking over the payments made, I found that Blue Shield paid a total of $1,100 from pre-tests to last physical therapy and everything in between. Medicare paid everything else, including the surgeon who “billed” Medicare for $20,000 and was actually paid $858.

We’re thinking of dumping our supplement, and investing the $4,700 each year to cover future co-pays and such. We would appreciate any insight you may give us. Thank you.


#2

All medicare supplements or "Medigap" insurance plans are designed to supplement your original Medicare plan and help pay some of the health care costs that original Medicare doesn't cover, like copayments, coinsurance, deductibles, when you travel outside the U.S. and some cover prescription drugs as well. Supplemental policies do not usually cover any medical services Medicare won't cover. Each lettered Medigap policy must by law offer exactly the same benefits, regardless of the insurer that sells it. But insurers still charge widely varied premiums, so it pays to shop around. 

Are they worth it? That really depends on how frequently you see a provider and what medical services you have done each year. The problem is, insurance is there to cover what you don't expect. Based on what you are describing, if you are healthy and only see a doctor a few times a year, then having a Medigap policy is probably "over insuring" yourself.  If you are disciplined and can put the money you would have paid for the insurance premiums ($4700) into an account in "case" the unexpected happens, then keeping the money in your pocket vs. the insurance companies may be the wiser choice.






#3

If you can enroll back at any time into a MediGap or secondary plan should the worst happen, then  saving that premium money might be a good idea. 

Do you have a HSA plan you could contribute to? 

If you choose to continue your enrollment, remember premiums may be deductible on your tax return as a medical expense. 


#4

From my 37 years of working with clients on Medicare, I suggest you see if there is an insurance plan like United Health (AARP), Health Net or Cigna, etc. that may have lower premiums than your Blue Shield. I am curious as to what Blue Shield Supplement you have?

Maybe you would be happier with a Medicare Advantage.............HMO or PPO.

I have found that there have been many of my clients that choose not to get a supplement or a Medicare Advantage end up paying a great deal out of their pocket after a catastrophic illness. Then they wished that they had coverage.

If you can afford paying all out of pockets costs then I guess that is a different matter.


#5

I have seen a lot of Dr. Belk’s videos and he has made a lot of great points. You also received a lot of great advice on this board in regards to your question as well as to what to take into consideration.
I would also like to point out that if you and your husband are receiving social security and making under 250% of the Federal poverty level (FPL) then you would probably also qualify for financial assistance which can help with hospital deductible and co-insurance. Each state and hospital has their own policy as to what they take into consideration when applying charity care. You can normally find their guidelines on their website under financial assistance and/or charity care. You can also call the hospital and inquire.
Best of luck in your decision!
Cheryl Welch, MBA
Hudson Valley Medical Bill Advocates


#6

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