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Extra Help and Changing Your Medicare Advantage Plan: 5 Things to Consider
Medicare is a wonderful benefit. While Medicare is the federal retirement benefit with the most value, there are still many who cannot subsist, due to healthcare costs. The problem is that approximately 50% of Americans over 65 have an annual income of $24,224, and the median pension ranges from $9,262 to $22,172 (according to MedAlertHelp.org). But there is help – Extra Help.
The Extra Help You Need
Extra Help, also known as LIS (Low Income Subsidy) is designed to help Medicare beneficiaries lower their prescription drug costs, which can often be the most expensive part of one’s health care. It does so in several ways.
- It eliminates paying your Part-D plan premium. What this means is, if you have a Medicare Advantage plan with Part D (MAPD), and it has a premium (over the $148.50 for 2021 that Medicare deducts from your social security check), Medicare will pay it for you. The same applies for a standalone Part-D plan.
- It lowers your prescription copays. Extra Help lowers your generic prescription copay to either $1.30 or $3.70, and your brand name prescriptions to either $4.00 or $9.20, depending on the level for which you qualified.
- Provides up to $5,000 to avoid falling into the DONUT HOLE. The Coverage Gap (affectionately known as the Donut Hole) ends your prescription coverage once $4,130 has been spent on your prescriptions by you and your insurance company combined. Once that happens, you are liable for the next $2,420 is paid out-of-pocket by you, no coverage is provided. Once a combined $6,530 has been spent, catastrophic coverage kicks in until the new year. Extra Help prevents this from happening, saving you greatly.
SEPs and Extra Help
When you qualify for Extra Help, this triggers an SEP (Special Election Period). What this means is you can change your current plan if you wish. Extra Help qualification also allows you to change your plan quarterly, January through September. In the final quarter (from October 15th to December 7th), all Medicare beneficiaries are eligible for AEP (Annual Election Period), so there is no SEP for Extra Help beneficiaries.
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Just Because I Can, Should I?
When you qualify for Extra Help and an SEP is made available, many insurance agents are notified and will contact you to see if you wish to change your plan. Now, to be kind, some of those agents may be a bit motivated to get you to change your plan, because it’s how we agents earn a living. Understandable. But it doesn’t mean you SHOULD change.
So, why should you change and why shouldn’t you change? Let’s take a look at those reasons.
Reasons NOT to Change
- You Have A Good Agent. While all agents may have the best intentions, not all agents are equal. Finding a good agent who is knowledgeable of Medicare, insurance and extra resources that can help you, AND knows you and your needs, AND who cares about you is extremely valuable. So, if you have one, do not let him or her go. He or she can help you make a change that is in your best interest. When in doubt, tell the other agent you wish to discuss this with your current agent.
- You Already Have a Good Plan. Just because you CAN change, doesn’t mean you must. A smart move is to contact your current agent and ask him or her to see if there’s anything else available that would fit your needs (your doctor and specialists are in network, and your precise medications are covered) that would offer additional savings or benefits? If there is, he or she will know.
- You Had a Misunderstanding. Some beneficiaries will have a conversation with a friend, family member or another insurance agent, who NOT knowing what you have will make a comment that makes you doubt your coverage or agent. If that happens, give your agent a call! Often, what you will find is that someone is speaking with no knowledge of your specific plan (and needs), or another agent trying to make a sale.
In all three cases, give your agent the benefit of the doubt. Call him or her and ask questions, share your concern and get answers. Many times you will find you have a certain plan for one specific reason, based on your unique need. Changing that plan will leave you exposed in one area and is not worth whatever small savings the change would bring.
Reasons to Change
- There’s Another Plan Which is Truly Better for You and Your Agent Has Nothing Comparable to Offer. This is truly the only reason to change your agent. If your agent’s portfolio of plans and services cannot meet your needs anymore, then it’s time to change. But, I repeat, when in doubt call your agent first and allow him or her the chance to see if they can meet your need.
- When You Qualify for Extra Help AND a Medicare Savings Program (Medicaid). When you apply for Extra Help, you can request your information also be sent to your state. If you qualify, they will provide you with a Medicare Savings Program that can pay for your Part-B premium, and possibly cover any deductibles, copays and coinsurance costs. When this happens, you must change plans to a Dual Eligible Special Needs Plan (D-SNP). However, your agent can help with this easily. So, call your agent.
A good practice to establish is a password for you and your agent. If any other person (other than your actual insurance company’s customer service department) contacts you, if he or she does not know the password, HANG UP! This will avoid confusion and regrets.
Many people aren’t aware they qualify for Extra Help. If you think you may but are not sure, contact us. We can see if you may qualify and help you apply. I always recommend that if you are in the ballpark, apply regardless. You may get denied, but I’ve seen some who I thought would not qualify be approved.
Finally, get with your agent at least once every 4 to 6 months. Find out if there have been any changes that may be advantageous for you. Also, were there any changes in YOUR life that may require doing another needs assessment to ensure your current plan is the right one? This will not only give you peace of mind, your agent will be happy he or she is able to provide you with the best service possible.
Finally, keep in mind we are insurance agents. There are other areas in your life that you may be overlooking, liking final expenses when your day comes that you should at least have the discussion with your agent. Be wise and prudent. Get answers then decide how to best proceed.
