Primary Medicare Beneficiary

[Justin Bilyj]

Hello everyone, I am hoping to get an opinion on this. I called up a small biz owner, 4 employees, 2 of which are on medicare, he said medicare primary for them. They each pay 535.11, and I know of supplements that are far cheaper than that. Is it a big deal to switch them off the small group policy onto a supplement? Are there any risks to doing this? Everyone else is paying so much, I know I can save them quite a bit. Any tips, questions to ask them, would be greatly appreciated.
Thanks!

 

[jdeasy]

Hello everyone, I am hoping to get an opinion on this. I called up a small biz owner, 4 employees, 2 of which are on medicare, he said medicare primary for them. They each pay 535.11, and I know of supplements that are far cheaper than that. Is it a big deal to switch them off the small group policy onto a supplement? Are there any risks to doing this? Everyone else is paying so much, I know I can save them quite a bit. Any tips, questions to ask them, would be greatly appreciated.
Thanks!

What they are paying is most likely for family coverage including RX. Since Medicare doesn't have a family plan, you would have to factor the cost of the spouse as well if he/she is also on Medicare. If not, can the spouse stay in the company plan at a reduced cost if the worker leaves the plan.

In any even, there is usually only a one time enrollment period during the year when an employee can leave the group. The odds are that it is now, so, you probably be good on that.

 

[Dave020]

Isn't there a rule or law somewhere that prohibits employers from advising or encouraging employees to opt for Medicare instead of continuing the group plan? Thought I read that somewhere a few year ago.

 

[Frank Stastny]

Isn't there a rule or law somewhere that prohibits employers from advising or encouraging employees to opt for Medicare instead of continuing the group plan? Thought I read that somewhere a few year ago.

Not that I have ever seen. I have done this many times and sometimes at the employers suggestion.

There is little doubt that having a Med Supp is going to provide better coverage at a lower cost, usually. However, as JD said, he probably has a family plan. If his wife is not eligible for Medicare and is not also an employee of the company when he cancels his group plan that may leave her without insurance. This would not be a good thing.

I have encountered this many times in the past also.

Medicare will be primary unless the employer has 20 or more employees, then Medicare is secondary.

 

[DS4]

Isn't there a rule or law somewhere that prohibits employers from advising or encouraging employees to opt for Medicare instead of continuing the group plan? Thought I read that somewhere a few year ago.

Medicare Secondary Payer MSP applies to employers with 20 or more ee's. Under 20, Medicare is primary. 20 or over, group health plan is primary.

From CMS,
Group Health Plans (GHP)

An employer cannot offer, subsidize, or be involved in the arrangement of a Medicare supplement policy where the law makes Medicare the secondary payer. Even if the employer does not contribute to the premium, but merely collects it and forwards it to the appropriate individual's insurance company, the GHP policy is the primary payer to Medicare.

 

[Justin Bilyj]

Frank, would it be worth it to change a senior to one of the new supplement policies coming up this year (mutual of omaha in june) or put her on a plan D or C? Will rates be jumping anytime soon that anybody knows of, either due to the political health care debate or for any other reasons?
Thanks,

 

[Frank Stastny]

Frank, would it be worth it to change a senior to one of the new supplement policies coming up this year (mutual of omaha in june) or put her on a plan D or C? Will rates be jumping anytime soon that anybody knows of, either due to the political health care debate or for any other reasons?
Thanks,

As far as I know the rates have not yet been published for Plans M or N. The rates for the "new" Standardized plans that are in existence now that are only being changed slightly seem to be about the same as the "old" Standardized plans. If you write an "old" Standardized Plan D it is going to be almost exactly like the "new" one.

Personally I would not suggest a Plan C for her. It is not a plan that I either recommend or sell. Plan D is my first choice followed by Plan G if a D is not offered by the company. I don't believe that MOO offers a Plan D, at not at least in the states I have looked at.

No one really knows when rates are going to up, especially the agent. We are usually one of the last ones to know. In some instances I learned it from a client before I have been notified by the company.

 

[DS4]

Is it a big deal to switch them off the small group policy onto a supplement? Are there any risks to doing this? .

In the above scenario, generally speaking, moving someone to a Med Supp, decreases their monthly premium cost and increases their coverage. Are you also going to offer a Part D PDP? Where things get tricky is if the insured is a high user of Rx's. Most group health plans don't limit Rx coverage. A high user of Rx's might enter the coverage gap (donut hole) earlier in a calendar year on a PDP. Generally, the premium savings will finance the insured through the coverage gap. You need to make sure the insured understand this concept. Otherwise, when they enter the donut hole, having to pay all Rx costs, they will forget about the premium savings.

 

[Dave020]

Medicare Secondary Payer MSP applies to employers with 20 or more ee's. Under 20, Medicare is primary. 20 or over, group health plan is primary.

From CMS,
Group Health Plans (GHP)

An employer cannot offer, subsidize, or be involved in the arrangement of a Medicare supplement policy where the law makes Medicare the secondary payer. Even if the employer does not contribute to the premium, but merely collects it and forwards it to the appropriate individual's insurance company, the GHP policy is the primary payer to Medicare.

Thanks for the clarification.

 

[G.Gordon]

Good point, DS4. I've coached several through this process myself and the drug consumption (in $$$) is the key. Say group health is costing them $500/mo and a supplement can cost $100. That's $400 saved, but if that guy is chewing up $600/mo in drugs he'll hit the gap in 4.5 months and be on his own for the rest of the year. His group health plan most likely doesn't have a drug plan "gap" so in this example this guy will be better served with the guidance to "stay put".

On the other hand you have a guy like I just got off the phone with across the state. He's on his wife's plan, medicare is secondary, they have a $4000 deductible, he has knees he needs rebuilt, he takes ~$220/mo in drugs. It cost him ~$350/mo to be on his wife's plan. Take the premium and the deductible alone and even if her were chewing up $300-400/mo in drugs a switch would still be in his best interest.

As you can see... it is all a matter of fact finding and doing the math.