Employer-Sponsored Medicare Supplement Question

[Cobra9777]

DW turns 65 in July. Currently she has subsidized pre-Medicare group insurance through her former employer. The subsidy is $200/mo. The coverage is good and reasonably priced. She gets the same subsidy after 65 as long as she stays with the employer's Medicare supplement plan. However, they only offer one plan. The unsubsidized cost is $509/mo. So her subsidized cost would be $309/mo. That's medical plus a prescription plan.

The medical plan seems to cover everything, including the Part B deductible, all copays, and excess charges. Essentially, zero out-of-pocket except the premium. The prescription plan has no deductible, an extensive formulary, and very low copays for tiers 1 and 2.

I asked what Medigap plan letter this was. They said it's not Medigap, but it's "like Plan F." Evidently, as a private, employer-sponsored group plan, they can offer whatever they want. It's nice to have that level of coverage available. But even the subsidized price seems really high for the incremental benefits vs G or N.

I turn 65 next year. I'm planning to go with AARP/UHC Plan N, along with Wellcare Value Script. Total premium for me is $120/mo. DW would be $106. Plus we would each get 20% multi-insured household discount. BUT... for her, we would forever give up access to the "Plan F-like" coverage, along with the $200/mo subsidy.

What would you do in this scenario?

 

[MichaelB]

The employer Medicare plan may cover things traditional Medicare plus supplement don’t, such as a yearly physical. Medicare is pretty comprehensive, so my guess is the real difference (and benefit) is in the pharmaceutical coverage.

One risk to the employer plan option is it can be withdrawn and not replaced. If that happens and you have guaranteed issue for a MediGap plan, the risk is basically covered, although the premium may be age based and therefore more expensive.

I think that losing access to a group plan or coverage is one condition that makes you eligible to enroll in MediGap after the initial enrollment period ends. If that is the case the employer plan sounds nice. This needs to be confirmed, however.

There have been a couple of threads lately discussing pharmaceuticals either not covered or in high tier pricing levels. The costs are eye-watering.

 

[savory]

One key thing for us when shopping for plans was some type of global travel coverage. That would be a yes/no check box for me.

Another would be the need for underwriting if DW elects to move from her private employer plan to a traditional plan in the future. Will she be required to go through underwriting? If so, it would be another consideration. We just did that and were accepted back to a traditional Medicare policy. Like you, we signed up for plan N for 2025. It is the same suppliers that you shared in your post.

As for the finances, I do not see any bargain staying with the private employer plan. What you have not shared is the cost of a G plan for DW on traditional Medicare. Our choice for G was about $300 for medical and drug if memory is serving. And, we could have selected a slightly less expensive G plan if we did not want the physical fitness benefits which for us was a cost saving vs the independent gym membership.

As I see it, the $200 per month for plan N ($309 vs $106) would be a substantial savings. If you are concerned with future expenses, save that in a personal medical fund for unforeseen future costs or to have it if you want to move to a plan G or F where premiums are higher.

To answer the 'what would I do', DW and I are all in on plan N in your example

 

[Cobra9777]

The employer Medicare plan may cover things traditional Medicare plus supplement don’t, such as a yearly physical. Medicare is pretty comprehensive, so my guess is the real difference (and benefit) is in the pharmaceutical coverage...

We just spoke to the company that manages the plan for DW's former employer. We went line-by-line through all the benefits. We asked lots of questions trying to figure out what unique benefits might be there to justify the high cost. Nothing. It's really just a run-of-the-mill Plan F.... same as G, but covers the Part B deductible. DW could get the AARP/UHC Plan G for $146/mo. At $309/mo, her company plan would be $2K more per year, with the only benefit being the $257 Part B deductible.

The Rx plan has no deductible. Wellcare is $590 for tiers 3 and up. That might generate some benefit in the future (our current drugs are all tier 1). But aside from that, there's nothing special about the formulary that we can find. We compared a long list of common drugs and they all fell into the same tiers in both plans. And oddly, low-tier copays are actually higher than Wellcare for our existing drugs, which is a head-scratcher.

 

[Cobra9777]

...As for the finances, I do not see any bargain staying with the private employer plan...

Agreed. I have no idea why the cost is so high. Maybe it's just a really small group. But DW is very uneasy about walking away from such comprehensive coverage plus the $200/mo subsidy. She has former coworker friends telling her the coverage is amazing. They have no facts... just anecdotal stories of a trip to the emergency room that cost "nothing."

 

[Texas Proud]

I would be leery on it being a medigap plan... it sounds like an advantage plan that covers a lot...

If it is an advantage plan then you cannot go to a medigap plan without underwriting...

Now, if you like the plan and the company is such that you do not think it would go under and lose your insurance then go for it... my oldest sister has an advantage plan with the state of Texas and it is pretty good... not as good as what you say though....

 

[MichaelB]

Another possibility is the employer plan is not subject to

We just spoke to the company that manages the plan for DW's former employer. We went line-by-line through all the benefits. We asked lots of questions trying to figure out what unique benefits might be there to justify the high cost. Nothing. It's really just a run-of-the-mill Plan F.... same as G, but covers the Part B deductible. DW could get the AARP/UHC Plan G for $146/mo. At $309/mo, her company plan would be $2K more per year, with the only benefit being the $257 Part B deductible.

The Rx plan has no deductible. Wellcare is $590 for tiers 3 and up. That might generate some benefit in the future (our current drugs are all tier 1). But aside from that, there's nothing special about the formulary that we can find. We compared a long list of common drugs and they all fell into the same tiers in both plans. And oddly, low-tier copays are actually higher than Wellcare for our existing drugs, which is a head-scratcher.

It is confusing. Is this a traditional Medicare plan plus a MediGap-like supplement with a subsidy, or is it a completely private plan?

 

[Cobra9777]

I would be leery on it being a medigap plan... it sounds like an advantage plan that covers a lot...

It is confusing. Is this a traditional Medicare plan plus a MediGap-like supplement with a subsidy, or is it a completely private plan?

They told us it is NOT a Part C Advantage plan. It is Medigap-like medical and drug coverage that supplements original Medicare. BUT, it is a private group plan, with custom coverage that does not conform to any standard Medigap letter plans. They told us it was "like" Plan F. Though no one could clarify what the actual differences were vs Plan F (if any).

The $200/mo subsidy DW receives is a retiree benefit based on years of service. As a spouse, I would pay the full $509/mo premium if I chose to use this plan. BTW, this is a small employer. We were told the population of 65+ retirees is ~250. I'm guessing that explains the high price, since I can't find any unique benefits.

 

[PaunchyPirate]

My mother has a similar plan from her teachers’ pension group here in Pennsylvania. It functions just like a Medicare Supplement, but does not have a Letter designation. It is not an Advantage Plan either.

 

[rk911]

The future is unknowable and for that reason alone I'd stay with the 'Plan F Look-Alike' as long as possible.

 

[Mark1]

What would you do in this scenario?

Me? I would probably just stay on company plan for two reason.:

1) rk11 point above.
2) Your earlier comment. "She has former coworker friends telling her the coverage is amazing." I'm sure your rigorous analysis is far superior to their opinions/perceptions, but remember she will likely have these friends for a long time into the future and they will likely get her all stressed out from time to time when they tell DW, "OMG, that's right, you dropped the company plan!!".


Full Disclosure:
DW is currently on our former employer supplemental plan and I will move onto it next year when I turn 65. In our case, the company pays 60% of the cost and we pay 40% of the cost (usually only 20%, but I FIRED before I got the maximum company subsidy).

Is it a good plan compared to other plans? I have no idea.
What type of plan is closest to, F, G, N, etc. I have no idea.
What exactly does it cover. I have no idea.

Would I like to understand the answers to the 3 questions above? Absolutely (assuming it is even possible).
One of the largest advertiser here on the Western Slope is the "Medicare Evaluation" lady. I figure, someone has to pay for all those commercials and billboards, so I'm assuming if I were to get the answers to my questions above, I would have to go it alone.

So far I have never heard of a former MegaCorp retiree that wasn't happy with the coverage, although, I must admit I have heard numerous times from other people comments like, "OMG, your company plan is an Advantage Plan!!!".

 

[MichaelB]

They told us it is NOT a Part C Advantage plan. It is Medigap-like medical and drug coverage that supplements original Medicare. BUT, it is a private group plan, with custom coverage that does not conform to any standard Medigap letter plans. They told us it was "like" Plan F. Though no one could clarify what the actual differences were vs Plan F (if any).

The $200/mo subsidy DW receives is a retiree benefit based on years of service. As a spouse, I would pay the full $509/mo premium if I chose to use this plan. BTW, this is a small employer. We were told the population of 65+ retirees is ~250. I'm guessing that explains the high price, since I can't find any unique benefits.

One of the things people like the most about the MediGap plans is the insurer does not determine if something is covered, that is determined by Medicare. When Medicare covers a procedure the MediGap insurer has to pay its share.

If your DW’s policy is not MediGap, does this mean the insurer carries out its own its own process to determine if a claim should be paid?

This is an interesting situation. There doesn’t seem to be any compelling reason to go with the employer option.