Let’s talk about Joe – he’s a 69 year old male in good health who rarely uses insurance outside of seeing his PCP.
Joe’s not crazy about the Part B Premium of over $200, so he’s looking into Medicare Advantage plans that offer a Part B Giveback.
Joe found two plans that offer givebacks and his current doctors are in network with both plans. One plan offers savings of $81 per month, the other plan offers $64 per month.
There is a third giveback plan that offers even more ($138 per month) but only one of Joe’s five doctors (not his PCP) are in network.
Plan #1 – HumanaChoice Giveback (PPO) offers $81 a month giveback. That’s $972 he can save in a year.
This plan has a $400 deductible that Joe has to cover if he’s not seeing his PCP, so the annual savings could drop as low as $572.
Other plan attributes are a co-pay for in-patient hospital of $395 per day for the first six days (1-6), then the plan covers additional days (7-90) at a $0 co-pay.
If Joe had to be admitted to a hospital and stayed 5 days, he’d be out of pocket for $1,975.
If Joe had to be admitted to a hospital, the odds are he got an ambulance ride too. The HumanaChoice Giveback PPO has an ambulance deductible of $325 per trip.
To help cover these extra costs, Joe can buy a hospital indemnity plan that pays $400 per day for 6 days to cover the in-patient hospital co-pay. Cost of a policy like this could be as low as $35.11 per month.
The hospital indemnity plan has a rider available to cover ambulance charges – max amount of coverage is $400, more than enough to cover the HumanaChoice Giveback plan’s ambulance deductible of $325, and the extra monthly cost is only $2.86 per month.
Total monthly cost for this hospital indemnity plan is now only $37.97 per month x 12 = $455.64 per year.
Joe is saving $972 per year on the giveback, but he’s spending $456 per year to cover the in-patient hospital and ambulance co-pay exposure, leaving Joe $516 annually – $43 per month extra cash.
Even if Joe had to cover the $400 deductible that leaves him an extra $116 per year – almost $10 per month extra cash in his pocket.
Joe is using the Part B giveback to help cover some of the other exposures of the Medicare Advantage plan, the in-patient hospital co-pays and the ambulance co-pay.
Seems like a no-brainer to do exactly what Joe is doing.
I’ll cover the other two giveback plans in separate posts.
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