Medicare members who are enrolled in Original Medicare purchase supplement insurance to pay the 20 percent Medicare does not pay, but few know about Medicare’s best kept secret that can save thousands of dollars in premium.
I refer to it as the Co-Pay Premium Reduction Option, which is seldom advertised. Monthly premiums at age 65 can start as low as $34. This option makes sense because Medicare Parts A and B pay first dollar coverage of about 80 percent of assigned amounts usually accepted by almost all who participate in Medicare regardless of what type of supplement insurance is purchased.
This means the other 20 percent due by the insured is usually a much lower amount that can be paid for with the significant premium savings that will be made available through a mutual agreement with a supplement insurance provider.
Here’s how it works. An insurance company agrees to charge a very low premium in exchange for the insured member’s promise to make all required co-payments until an annual maximum amount is reached. In 2016, the maximum is $2,180.
After that, the Medicare member is insured at 100 percent. Few Medicare members realize Medicare waives deductibles and co-pays for many preventive services, which makes the Co-Pay Premium Reduction strategy even more attractive.
The preventive services where co-pays and deductibles are waived include:
* Counseling to prevent tobacco use
* Depression screening, diabetes screening, diabetes training
* Glaucoma screening, hepatitis B Virus and Vaccine Administration
* Hepatitis C Virus screening, human immunodeficiency virus screening
* Influenza virus and vaccine administration
* Welcome to Medicare initial preventive physical examination
* Intensive behavioral therapy for cardiovascular disease
* Intensive behavioral therapy for obesity, lung cancer screening
* Medical nutrition therapy, pneumococcal vaccine and administration
* Prostate cancer screening, screening for sexually transmitted infections
* Screening for mammography, pap tests screening, pelvic and clinical breast exams
* Ultrasound screening for abdominal aortic aneurysm
A client couple age 72 saved more than $3,000 last year in premium by using the co-pay premium reduction plan I designed where they agreed to pay premiums of $38 per month for their supplement insurance coverage.
They only spent total out of pocket co-pays of $1,000 for 2015 and added a net savings of $2,000 to their money market fund.
Their monthly premiums only increased to $39 and $40 for 2016, with the same arrangement, and they will probably net another $2,000 in premium savings again this year.
Here’s a major reason this is possible. Their routine medical services and checkups only cost them about $25 out of pocket per doctor visit and no out of pocket for their preventive services like flu shots, and mammograms. Medicare pays 100 percent.
Mrs. Happy Client went for a mammogram just recently. The charges totaled $437 and she paid nothing not even the Part B deductible of $166 for 2016.
By the time this couple reaches age 75, they will already have saved more than $20,000 in premiums, and that number will continue to grow if they live well into their 80’s.
What’s even more amazing, they have catastrophic protection, skin in the game using premium savings sufficient to handle their co-pays and no deductibles to pay for preventive services.
The Take Charge Medicare Process we created six years ago to show how to avoid Medicare mistakes has already saved our clients more than one million dollars.
