Are dental, vision, hearing and gym benefits included in my plan?

By March 1, 2019 Personal Insurance

As a brokerage agency selling Medicare insurance plans we are often asked by our current or prospective clients if their coverage comes with added benefits. The answer is, it depends on the coverage. Please read on for a detailed explanation.

There are two ways to get Medicare coverage and they are very different from one another. The first way it structure Medicare coverage is keeping traditional Medicare as primary insurance. When choosing this route, most people will add a supplement plan (Letters A-N) and a separate prescription drug plan. The other type of coverage is called a Medicare Advantage plan. When choosing this coverage, you elect to replace Medicare with private insurance which is sold and administered by a private insurance company. They are sometimes referred to as “Medicare Replacement plans.”
As agents selling plans, we go over the different coverage in detail with each prospective client prior to signing them up for a plan. Our goal is to explain the differences in the coverage clearly enough for each person to choose the coverage they are most comfortable with. We find when people truly understand the differences in Medicare as primary vs. a Medicare Advantage plan, 95% of them will stay away from Advantage plans because of the restrictive networks and high co-pays embedded in the plans. That said, a sticking point is often extra benefits because supplement plans generally do not include dental, vision and gym memberships. If they do, the costs are typically factored into the premiums. (more on that later) Many Medicare Advantage plans offer these benefits and love to advertise these benefits as a means of attracting new members.
When speaking to a friend or neighbor on Medicare, perhaps they might mention that they have some of these extra benefits included in their plan. Odds are very good they have a Medicare Advantage plan.If they have a supplement with a gym membership that will soon be a thing of the past.
If Medicare Advantage plans offer extra benefits, isn’t that better? To gain a better understanding of this, I find it helps to know how the money flows. When a person enrolls in a Medicare Advantage plan, the federal government turns on a subsidy to the insurance company, roughly $1000/month. In exchange for the subsidy, all claims go directly to the insurance company who is responsible for paying them as the primary insurer. The insured has a share in paying claims in the form of co-pays and co-insurance.(cost sharing) This cost sharing varies from plan to plan and depends on if you pay additional premium to the insurance company and if the insured is also paying a premium. It’s possible to have a $0 premium Medicare Advantage plan because of the subsidy received by the government. The insurance company, being a for profit company, needs to figure out how to generate a profit based on the money they are receiving, administrative costs of the plan, and expected claims. Really smart folks called actuaries are tasked with figuring this out and consequently help decide the benefits of the plans. Any additional benefits built in to the plan such as the ones mentioned above have a cost to the plan itself. They are not free to the plan and they are not free to the person covered by the plan.If the Advantage plan includes a decent dental plan, hearing benefit, vision benefit and a gym membership, that added cost to the consumer is roughly $80-90/month in benefits. Any added benefits will reduce other benefits of the plan. Nothing is free! Of course, the insurance companies market the benefits as if they are free. Of course we all know marketing can be um…misleading at times..
The additional cost of added benefits is further evidenced by the fact that area supplement carriers who have included gym memberships in the past are beginning to phase them out. For example, a popular regional company recently sent their members a letter offering that they can keep their gym membership if they are willing to fork out an additional $34/month. (the true cost of the benefit) Another company has recently indicated that they will discontinue their gym benefit in the near future. These companies had been charging more for their plans then the smaller less known companies. They have now found that most people are unwilling to pay more for the plan and they had to ax it to remain competitive. Again, this is just further evidence that nothing is free. If it’s included in the plan, the insured will be paying for it one way or another.
Attend one of our Free Educational Seminars on Medicare.Learn more