COLUMN: Move to Oregon can benefit those relying on Medicare

Moving to Oregon from the Midwest, the couple found more than the welcoming family, beautiful scenery and warmer winters that attracted them here. They got help with a matter that was worrying them.

Their retirement budget was being pinched by high-priced Medicare supplement (Medigap) insurance policies in which they had enrolled years before. They took a family member’s advice to meet with a Senior Health Insurance Benefits Assistance (SHIBA) volunteer counselor to see what they could do.

The couple each had a Medigap Plan F policy. The counselor told them that most policyholders are better off with Plan G, which costs less even after factoring in the requirement to pay the Medicare Part B deductible $226 this year.

Changing Medigap policies from Plan F to Plan G would save them several hundred dollars a year.

“But,” the wife protested, “if we change we’ll have to pay more because we’re not exactly in great health.”

Here’s where the move to Oregon offered an advantage they had not expected. The state’s Medigap birthday rule permits a policyholder to change policy type or to change insurance company with no questions asked about health status. (Oregon is among a handful of states with such a rule.)

Although the couple would have to wait until their birthdays to make the change, it appeared that they would benefit financially both by moving to Medigap Plan G and by changing insurance companies.

If you would like to make a SHIBA appointment, or to ask a question to be answered here, please see the end of this column.

Q: In a prior column, you referred to Medigap as supplemental insurance. I thought all Medicare insurance supplemented Medicare.

That is a common belief, with many people referring to all Medicare insurance as supplements. The two types of Medicare insurance – Medigap and Medicare Advantage – work very differently, however.

Medigap insurance, known formally as Medicare supplement insurance, does indeed supplement what Medicare pays. Your doctor or hospital first bills Medicare, which pays its share if it covers that medical service. Then Medicare bills your Medigap insurance company. Most Medigap policy types pay the balance of medical bills beyond what Medicare pays (that is, pays all medical bills after the insured pays the Medicare Part B deductible, which is $226 this year).

Medicare Advantageinsurance replaces Medicare, although the Medicare beneficiary retains all rights under Medicare. This insurance coverage must be at least as good as that under Medicare.

To be competitive, all plans available in Marion and Polk counties are better than straight Medicare – including those plans that charge no monthly premium. If a Medicare beneficiary has this type of insurance, Medicare receives no bills for medical services; as a result, Medicare subsidizes the insured’s premium by more than $800 a month.

With Medigap insurance, one is restricted to doctors who will bill Medicare. With many Medicare Advantage plans, one must see doctors who are in network with that insurance (that is, the doctor and insurance company have a contract).

Jim Sellers of Salem is a certified Medicare counselor with the Senior Health Insurance Benefits Assistance (SHIBA) program. To ask a question to be answered in this column, e-mail [email protected]. To schedule a free SHIBA phone, Zoom or in-person appointment with a volunteer Medicare counselor, call 800-722-4134.