Choosing Between Traditional Medicare and the ExxonMobil Medicare Primary Option (MPO)

You’re an ExxonMobil retiree and about to turn 65. You need to decide about health insurance. You can move seamlessly from the ExxonMobil Retiree Medical Plan option for pre-65 retirees to the ExxonMobil Medicare Primary Option (MPO), also known as a Medicare Advantage plan. Or you can opt out of the MPO and go into traditional Medicare.

How should you make the decision? What are the differences or key variables you should consider?

Every decision has consequences. And health care matters are among the most personal decisions we must make.

A host of variables can influence your choice:

• Affordability of the options—premiums as well as potential exposure (out of pocket maximum)
• Ability to choose providers
• Comfort level with current providers and whether they’ll take your insurance
• Your health status
• Anticipated healthcare needs as you age
• Perceived “cost” of making a wrong decision
• Ability to make changes in the future

As you consider your choices, think through what’s important to you today and whether those factors will change as you age.

Medicare can be complicated. The experience of friends or family may be of interest, but we recommend contacting an experienced insurance agent who specializes in Medicare to help assess on an individual basis which alternative might be more suitable for your needs and preferences.

That said, take what follows as foundational material for you to consider as you think about the alternatives you have.

High-level comparison

At a high level, Medicare hospital and outpatient benefits are provided through one of two main approaches. Traditional Medicare is akin to traditional health insurance—you choose your providers and pay your premiums, your deductibles, and your coinsurance. You can limit your financial exposure under traditional Medicare by purchasing supplemental insurance called “Medigap” or Medicare Supplemental coverage. Several different standardized Medigap plans are available in each zip code, with different costs and coverages, identified by letters (e.g., Plan G or Plan N).

The alternative to traditional Medicare is a Medicare Advantage plan, akin to HMOs (or Health Maintenance Organizations), where you’re encouraged (or in some cases, restricted) to use a network of providers.

The first alternative (Traditional Medicare) emphasizes choice; the second alternative (Medicare Advantage) is often less expensive, especially if you stay healthy. Traditional Medicare is a government program, administered by the Centers for Medicare and Medicaid Services (CMS). Medicare Advantage plans are private programs under contract to CMS and receive fees from the government for providing Medicare services to their members.

Another aspect of Medicare is prescription drug coverage. Those in traditional Medicare will need a Part D prescription drug plan, purchased from an insurance company. Drug coverage for those in Medicare Advantage plans may be included as part of the Medicare Advantage plan benefits, or may need to be purchased separately.

Before going into more detail, note that the ExxonMobil MPO is a Medicare Advantage plan, with medical benefits administered by Aetna and drug benefits provided through a Medicare Prescription Drug plan run by Express Scripts. Members can see any provider eligible to receive Medicare payments who is willing to bill Aetna and accept the benefits of the plan.

Some changes are coming to the MPO beginning in 2024. Details of the new program can be found here (on ExxonMobilFamily.com) and here (on the Aetna website). (These links may not be available after Open Enrollment ends on November 10, 2023.)

Details about Medicare, including additional comparisons between traditional Medicare and Medicare Advantage plans, can be found on the Medicare website. A particularly useful document is Medicare & You 2024.

Some key differences between Traditional Medicare and the ExxonMobil MPO are summarized below:

TOPIC / ISSUE	TRADITIONAL MEDICARE	MPO – MEDICARE ADVANTAGE PLAN
Basic distinction from our perspective	May cost you more in premiums than being in the MPO, but you have greater flexibility to choose providers. Your maximum out-of-pocket expenses may be lower than in the MPO if you incur serious medical conditions and have a Medigap plan. You will need to select a Medigap plan and a Part D prescription drug plan in addition, so there is a level of complexity you could otherwise avoid by enrolling in the MPO.	Plan design and cost impacted by ExxonMobil. Plan offers some benefits not available in Traditional Medicare but not all providers who accept Medicare patients will necessarily accept MPO members. If you stay healthy and are happy with providers who are in the Aetna network or agree to accept Aetna benefits, you may save money under the MPO. Having only one primary plan may be a desired convenience.
What plans do I need if I opt for one or the other?	Medicare Part A – hospital coverage & Medicare Part B – doctor and outpatient services (generally available to all) Medicare Part D – prescription drug coverage (optional, but highly recommended) Medigap plan – supplemental coverage to take care of additional non-reimbursed expenses (highly recommended)	You’ll need to pay your Part B premium and the MPO monthly premium. You’ll get your benefits from two plans (the MPO and the Express Scripts Part D prescription drug plan). Together, they provide all the coverage of Part A and Part B and Part D, and two stop loss limits on your out-of-pocket expenses. If you’re in the MPO, you’re not eligible to purchase Medigap supplemental insurance or a different Part D prescription drug plan.
Can I switch if I don’t like the plan(s) I’ve chosen?	You have a six-month window when you’re first eligible for Medicare to buy a Medigap plan without evidence of insurability; you may have difficulty later switching Medigap plans; you can switch from Traditional Medicare to Medicare Advantage plans at least once a year (but note that if you don’t enroll in the MPO when first eligible, you won’t be able to enroll in it later).	If you opt out of the MPO, you can never get back in; you can enroll in another Medicare Advantage plan if you opt out of Traditional Medicare or another MA plan, but it won’t be the MPO; you can switch from a Medicare Advantage plan to Traditional Medicare during certain times of the year, but enrolling in a Medigap plan outside of your “open enrollment period” (the six months from when you are first eligible for Part B) could prove difficult or impossible should certain pre-existing conditions arise.
What does it cost just to be covered?	Part B premium of at least $174.70/month/person in 2024—more depending on your income as Medicare does a two-year lookback to your Modified Adjusted Gross Income.   Have to meet an annual deductible for Part B services of $240 before Medicare Part B kicks in. Premiums for Part D prescription drug plans average around $35/month/person. Medigap plans vary widely in cost, based on the plan letter purchased, your zip code, age of the insurance and smoker or non-smoker status. Average premiums for one of the more popular Medigap plans are around $150/month/person at age 65.	Part B premium of at least $174.70/month/person—more depending on your income two years prior. MPO premium for 2024 is $74/month/person; have to meet an annual individual medical deductible of $100 and a prescription drug plan deductible of $300 before plan pays its share of covered services. Thereafter, you have co-pays or co-insurance up to an annual out-of-pocket maximum of $4,000/person for medical/hospital services and $2,000 for prescription drugs.
What might my annual cost be in 2024 if I actually incur medical expenses?	Part B premium: $2,096 Part D Premium: $420 Medigap Plan premium: $1,800 Part B annual deductible: $240 Part D annual deductible: $545 Average annual cost: $5,101 plus Rx co-pays	Part B premium: $2,096 MPO premium: $880 MPO annual deductible: $100 Drug plan annual deductible: $300 Out-of-pocket Rx maximum: $2,000 Out-of-pocket medical maximum: $4,000 Average annual cost: $3,376 plus medical and Rx co-pays/co-insurance up to $6,000

What’s the bottom line?

If you value the ability to go to any provider who accepts Medicare and not have to worry about whether he or she is in the Aetna network or is willing to accept payment from Aetna, traditional Medicare may be a better option for you, especially if you’re willing to pay higher premiums than the basic cost for the ExxonMobil MPO.

If you trust ExxonMobil to look after its retirees and you like the convenience of using plans that are administered by Aetna and Express Scripts, and your medical providers are in the Aetna network, the MPO may be the right plan for you.

Determining which alternative will ultimately cost less is very dependent on your health experience going forward and the choices you make for prescription drugs and Medigap coverage if you opt for traditional Medicare. Your best bet for keeping your health care budget low is to take care of your own health.

And with all the caveats about past experience not being predictive of future performance, we’d also suggest you talk with friends who have opted for either choice and ask them whether they’d make the same choice if they had it to do over again. Recognize that their health needs are likely different from yours, but as users of a plan, their experience can be helpful input for you.