I encourage you to thoughtfully listen to the replay that features Medicare expert Melinda Caughill and read the takeaways listed below, especially if you or a client are about to choose a Medicare plan.
On the Replay: Melinda started with a primer on Medicare, to include a keen focus on the timing of when people should enroll in Medicare and the type of coverage they should consider. She offered several examples of how clients have saved thousands of dollars by making smart choices on their Medicare coverage. As always, I encourage you to listen to the Q&A that starts at the 42:50 mark in the replay.
Tom's Tips: For many, the choice of Medicare coverage comes down to choosing between Original Medicare + MediGap (a.k.a. "Supplement") or a Medicare Advantage. While a growing number of people are signing up for the Medicare Advantage plan, due in part to the lower monthly premiums, there are other important considerations:
- The co-pays, coinsurance and out-of-pocket expenses with Advantage plans can add up.
- The insurance company, not the doctors, decide what's covered.
- 4 out of every 5 Medicare Advantage enrollees have to receive prior authorization for any higher cost service.
- While the extra benefits (e.g. dental and vision) sound enticing, the amount covered can be very low.
- You may be subject to medical underwriting if you want to switch to a MediGap after age 65.
With MediGap plans, named because they generally cover the "gap" in costs between original Medicare and Part B (see below), you will have a higher monthly premium but it's essentially the opposite of Advantage plans when it comes to:
- Your out-of-pocket expense with a MediGap policy is more limited.
- The doctors are in charge of your care, not the insurance company.
- You do not have to receive prior authorization or worry about being "in-network."
- You can switch to an Advantage plan with no medical underwriting required.
Perhaps most important is if you are turning 65, you do not have to pass medical underwriting to enroll in a MediGap plan. This "Guaranteed Issue" right is one that won't be available if you choose to initially enroll in a Medicare Advantage plan then want to switch to a MediGap plan at a later age. In that case, you'd have to pass medical underwriting before you can do so.
Already on Medicare? You owe it to yourself to review your plan annually to ensure the coverage and costs are competitive.
Key takeaways include:
- There are 3 Parts to Medicare
- Part A: Hospital Insurance
- Part B: Medical Insurance
- Part D: Prescription Drug Coverage
- Be mindful of the age 65 deadline for Medicare enrollment. Re: There may be penalties if you do not enroll in Part B and Part D
- BUT do not automatically enroll if you have coverage from a large employer, military or former employer.
- If you are collecting Social Security benefits, you must enroll in Medicare Part A.
- The type of coverage you choose will be one of the following:
- Original Medicare with a Medigap
- Medicare Advantage
- Retiree coverage
- Military coverage
- Medicare Advantage is growing in popularity BUT it may not be the best choice. While the monthly premiums may be low, you have to cover a lot more, compared to MediGap plans, in the form of copays, coinsurance and out-of-pocket expenses.
- MediGap Policies
- Your monthly premium or rate will increase, based on the rating of the policy. ASK for the history of the rate increase you are considering and be sure to ask for a quote on all MediGap policies available to you.
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