Anyone and everyone who has gone through the Medicare enrollment process knows how confusing it can be. Whether you are just turning 65, or retiring and joining Medicare for the first time, there are several decisions you are faced with regarding your health insurance. After you’ve enrolled in Original Medicare (Part A & Part B), most people decide to obtain some sort of additional insurance to supplement the coverage provided in Parts A & B. Without supplemental insurance, you are subject to various deductibles, copays, and coinsurance costs, some of which can be quite expensive.
There are two very different ways to get this coverage. The first option is to enroll in a Medigap plan, also referred to as Medicare Supplement. Medigap plans are standardized health insurance policies that are designed to fill the “gaps” that lie in Original Medicare. They help cover out of pocket costs associated with deductibles, copays, and coinsurance. You have the freedom of choice with a Medigap plan, allowing you to receive care at any provider in the country that accepts Medicare. The second option is to enroll in a Medicare Advantage plan. Medicare Advantage, or “MAPD” plans work very differently than Medigap plans. These plans replace the benefits of Original Medicare and in most cases include prescription drug coverage. Medicare Advantage plans are lower in premium than that of Medigap, but restrict you to a network of providers, typically in a PPO or HMO arrangement.
There are a variety of factors to consider when thinking about your Medicare options. Health status, financial situation, where you live, where you may be living in the future, the list goes on and on. You want to think about where you are today, but also factor in how your Medicare choices will affect you later in life. It’s important to think about your “lifetime on Medicare”, and how it plays in to your overall retirement plan. Do you have long term care insurance? Do you take expensive medications? Have you budgeted for unexpected healthcare costs as you get older? Have you worked with you financial advisors to project your out of pocket healthcare expenses during retirement?
The best way to ensure you are making the right choices is to do your own research, work with an advisor your trust, and ultimately make your own decision. I always tell my clients that the best insurance plan for you is the one that will help you sleep best at night. If you need help determining the right coverage for you, feel free to contact us. We're here to help!