|
Jeff Chivers
Medicare? ME??? A few more insights . . .
In my October 22 post of last year, I covered some of the general ins and outs of Medicare. Below is my promised follow-up with a few specifics I consider crucial as we approach the threshold of “aging-in” to Medicare over the next 6-18 months.
As indicated in my earlier post, years of client experience has taught me how vital it is to be educated and to have a Medicare strategy before enrollment in order to avoid costly mistakes that can affect your health choices and pocketbook for the rest of your life.
As a reminder, there are variables that may determine when each person should enroll in Medicare (and/or its varied parts) for the first time. If you have elected to receive early Social Security benefits, you will be automatically enrolled in Medicare parts A & B. If you are not receiving Social Security, you will need to enroll in Medicare by contacting Social Security either online or by contacting your local Social Security office. There are some exceptions to this timing (i.e. your have previously qualified for Social Security Disability or you or your spouse are still working and you are on an employer health plan). If you are covered by an Affordable Care Act (Obamacare) plan, you have no choice but to discontinue your coverage in that plan and enroll in Medicare the month you turn 65. Contact me and I’ll be happy to discuss these and/or other exceptions that may apply to your individual situation.
Your Medicare Initial Enrollment Period (IEP) begins three months before the month you turn 65 and continues for seven months, ending three months following your birthday month. If you enroll before your birthday month, coverage will generally begin on the first day of your birthday month. If you fail to sign up during this seven-month window, you can still sign up between January 1 and March 31 each year thereafter (with coverage beginning on July 1), but you will likely be required to pay significantly higher premiums from then on as a late enrollment penalty. A word to the wise – enroll early.
Once you have enrolled in Medicare, you have three options for coverage:
- Remain on solely on traditional Medicare parts A & B, with the addition of enrollment in a mandatory Part D drug plan. Medicare coverage has deductibles and co-pays that are for the most part tolerable, but most people move away from this option as soon as they realize that by being on straight Medicare they are exposed to an unlimited co-pay of 20% on their Part B expenses which includes doctor charges / outpatient care / durable medical equipment etc. Imagine a $1 million transplant surgery where your surgical team fees are $500,000 . . . 20% of that amount . . . hmmm, you can do the math!!).
- Enroll in a Medicare Advantage Plan (also known as “Medicare Part C”) is a coverage approach wherein Medicare has contracted with a private insurance company (i.e. United Healthcare/AARP, Humana, Aetna etc.) to provide the same benefits offered by traditional Medicare; incorporating Medicare Parts A, B & D in a single plan; sometimes throwing in perks like a gym membership, and/or very basic vision, dental and hearing benefits. Medicare Advantage plans operate much the same as employer group plan coverage you may be used to; with enrollment periods, strict provider networks, co-pays for medical services (doctor and emergency room visits, hospital stays, surgeries etc.), plus deductibles and co-pays for prescription drug coverage. With no medical underwriting requirements and monthly plan premiums generally ranging from $0 - $50/month, participation in a Medicare Advantage Plan can be very cost-effective if you are, and remain healthy. With annual out-of-pocket plan maximums presently ranging from around $5,000-7,000+/year these plans can be very expensive indeed for those who have or develop a chronic condition requiring extensive ongoing medical care.
- The third coverage option is to remain on traditional Medicare (option 1 above) in conjunction with enrolling in a Medicare Supplement Plan (also known as a “Medigap Plan”) plus a separate Part D prescription drug plan. Also offered by private insurance companies, these plans work alongside traditional Medicare, covering a range of the co-pays and deductibles traditional Medicare doesn’t cover. There are several Medicare Supplement plan coverage options, each with differing premium costs covering a different range of benefits. The most extensive coverage is with a Medicare Supplement Plan “F” which covers 100% of medical costs not covered by traditional Medicare; costs which would have otherwise come out of your pocket with Medicare coverage alone. All Medicare Supplement Plans have the benefit of having no networks; allowing participants to utilize any doctor, hospital or medical facility in the U.S. that accepts Medicare. Several Medicare Supplement Plan options also cover medical costs that may be incurred while traveling outside the U.S. up to a $50,000 lifetime limit. Medicare Supplement Plan premiums vary by plan type and the insurance company offering the plan, with the top-of-line Plan “F” premiums ranging from around $115-$150/month for age 65 enrollees. Thereafter premiums increase incrementally by a small percentage each year as you get older. Those desiring to enroll in a Medicare Supplement Plan are subject to medical underwriting except during the six months following a person enrolling in Medicare Part B, during which time enrollees have “Guaranteed Issue” status regardless of their health or pre-existing health conditions. If you don’t enroll in a Medicare Supplement Plan during this narrow “Medigap Open Enrollment” window and later want to enroll after having developed some sort of excluded health condition, you will be unable to do so. Once enrolled on a Medicare Supplement Plan you can switch your coverage to a Medicare Advantage Plan during the Medicare “Annual Enrollment Period.” However, if you then decide to switch back to a Medicare Supplement plan there are restrictions in doing so including (in most cases) the requirement of passing medical underwriting.
In summary, there’s not one approach to Medicare coverage that is ideal for everyone, but as I indicated, your choices over the coming months will have lasting impact on your healthcare choices and costs for the remainder of your life.
As you approach your 65th birthday you’re going to be bombarded from all sides from those trying to sway you in one direction or another with respect to your Medicare coverage decision. I highly recommend you work with a Medicare coverage professional in evaluating your own unique situation in determining the coverage appropriate for you; taking into consideration your present health, genetic and family health predispositions, your lifestyle and healthcare budget in making this important decision. It’s vital that whomever you decide to work with is knowledgeable, has available a range of coverage options, and foremost, is someone you know you can trust. Sadly there are agents out there with limited Medicare knowledge or with the primary motive of pushing products to maximize their commissions rather than looking out for the client’s best interest.
I’ll chime in again later with a few more tips regarding choosing the plan that’s best for you among those available in each of the above categories, including prescription drug coverage. In the meantime, let me know if you have questions or if I can assist you in this important process.
Jeff Chivers
801-712-8448
jfchivers@hotmail.com
|
