If you have plans to travel once you’re retired you should give some careful consideration to which Medicare Plan will afford you the best coverage when you’re away from home. Choose the wrong plan and you may find yourself with inadequate coverage or a very limited amount of providers to choose from.
The best Medicare Plan for travel will be affordable, give you plenty of provider options and include the coverage that’s right for you. Whether your travel plans are domestic or international you should take a little time to think through any possible scenarios that may arise.
Choosing between Medigap and Medicare Advantage
Before you impulsively jump into a Medicare Plan because it has a low or $0 monthly premium you should understand how the plan works. And that’s true whether or not you plan to travel. With that in mind, let’s review how both a Medigap policy and a Medicare Advantage Plan work.
Medigap… aka Medicare Supplement
A Medigap Plan is insurance offered by a private insurance company to help pay for your share of Medicare-covered expenses. There are ten plans to choose from (plus a high deductible option for Plan F) unless you live in Massachusetts, Minnesota, or Wisconsin where you’ll have your own State-specific plan options. Not all insurance companies necessarily offer all plan options.
The more of your share of expenses a plan pays, the higher the cost. Medicare supplement Plan F is the most comprehensive and by far the most popular. It’s important to note that Medigap policies generally do not include extra benefits that are not covered by original Medicare. If extra benefits are covered expect that they will be in the form of discounts or maybe a gym membership. Some AARP Medicare Supplements include gym memberships.
The biggest benefit of buying a Medicare Supplement if you plan to travel is that you are able to choose any provider that accepts Medicare. Whether you are on a weeks- long vacation or live the snow bird lifestyle, you’re covered. The only exception is if you a purchase a Medicare Select policy, which does require you to use a predefined network unless you need emergency care.
Some Medigap policies will also provide foreign travel emergency coverage (up to plan limits) when you travel outside the United States. Plans C, D, F, G, M and N include this extra coverage. If you are planing trips outside the US, one of these plans would be a wise choice.
If you decide that a Medicare Supplement is right for you, enroll during your Open Enrollment Period or when you have Guaranteed Issue Rights otherwise you will be subject to medical underwriting.
Medicare Advantage… aka Part C
A Medicare Advantage Plan is not a Medicare Supplement. Enrolling in a Medicare Advantage Plan allows you the opportunity to receive your Medicare benefits in a different way. Although these plans are also offered by private insurance companies, standardization is nonexistent and you can expect that benefits, provider networks and premiums to vary widely.
For many people there are real benefits to enrolling in a Medicare Advantage Plan, especially if they have a limited amount of money to allocate towards healthcare. The biggest benefit is that plans often have lower premiums than Medigap policies and in some cases the premium may be $0 per month. This savings is somewhat off set by having to pay copays, deductibles and coinsurance when you use your plan. Some people also like the ancillary benefits often included and the ability to have Part D coverage as part of the plan.
Medicare Advantage Plans generally require you to use a provider network, the exception being with Private Fee-for-Service Plans. Advantage Plan networks are normally in the form of a PPO, HMO or HMO-POS.
The restrictive nature of being subject to a provider network often makes an Advantage Plan a less desirable option if you intend to travel. Although emergency care is covered domestically and internationally, you are limited to that type of care. It’s best to keep in mind that what you may consider to be an emergency may not be considered the same way by a Medicare Advantage Plan administrator whose job it is to save his or her company money.
Some companies do take into consideration the fact that you may want to travel and use your plan. The UnitedHealth Passport Program for instance will allow you to access providers in the UnitedHealth passport service area. It is important to note that several States are not in the Passport network, including California.
The Best plan for travel?
If your budget will allow it and you can self pay for any of the ancillary benefits available from an Advantage Plan you will have much more freedom and flexibility with a Medigap policy. But keep in mind that you will also need to enroll in a Part D Plan as well since no Medigap policies currently offer prescription drug coverage.
And if you pan to travel internationally be sure to buy a plan that covers foreign travel emergency care.