Some people on Medicare don’t have to concern themselves with which types of Medicare plans to choose. They don’t have to know when the Medigap Open Enrollment Period is, or concern themselves with annual enrollment for Medicare Advantage plans or Part D.
They are retired military and former government workers or are receiving their coverage from a union or employer / former employer.
The following information is for the rest of us. If you are responsible for managing your Medicare coverage, you really have three different ways to configure Medicare plan choices to secure your coverage.
This article will take a look at the three choices available and some of the concerns surrounding each.
Option #1 – Staying with original Medicare
There is no rule that says you have to purchase a supplemental policy or enroll in a Medicare Advantage plan. Some people choose to stay with original Medicare. The vast majority of these people do so because they have supplemental insurance from a former employer. If you are offered health insurance from your former employer that coverage will to one degree or another pay after your original Medicare pays.
If you fall into this group you should at least look at your other options to ensure that you are receiving the best benefits. In some cases insurance from your former employer may cost more than a Medicare supplement policy and give you less benefit. If you are paying a premium for your employer group supplemental policy you should explore the costs of a Medicare supplement.
A small group of people choose original Medicare even though they do not have coverage from a former employer. Many of these people do so because they are not aware of their options. When becoming eligible for Medicare you should evaluate all your options.
Choosing original Medicare by itself or an employer group policy without drug benefits will require that you purchase Part D insurance. You are not actually required to purchase Part D but the late enrollment penalties give you a good incentive to do so.
Many people avoid this approach because they believe that original Medicare with Part D leave too many gaps that can lead to unpredictable costs.
Option #2 – Purchase a Medicare supplement
Medicare supplement policies are referred to as Medigap because they fill the cost-sharing gaps to one degree or another depending on the individual policy. You must have original Medicare Parts A and B to purchase a Medicare supplement. Plans are standardized and benefits will not vary from one company to the next. Price will vary from one insurance company to the next as may your perception of the customer service. Some companies have more rate stability than others and these factors should be considered.
Nationally Medicare supplement Plan F is the most comprehensive and very popular. Another supplement that was introduced June 2010 is Medicare supplement Plan N which is proving to be wildly popular due to its lower cost. Medicare supplement plans do not include Part D coverage and it must be purchased separately.
Option #3 – Enroll in a Medicare Advantage plan
Medicare Advantage plans generate the most questions and often confusion. Medicare Advantage plans are annual plans that can change yearly or even not renew for the following year.
An Advantage plan is not a Medicare supplement. But rather you receive your Medicare benefits from a private insurance company that is approved and contracted with CMS . Features of Medicare advantage include:
- Often little or no monthly premium.
- Fixed cost sharing including co-pays, coinsurance and deductibles.
- Part D is often included.
- Plans have benefits beyond original Medicare like dental and vision.
The down-side of an Advantage plan is the uncertainty of an annual plan and often the network restrictions that are part of HMO or PPO plans. You are also subject to restrictive enrollment periods. Plans are offered on a County-by-County basis and what may be available in one County may not be in the next.
Premiums also vary based on the plan
and locations offered. If you are comparing Medicare plans you should take a look at these plans to determine if they would be a good fit for you.
Once you have looked at your options from a top level view you can get down to the business of comparing Medicare plans. Most insurance companies have all relevant information online to save you time and the trouble of meeting with countless agents. Or visit the Medicare website to search for plans in your area.