Sharon Wagner is the author of The Ultimate Guide to Senior-Friendly Workouts, Fitness Gear, Healthy Recipes, and More and runs the website SeniorFriendly.info. Sharon hopes to provide resources and inspiration to other seniors seeking a healthier lifestyle.
If you’ve been thinking about Medicare but have found the options overwhelming and confusing, you’re not alone. Picking a Medicare plan can leave even the most decisive of us lingering in limbo, afraid to make a commitment. However, this is an important choice, and you’ll benefit from understanding the different options before you sign on the dotted line. Here are a few things you should consider when you turn 65 and become eligible for Medicare.
Choosing a Plan
First, you should know the Medicare offers a Medicare Plan Finder tool. The website MedicareAdvantage.com explains how to use this tool and provides info on how to get help.
Medicare comes in two forms: Original Medicare and supplemented Medicare, the latter of which is also broken down into two types. A Medicare Advantage plan and a Medigap policy are both forms of private insurance that offer the same benefits as regular Medicare. Advantage Plans, however, go a step further by including extras such as dental and vision care. Medigap policies are purchased in addition to Original Medicare and only come with those benefits. You can’t have both types of supplement.
Original Medicare covers hospital and doctor visits (Parts A and B), but it leaves many gaps in coverage and there is no cap on your expenses. Investopedia estimates that a person with Original Medicare requiring heart bypass surgery would need to pay more than $17,000 of their own money for the Part B copay alone. That doesn’t even include Part A co-pays and any prescription medication needed relating to the heart condition.
A Medicare Advantage recipient in the same situation, on the other hand, would likely be out less cash but would be limited on which doctors and hospitals they could use for the surgery. Since most Medicare Advantage plans are a PPO or HMO, the patient may not be covered at all out of their home network. Before choosing a Medicare Advantage plan, verify that your preferred providers are in that plan’s network.
The same patient with a Medigap policy may not have spent any additional funds on their surgery or medications. They would have been free to choose any providers that accept Medicare, although there are fewer and fewer physicians that do.
So Which Is the Better Option?
Medicare Advantage and Medigap are both great choices. Medicare Advantage is a better option if you tend to stay in one place throughout the year and are most comfortable with paying a smaller monthly premium. Most appealing is that you’ll have a broader range of plan choices. Typically, you will also be limited on how much you are required to pay out of pocket each year, which can help you budget and save for emergencies.
Medigap may be a better option if you live in one part of the country during the winter and elsewhere the rest of the year since you can use any Medicare doctor nationwide. The monthly premiums are much higher, but you likely won’t have to write a big check after a major health event, though this will depend on which policy you choose.
Within each option, there are many choices. Many big-name insurance providers offer Medicare Advantage plans, and each has subtle nuances that might appeal to one buyer more than another. Medigap has different tiers of coverage, and the more you pay each month, the less you’ll pay at service time. If you have a family history of disease that might leave you needing intensive in-patient care, Medigap can put a stop to the big bills. Medicare Advantage is less expensive and has perks you can’t get with Original Medicare.
Medicare can get complicated. So, talk to your insurance agent and let them know your monthly budget, family history, and how much you can afford to pay in a worst-case scenario. They will have the expertise to help you choose a plan or policy that makes sense for you.
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