Let’s get real. There’s nothing simple about retirement, and navigating the choppy waters of Medicare can be daunting. But when approaching “that age,” Medicare is a necessary evil, and we all need to know our choices. Are you ready for some clarity to Medicare’s alphabet soup? Our guest author Sharon Wagner chimes in with this overview: Medicare Simplified.
Medicare Simplified: Don’t Get Overwhelmed by Options, Get the Best Coverage
Medicare is an asset as we get older — that much can’t be denied, but when it comes time to figure out how to sign up and what to sign up for, wading through Parts A, B, C, D, and so on can get quite confusing! There’s Original Medicare, Medicare Advantage, and Medigap insurance. Medicare Advantage and Medigap have multiple options each. The signup process can be intimidating and confusing for some people, but knowledge is power. Don’t get overwhelmed, get your best coverage and read on as our guest author breaks it all down with “Medicare Simplified.”
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First, it’s important to know that you aren’t going to be forced to choose a plan blindly. Medicare does offer a plan finder tool, which is free and easily accessible online.
If you plan to purchase an Advantage plan, you can also get information from a licensed Medicare Advantage insurance agent. Since these are private plans, you won’t have to deal with the government, and your agent can answer any questions you have, even once you are enrolled.
However, benefits do vary by location, so it’s important to understand what’s available in your state.
Don’t Get Overwhelmed by Options
As noted above, your primary options are Original Medicare, Medicare Advantage, and Medigap. But what are they, and what do they cover?
Medicare is a federally sponsored insurance program. You become eligible for Medicare when you turn 65, but it’s also available to younger people with disabilities and to those with a terminal illness.
Medicare Parts A and B
Medicare features two parts (A and B) and covers:
- Hospital care
- Home health care
- Skilled nursing care (non-custodial and medically necessary)
- Hospice care
- Doctor visits
- Durable medical equipment
- Ambulance services
Medicare Advantage Part C
All of the above is covered by Medicare Advantage (Part C), but often at a better rate. Since you pay a deductible and monthly premium for Original Medicare, an Advantage Plan may be a wise choice, and you can often find a plan that is nearly the same cost. In addition to hospital and medical care, Advantage plans may also cover:
- Access to fitness programs and centers
Although it is referred to as Part C, Medicare Advantage is really just a bundle of Part A and Part B with some added benefits.
Medigap is not the same as Medicare Advantage. It is still private insurance, but it has more options designed to bridge the financial gap between Original Medicare and your co-payments, deductibles, etc. It features plans A, B, C, D, F, G, K, L, M, and N. Most people choose F, which as of 2019 costs $326 per month; there is also a $68/month option with a $2,300 deductible.
One thing you should know about Medigap, according to the AARP, is that if you don’t enroll in your seven-month initial enrollment period, you may wind up paying much more later on.
All Medicare plans cover preventative services, such as a yearly wellness visit and testing to scan for diabetes and other diseases.
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You Can’t Have Both
Regardless of your health or budget, you cannot enroll in both an Advantage plan and own a Medigap policy. You must choose between the two, which is why understanding your options early is crucial. Medicare expert Justin Adsit goes into greater detail on how to pick between the plans, telling Forbes that the decision is akin to reaching a “fork in the road.
With all the options out there, it’s easy to give up and just go with what’s provided. But choosing the right plan for you is well worth the effort, considering that your healthcare costs in retirement can reach upwards of $250,000. Not doing so now can leave you scrambling to cover the bill when you are most vulnerable to financial loss.
Ask your agent about Medicare Advantage and Medigap insurance, and have them detail the pros and cons of each. You may find that paying a little more each month can save you money in the long run. Likewise, if you’re healthy and can afford a high deductible and/or coinsurance, you can pay a smaller premium. The choice is yours, but it’s one you have to make.
Guest Author Sharon Wagner created SeniorFriendly to provide helpful tips and advice to seniors on staying healthy and making the most out of life. She is the author of the upcoming books, The Ultimate Guide to Senior-Friendly Workouts, Fitness Gear, Healthy Recipes, and More.