November is around the corner. Besides worrying about turkey dinners and seating arrangements for Thanksgiving, it’s that time of year again to review your health care options.
If you’re retiring, already retired or have an elder parent in this category, you should get familiar with the options available for health coverage. Since most health care dollars are used by seniors for doctors, medical services and prescriptions, it’s important to get this right to avoid burning a hole in your pocket.
Most seniors are familiar with Medicare. For a small monthly premium, the government-managed plan will cover a range of medical and doctor services. This is usually through Medicare Parts A and B. Some seniors also enroll in Medicare Part D (for Drugs or for Donut hole) which covers the cost for prescriptions (at least those outside of the dreaded donut hole.
Medicare Advantage (MA) is Medicare Part C. These are plans offered by private insurance companies and are approved with Medicare to provide consumers with all Medicare services. The government pays the insurer a set amount to provide the services of Medicare Parts A and B. Many of these plans also offer drug coverage. In this combination, you will not need to buy separate drug plans or a Medicare supplement known as MediGap.
Beginning now and going through December 31, you (or your parents) have an opportunity to enroll or change coverage.
Things to Consider
- Medicare Advantage May Cost Less: These plans must cover the same services that traditional Medicare offers. In many cases, there are additional services offered in Medicare Advantage. Usually this includes vision and dental coverage. The premium for many plans averages around $40 per month which is less than the $96.40 for standard Medicare Part B.
- There are restrictions: Some plans offer extra services that you may never use (such as gym memberships). These plans operate like HMOs or PPOs and require that you follow the rules about referrals from your Primary Care Physician (PCP) or using doctors, labs and hospitals that are within the network. Otherwise, you could be responsible for higher out-of-pocket costs.
- Compare plans: Use the services available at www.medicare.gov and click on “Compare Health Plans.” If you’re considering a plan that includes drug coverage, it’s helpful to have a list of your prescriptions and the formulary from your current Part D provider available to help with the comparison.
- Health Care Reform: One of the ways that the government expects to pay for health care reform is by reducing the amounts that are paid out to Medicare Advantage plan sponsors which have typically been receiving an average of 14% more for each enrolled beneficiary than it costs using traditional Medicare. While this may impact future services offered by some MA providers, your coverage cannot change in mid-year no matter what. And you can always re-enroll with a traditional plan at the next annual enrollment period.
- Restrictions for Those with Kidney Disease and Using Dialysis: If you have end-stage renal disease (ESRD), you typically cannot join a Medicare Advantage plan. There are exceptions for those who have been enrolled in a MA before diagnosis.
- Remember What’s Not Covered: Long-term care or “custodial care” is not covered by Medicare and most health insurance plans. If you’re living abroad, Medicare will not cover you either. Under limited circumstances, it may pay for medical services while you are traveling. You should check with the Medicare resources website at www.medicare.gov.
For more help on this topic, send me an email (steve@ClearViewWealthAdvisors.com) or call 617-398-7494.