Assess your medical needs before changing your Medicare enrollment
We are currently in the middle of Medicare open enrollment period. This is every year between Oct. 15 and Dec. 7. This is when people already enrolled in Medicare make their decisions about next year’s coverage. Everyone must go on Medicare when they reach age 65 except if they or their spouse is covered by an employee plan. The company must have at least 20 employees for this exemption to apply.
Medicare is an important program, but it does not cover all of the health care expenses for beneficiaries. Part A of Medicare covers hospital expenses. It does not cover a deductible of $1,316 per spell of illness. You could have this cost up to six times in one year if everything went wrong. While it does cover the first 60 days in the hospital, you would have to pay $329 a day for days 61-90, $658 per day for days 91-150 and the full cost for any days over 151. Part B which covers doctors has a much smaller deductible, but you are responsible for 20 percent of the Medicare approved bill rate. Both of these could be very expensive.
Because of all of these possible out of pocket expenses, it is not surprising that 98 percent of all Medicare recipients have some kind of supplemental coverage. There are two main types. Part C or Advantage plans, or Medigap Plans.
Advantage plans have a network of providers much like a HMO. They are less expensive to see a doctor in the network. Advantage plans often offer drug coverage and maybe extras such as hearing, eye care and gym memberships. You can switch to an advantage plan any year without precondition health questions.
A Medigap plan allows you to see any doctor in the country who accepts Medicare and is accepting new patients. It may also have less out of pocket cost depending on the level you select. It does not include prescription coverage so a separate Part D plan must be purchased. It does not include the extras sometimes included in Part C and it is usually more expensive. Why would anyone buy one of these? If your health is more at risk, it gives you a wider selection of providers and possibly less out of pocket if you use a lot of medical services. While there are no health questions if you buy Medigap when you are first eligible, there may be if you switch when your health declines.
It is important to make the right choice based on you and your spouse’s health situation. A recent study was conducted of drug plans for Medicare beneficiaries. It found that 90 percent were in the wrong drug plan and were paying more than necessary. Be sure to do a little research in the prescriptions you are taking to discover your best option. This is an easy way to save money and help reduce your health care expenses.