Consider your options as Medicare open enrollment nears
We are seeing many ads for Medicare policies on television. Your mailbox may be filling up with solicitations from different insurance companies. This is because Medicare open enrollment will start in about two weeks.
This happens every year between Oct. 15 and Dec. 7, when anyone covered by Medicare is making a choice for 2021 coverage.
Let’s discuss a few important facts about Medicare. It is a national program for Americans 65 years and older. Consumers must go on to Medicare at that age unless they or their spouse is covered by an employee plan with creditable coverage at a workplace with 20 or more employees.
If you do not start coverage at the right time, you must pay a monthly penalty for the rest of your life. Original coverage begins when you turn 65 or lose group coverage based on your work or your spouse’s work. Medicare is an 80/20 plan with a lot of deductibles. Because of this, most people have some kind of supplement to help cover extra charges.
There are two types of options to consider during open enrollment. One is an Advantage plan, which can range in cost from zero to several hundred dollars per month. People may wonder how you can get coverage for no cost. These plans receive payment from Medicare to insure your health.
They offer a network of medical providers you may visit. Every network is required to include all medical specialties. While plans differ in benefits, it is not unusual that you can visit your family practitioner at no cost. There may be a small fee to see a specialist and you incur some other out-of-pocket cost.
These plans often offer extra benefits that Medicare does not cover. They might include eyeglasses coverage, hearing, dental and gym memberships. Most plans include some prescription coverage. Some insurance agencies do not offer these types of policies because they require additional training and testing.
The second type of supplement is a Medigap plan. There are 10 plan levels. All F plans must cover the exact items. There can be different prices depending on the insurance company. Plans F and G cover the most deductible and co-pays. With these policies, Medicare from the government is paying most of the cost and these Medigap plans fill in all or some of the gaps.
Medigap plans do not provide any of the extra coverage offered by an Advantage plan and you usually have to buy a separate prescription plan. Costs vary from $100-plus to several hundred.
The main benefit of these types of policies is they have the largest network of providers. You can see any doctor in the country who accepts Medicare and is accepting new patients. This is a consideration for people who see doctors often.
These policies sometimes increase in cost as you get older. To avoid adverse selection, these plans can ask health questions and deny coverage. However, the first six months you are on Medicare, you must be accepted by the companies. This is why these companies appeal to people expecting more health issues.
Work with a professional who can explain all of the choices and consider any changes you have had in doctors or medicines. Make an informed choice to help control your health-care cost next year.
Gary Boatman is a Monessen-based certified financial planner and the author of “Your Financial Compass: Safe passage through the turbulent waters of taxes, income planning and market volatility.”
To submit columns on financial planning or investing, email Rick Shrum at rshrum@observer-reporter.com.